Topps Blog: The Trends That Defined Tech in 2016

Call it whatever you will, but one thing that you cannot call 2016 is predictable. One of the least likely contestants won the US presidential elections, Indians have learned the not so gentle art of lining outside ATMs at odd hours and neither Rafa Nadal nor Roger Federer even made it to the final of a Grand Slam tournament. There were craziness and chaos aplenty in the tech world too, with BlackBerry exiting smartphone manufacturing, a new player turning the Indian telecom market on its head and a whole lot more. As the dust settles on 2016, here’s a look back at the trends that defined the year in some areas of technology:

1. The three horsemen of the smartphone market!

It’s now eminently clear that the smartphone market has become a three-horse race. There are Apple, Samsung and then there is the entire gang of Chinese manufacturers. Apart from this trio, anyone else hardly matters anymore. Yes, one can argue that companies like HTC, Sony and LG, still exist but they simply do not matter on a global level anymore.

HTC has been making losses for so many quarters that most of the profits they made being a smartphone OEM have been eaten up. It may sound brutal, but there is little to no chance that HTC will ever make a meaningful comeback in the smartphone market.

PC: TechRadar.com

Sony, on the other hand, has completely withdrawn from the low-end and mid-range market and targets the high-end exclusively. While the strategy of targeting high-end alone has helped Sony make a profit at its smartphone division, to say that it is a competitor to Samsung and Apple would be a stretch. Sony is now largely restricted to the Japanese market alone and while its products may have some distinct features, they are still not good enough to compete with Samsung and Apple globally. The same goes for LG. LG started gaining some steam with the LG G3 but the period since has witnessed little traction for the G4 and the G5. The old titans of the mobile-phone industry such as Nokia and BlackBerry are now merely licensing their brand names to interested parties. To say that LG and other manufacturers have stopped innovating would be wrong but their newer innovations are hardly cutting ice with the general public. The concept of modules with the G5 was indeed interesting but did little to increase sales. Similarly Samsung’s recent disaster of the Note 7 has done little to help other Android manufacturers; in fact, according to Kantar, the Note 7 disaster has helped Apple more than anyone else.

All in all, the smartphone market has been split between Samsung and Apple at the top with Chinese manufacturers grabbing everything else. One could argue that there are Google Pixel and a glut of local manufacturers in various countries but their overall sales would hardly change the scenario of the overall global smartphone market. India has become the most attractive market for all smartphone manufacturers. Right from Apple to the low-end Chinese manufacturers, everyone wants a share of the Indian smartphone market. Apple’s Tim Cook has been optimistic about India as seen by his recent visit to the country, setting up an R&D center in Bengaluru, and attempts to tie up with carriers. Even Chinese manufacturers like Xiaomi and OnePlus now feel that India will be their most important market in the years to come. To put it simply: as long as there was growth in the Chinese and US markets, most manufacturers didn’t care about India but as soon as that growth dried up, India is what every smartphone manufacturer wants to conquer owing to its population and relatively low smartphone penetration.

2. Dear smartwatches, watch out!

There are now some obviously worrying signs about whether the smartwatch market will end up being a dud. It wouldn’t be incorrect to term Pebble as one of the pioneers of the smartwatch market and yet the company got sold to Fitbit recently. Most Android Wear manufacturers have refrained from releasing a smartwatch for the fall and at least one of them (Motorola) has clearly indicated that it’s going to take a break from the smartwatch market before re-evaluating its options. IDC has said that Apple faced a 70 per cent drop in smartwatch shipments for Q3 2016 but Tim Cook says that for the holiday quarter i.e. Q4 2016, Apple is on track for the best ever quarter in terms of Apple Watch sell through. Most analysts agree that IDC may be wrong and Tim Cook is correct but even if that’s the case, all is far from well in the smartwatch world, in my opinion.

PC: trustedreviews.com

If Tim Cook is indeed correct then, it’s an Apple Watch market and not a smartwatch market but Apple can’t win in vacuum for a product that’s at such an early stage. While every company would want a monopoly, competition is required. Take the iPhone for example. While Apple was undoubtedly the first in the “touch without stylus” smartphone market, there’s no doubt that competition from Android has helped Apple. If Samsung didn’t dabble in the phablet market with the Galaxy Note, would we really have a Plus variant of the iPhone? If Samsung didn’t pick up OLED and continuously improve it with every generation, would Apple really be able to consider OLED for the iPhone 8 considering that it’s previous attempt to source sapphire for iPhones failed?

Apple can build products in vacuum at its offices in Cupertino but a lot of what goes into building those products is realized only if there’s enough scale to develop a healthy ecosystem of suppliers. I have already mentioned OLED, take another example of modems. iPhones have been using Qualcomm modems for a long time now but what makes those Qualcomm modems possible is Qualcomm’s business model of integrating those modems along with APs and selling them to Android manufacturers. If there were no Android manufacturers (competition), Qualcomm’s current business model wouldn’t be possible and iPhone’s growth would be stymied.

