Sunday, January 31, 2016

On Smartphone Growth and Technology Innovation

  • Last week, while discussing its quarterly results, Apple CEO Tim Cook said “Our results are particularly impressive given the challenging global macroeconomic environment. We're seeing extreme conditions unlike anything we have experienced before just about everywhere we look. Major markets including BrazilRussiaJapanCanadaSoutheast AsiaAustraliaTurkey and the Eurozone have been impacted by slowing economic growth, falling commodity prices, and weakening currencies
  • Samsung, in its quarterly results statement said, “As for the outlook for 2016, Samsung expects single-digit percentage growth in both the smartphone and tablet categories amid softening demand and intensifying competition. Despite this challenging environment, the company will focus on increasing smartphone shipments and maintaining a double digit margin through releases of competitive devices and an optimized product portfolio.
  • Melissa Chau,Senior Research Manager with IDC said "Usually the conversation in the smartphone market revolves around Samsung and Apple, but Huawei's strong showing for both the quarter and the year speak to how much it has grown as an international brand."
  • Separately, announcing a business partnership, Blaise AgĻ‹era y Arcas, head of Google’s machine intelligence group said “By working with Movidius, we’re able to expand this technology beyond the data center and out into the real world, giving people the benefits of machine intelligence on their personal devices” and Movidius CEO  Remi El-Ouazzane said “This collaboration is going to lead to a new generation of devices that Google will be launching …  What Google has been able to achieve with neural networks is providing us with the building blocks for machine intelligence, laying the groundwork for the next decade of how technology will enhance the way people interact with the world.”
MY TAKE
  • Regarding Apple, Samsung and Huawei – As the smart phone market matures, market share gains will be driven by factors such as price, battery life and software enhancements - rather than look and feel.
  • Regarding the Google – Movidus partnership -  it is another example of how innovation is focused on artificial intelligencevisualizationsensors and aerial, terrestrial and aquatic robots.

Sunday, January 24, 2016

Virtual Currencies, Global Trade, and "The Death of Bitcoin"

  • Last week, the International Monetary Fund published “Virtual Currencies and Beyond,” which said “New technologies—supported by advances in encryption and network computing—are driving transformational change in the global economy, including in how goods, services and assets are exchanged .
  • VCs and their associated technologies (notably distributed ledgers based on blockchains) are rapidly evolving, and the future landscape is difficult to predict.
  • VCs offer many potential benefits, including greater speed and efficiency in making payments and transfers—particularly across borders––and ultimately promoting financial inclusion.
  • The distributed ledger technology underlying some VC schemes … offers potential benefits that go far beyond VCs themselves.
  • At the same time, VCs pose considerable risks as potential vehicles for money launderingterrorist financingtax evasion and fraud. While risks to the conduct of monetary policy seem less likely to arise at this stage given the very small scale of VCs, risks to financial stability may eventually emerge as the new technologies become more widely used."  Full report here.
  • Separately, on January 14, high profile Bitcoin developer Mike Hearn said, “Why has Bitcoin failed? It has failed because the community has failed. What was meant to be a new, decentralized form of money that lacked “systemically important institutions” and “too big to fail” has become something even worse: a system completely controlled by just a handful of people. Worse still, the network is on the brink of technical collapse. The mechanisms that should have prevented this outcome have broken down, and as a result there’s no longer much reason to think Bitcoin can actually be better than the existing financial system.” Full text here.
MY TAKE
  • Regarding virtual currencies – they have the potential to 1) introduce healthy competition into the monetary system, 2) lower costs and drive operational improvements for financial transactions, 3) expand micro-finance opportunities, 4) serve as an alternative to unstable currencies and 5) support new classes of applications. At the same time, the use of encryption will continue to be debated by policy makersbusiness leaders and privacy advocates. My report "Bitcoin, Digital Currency and the Internet of Money" here.
  • Regarding Bitcoin - It may simply represent another stage in the evolution of virtual currencies and virtual assets - that will reshape how global commerce is pursued.

