It is that time of the year – a time to reflect on what has been a fascinating year in the world of Telecommunications, Media and Technology (TMT). 2015 was a year in which the digital era technologies (cloud, social, mobile, big data) matured a little further with growth of wearable tech, messaging apps and unicorns appeared (and died). Equally, exponential technologies (AI, IOT, 3D printing, Blockchain, Connected cars etc.) have come to the fore with more and more (viable) use cases being explored than in any other year such as cognitive automation, drone technology, Tesla’s power wall and more examples of smart cities. In a breakthrough year, what were the most interesting news stories from the world of TMT and why?
Smartwatch revolution and Apple Watch
This was the year of the ‘smartwatch’ as the new form of wearable technology. Fitbit evolved, Pebble grew up, Garmin stepped into device syncing and a number of companies released low-connectivity watch/fashion pieces. And then there was the Apple Watch. The ‘Watch’ represents a new chapter for Apple as it starts to plan an exit from the narrowly-defined smartphone market into playing an increasingly important role in every aspect of consumers’ lives.
There was (is) so much commentary on the Apple Watch – What will it look like? Will anyone buy it? Have Apple tried to do too much? Have they not developed it enough? As the dust settles from the Watch’s introduction I believe the continued success of this product and other smartwatches depends on three things: the physical design, the interaction model with the user, and how it interacts with its environment. The verdict? The Apple Watch is probably on track.
Ad-blocking, instant articles and the death of publishing sites
Ad-blocking is not new but 2015 was a year that apps like ‘AdBlock’ received a significant amount of attention. One European Telco was even reported to be creating its own ad-blocker for its customers to use against sites like Google or publishers. The reason for the focus this year has been ad-blocking’s threat on traditional web-publishing sites (e.g. Newspapers, specialty content) as they struggle to maintain and grow their share of advertising dollars. At the same time Facebook advanced its platform through Instant Articles which for advertisers offers a much more targeted and cookie independent way to reach their intended audiences.
This will continue to be an important topic for the next year to 18 months. Mergers like the one between Verizon (Telco) and AOL (owner of many publishing sites) announced this year provide a glimpse into what is to come for publishing sites as their business model is disrupted by social media on the one hand and ad-blocking on the other. Expect more deals like AOL/Verizon, expect more news on ad-blocking and expect a lot more noise from publishers as they try to evolve to these market conditions.
The rebirth of Google as Alphabet
Google announced the creation of its parent company Alphabet in an attempt to reduce the strategic confusion between its moonshot businesses and its core business of ‘organising the world’s information’. Larry and Sergey, the founders of Google, put out a characteristically ‘Google’ statement about the intent of Alphabet highlighting that Google does not intend to become a conventional company.
This story is significant in many ways – it is a moment of strategic clarification for Google who had been receiving criticism from Wall St for their ‘shotgun’ approach to their investments, it is allowing room for new Google businesses to flourish outside the core and it also represents the start of Google’s business transformation. Google needs a new cash cow as search advertising plateaus – Larry and Sergey are betting on it coming from one of their moonshots or a refocused core. 2016 will be an interesting year (again) for Google.
Convergence continues: Project Fi, Google Fiber, Apple Care
This year media and device companies continued their quest for greater power in the content delivery value chain with offers that attempt to relegate broadband providers into obscurity. Project Fi (an MVNO) is Google’s attempt to offer a mobile product to users of its Nexus hardware and Android software and Google Fiber is Google’s own cable broadband service available in several US towns. Apple recently launched Apple Care which is a financing service for Apple Users who want the latest devices but don’t want to deal with their mobile carrier.
The moves by Apple and Google continue to put pressure on the business models of incumbent telecommunication’s operators. Apple Care is effectively ‘unbundling’ carriers’ mobile plans and Google Fiber and Project Fi are removing the reliance on a carrier all together. The next 18 months will continue to see mounting pressure on the incumbent telecommunications market particularly as ‘e-SIM’ devices are launched and become mainstream.
The Death of 90’s internet: Internet Explorer and Yahoo
2015 may be the year the ‘dinosaurs’ of the internet finally die. Microsoft announced that it would be discontinuing its Internet Explorer brand and Yahoo at the turn of the new year has a very uncertain future. The driving force behind this is the continued plateau of search related advertising spend as smartphones begin to dominate the world and the ‘internet of old’ (PC/browser driven usage) gives way to mobile-centric, app-based use. Yahoo’s core business (e.g. Yahoo Mail and news/sports sites) which is based in the ‘old internet’ is likely to attract private equity firms or perhaps a Telco like Verizon.
The mobile internet is here to stay for the time being and 2016 will reveal more winners and losers. The TMT organisations best attuned to the mobile eco-system stand the best chance of prospering from the growth in the new ‘mobile’ internet.
That’s a wrap on 2015…What a year! Thank you to all who have read, liked, commented and shared my posts from strategy4telcomediatech in the last 12 months. Hope you have a fun and fulfilling 2016.