Take telecom operators as another example. The growth in content consumption because of iPhones and touchscreen smartphones is the reason why so many telecom operators invested in 3G and LTE networks. If there were no Android smartphones (competition) then in certain countries such as India, most telecom operators would have no incentive to set up 3G and LTE networks as the vast majority would still be using feature phones and again, the iPhone’s prospects in India would be stymied considering that Tim Cook himself said that he expects iPhones to do well in India once the LTE networks roll out. it is only and only because we have such a large number of people using Android smartphones that operators in India have invested in 3G and LTE networks, otherwise this investment would have never been possible for iPhones alone as they still account for less than 1 percent of all mobile handsets in India.

Of course, iPhones currently have enough scale for Apple to set up independent supply chains regardless of the competition but the Apple Watch nowhere has that scale and such a scale would be achieved only if the overall smartwatch market remains healthy and grows with enough competition. If competition gets killed so early, then the Apple Watch would have an easy run for the next few years but would eventually face difficulties.

3. Software companies take a good hard(ware)look!

2016 has also been the year where companies that were generally not in the business of making hardware have started doing so. Google’s foray into hardware included the DayDream VR headset, Google Wifi, Pixel and Google Home. At least two of Google’s hardware initiatives namely the Pixel and the Google Wifi have received good reviews. The other two products, namely the DayDream VR headset and Google Home, belong to categories that are still very early in their life cycle but reviews have been positive overall. Amazon launched the Echo which was a surprise hit after the Fire Phone ended up being a dud, although to be fair Amazon has always had some presence in hardware thanks to the Fire tablets and the Kindle.

Snapchat which made a name for itself via its ephemeral application is now dabbling with hardware as well – the Spectacles has received very favorable reviews and for a company that aims to make it as easy as possible to broadcast what’s happening in real time to the world, the Spectacles make absolute sense. According to a Business Insider article, Snapchat has been actively pursuing various other hardware companies as well which means the Spectacles aren’t a one-time experiment, but rather a start to something bigger. Software companies venturing into hardware is definitely interesting and something to look forward to in the next year as well.

4. As intelligence gets artificial, cars lose drivers

One look at Nvidia’s stock price and it’s evident that the time for AI to go mainstream has finally arrived. Nvidia has been delivering record earnings for quite some quarters now and in every earnings call Nvidia has constantly highlighted that the GPUs being supplied to power AI systems as a reason for better-than-expected earnings. Apart from Nvidia, even major tech companies have been making huge advancements when it comes to AI. Take Google for example. Its Alpha Go AI powered by Deep Learning managed to beat Lee Se-Dol, a Go world champion. Google has been constantly highlighting how AI is powering many features such as smart replies in Inbox various other features of Google apps.

Even if we leave out Google and Nvidia, there has been so much news of how other companies are upping their AI game. A number of news outlets have reported Apple’s ambitions for AI such as this article from Back Channel, this article from Fast Company and finally this leak from Quartz. Every single tech company is trying to ride the AI wave- some are more vocal about it than others but almost everyone is trying their best.

Then there has been the rapid interest in self-driving cars. Although fully autonomous self-driving cars were something Google alone seemed to be pursuing a few years back, many more companies joined the fray in 2016. There was the ambitious startup Comma.ai which eventually had to shut down. Uber has also joined the autonomous driving bandwagon and acquired self-driving truck startup, Otto. GM plans to test self-driving cars as well and there’s Apple’s project Titan. Tesla is moving towards complete autonomy one step at a time and 2016 was when most of the advancements were made. The reason I have clubbed autonomous cars along with AI is because apart from regulations, AI is the primary thing stopping them from becoming a reality. The better AI keeps getting, the sooner will we have autonomous cars on the roads.

5. Telecom

I am going round off the trends with Telecom. 2016 has been a great year for the Indian telecom market. We finally saw the much-awaited entry of Reliance Jio and with Jio’s launch, LTE roll outs in India have been happening at a feverish pace. By March 2017, most states in India will have at least 2-4 telecom operators providing 4G while just a year back some states didn’t have 4G being provided by even a single telecom operator. Voice will be something that most telecom operators will no longer charge for as time passes. Jio has made voice free for life along with any data pack and although the incumbent operators resisted initially, even they have started providing the unlimited voice with data packs.

On a global basis there has been a trend of telecom operators merging content with distribution. AT&T’s acquisition of DirecTV and its impending acquisition of Time Warner, along with Jio’s acquisition of Network18 and 21st Century Fox’s proposal to buy Sky all point towards companies wanting to own both content as well as distribution. Whether these bets of merging content and distribution will pay off or not remains to be seen.

© Raju PP for Technology Personalized, 2016. This Feed is for personal non-commercial use only. If you are not reading this material in your news aggregator, the site you are looking at is guilty of copyright infringement. Please contact us, so we can take legal action immediately. If you are on Twitter you can follow me @rajupp! | Permalink |

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