Sunday, January 17, 2016

"The Fourth Industrial Revolution" and "Digital Dividends"

  • This week, as government leaders meet at World Economic Forum’s annual gathering in Davos, SwitzerlandKlaus Schwab (it’s founder) will focus on “The Fourth Industrial Revolution …  a fusion of technologies that isblurring the lines between the physical, digital, and biological spheres.” His additional comments include: 
  • “the possibilities of billions of people connected by mobile devices, with unprecedented processing power, storage capacity, and access to knowledge, are unlimited. And these possibilities will be multiplied by emerging technology breakthroughs in fields such as artificial intelligencerobotics, the Internet of Thingsautonomous vehicles3-D printingnanotechnologybiotechnologymaterials scienceenergy storage, and quantum computing
  • However, …  in the future, talent, more than capital, will represent the critical factor of production. This will give rise to a job market increasingly segregated into “low-skill/low-pay” and “high-skill/high-pay” segments, which in turn will lead to an increase in social tensions....
  • In its most pessimistic, dehumanized form, the Fourth Industrial Revolution may indeed have the potential to “robotize” humanity and thus to deprive us of our heart and soul. But as a complement to the best parts of human naturecreativity, empathy, stewardship—it can also lift humanity into a new collective and moral consciousness based on a shared sense of destiny. It is incumbent on us all to make sure the latter prevails “ (full text here)
  • Separately, the World Bank released the report “Digital Dividends” which said “Digital technologies have spread rapidly in much of the world. Digital dividends—the broader development benefits from using these technologies—have lagged behind. In many instances digital technologies have boosted growth, expanded opportunities, and improved service delivery. Yet their aggregate impact has fallen short and is unevenly distributed.”  (full report here)

MY TAKE
  • Both reports provide thorough assessments of the opportunities and challenges from the accelerating pace of technological innovation.
  • Ensuring positive outcomes will likely require a better understanding of the socio-economic trade-offs and pursing new approaches for managing “progress”.
  • Increased focus on STEM (science, technology, engineering and math) programs at all educational levels will be critical in this process.

Sunday, January 10, 2016

Consumer Technology in Focus As Global Markets Falter

  • Last week, many global markets performed poorly, and the S&P 500 stock market index declined about 6% for the week - the worst start for a new year on record.  Factors contributing to the performance were problems in China (an unstable currency, a slowing economy and a volatile stock market), declining energy prices, weakening manufacturing trends, tensions between Iran and Saudi Arabia, and nuclear testing by North Korea. Potentially positive news came on Friday, when the U.S. reported better than expected job growth.
  • Separately, over 165,000 people attended the Consumer Electronics Show (CES) in Las Vegas to see the products and hear the visions from over 3,600 companies. Technologies were represented in the areas of 3D printingaudioautomotivefitness/sportssensorssmart homeroboticsvideovirtual realitywearables and wireless communication.
  • Notable announcements included 1) a keynote presentation by Brian Krzanich, Intel CEO focusing on their opportunity in many markets - but never mentioning PCs or smartphones, 2) Fitbit’s entrance into the smart watch market - which drove its stock down 18%, 3) EHang’s autonomous drone that can carry a payload of 286 pounds including a single passenger, 4) Lego's WeDo 2.0 – an education kit for learning to build robots and 5) Richard Yu, CEO of Huawei’s consumer business group saying, “Every month, every year we are increasing our market share [in smartphones] … maybe within two years, we have a chance to be number two.”
MY TAKE
  • Regarding market volatility –  my most recent weekly note (Dec. 20) highlighted several of these market concerns, along with the potential for increased market volatility in the short to medium term.  
  • Regarding U.S. job growth – wage growth remains weak, and most of the job gains came from part-time hiring.
  • Regarding CES – 1) Intel seems well positioned for the post-PC era, 2) Fitbit should maintain its focus as a leader in fitness tracking (both hardware and software), rather than the the crowded smartwatch market, 3) EHang provided another view of Jetsons' futuristics lifestyle (see video here), 4) Lego will likely benefit from the need to develop robotic and engineering skills and 5) Huawei will likely continue to increase its smartphone and tablet market presence globally.