Month: December 2019

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Holiday Amusement: Some predictions

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Many thanks and Happy New Year

As the year draws to a close, it marks nine months of providing you with some daily thoughts on dis-rup-shun.  I have encountered a number of readers over the holidays that have offered their support, endorsement and general satisfaction with this contribution to your inbox, so onward we go. If you have specific suggestions on how this newsletter could be more helpful to you (longer, shorter, more focused, etc.), please share.

A few predictions from off the cuff, after perusing the top daily news sources for the past nine months:

  • Big Tech will face some friction from Congress, the FTC, and states’ attorneys general, but these efforts will do little to check the power and growth of these economic engines. The lack of regulation will result more from the lack of focus of legislators, rather than defensive postures of Big Tech.
  • Amazon understands how to penetrate new markets and new industries. Facebook and Google are not as adept at winning in non-core businesses. Microsoft has a laser focus on closing the cloud computing gap behind AWS, and will make significant progress. Expect Amazon to continue to amaze and frighten, while Facebook and Google will continue to disappoint.
  • Apple will have another strong year, fueled by sales of gadgets such as AirPods, watches and a less expensive iPhone. The company’s services businesses, with the exception of its very successful credit card launch, will struggle to gain significant share, including its Arcade gaming, and Apple TV Plus, as differentiation in services will be more difficult for Apple. The company will continue to slowly move into the uncharted waters of personal health, working more closely with medical experts to find new health applications for its powerful wearable platform, Apple Watch.
  •  Smart home and home automation products will continue to improve in functionality and value, with deeper cooperation between vendors who are attempting to advance in the wake of Alexa and Google Home market penetration. These home ecosystems will grow, providing many more options for home control, however this disjointed approach will not suffice for high-end homes that want an end-to-end system, or those that want a rock solid, monitored home security system. Cool new smart home products and machine learning will continue to transform integrated systems, as systems providers such as ADT, Vivint and Alarm.com seek to keep their systems up to par with the latest hot products.
  • Autonomous machines will continue to pop up, with airplanes, helicopters, delivery carts, and cars that drive themselves being tested in many applications. Until a great deal of test data is released by trusted authorities, consumers will continue to be wary. Autonomous car vendors will need to educate the public that although their cars are not perfect and have killed, they are already safer than 50% of human drivers on the road today — a tough assignment for the marketing agency.
  • Trade wars will be resolved by mid-year, with the Trump administration claiming some wins, and with China’s tech industry and especially Huawei strengthened by adversity. The resolution of the trade wars will spur the economy to an exceptionally strong second half, and will further delay or dispel talks of global recession.

I wish you constructive disruption in this coming year. Whether it’s your job, your business, your personal life, or all of the above, be ready for disruption. As my Peloton instructor says, “Learn to be comfortable with discomfort.” Happy New Year.

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Holiday Amusement: Cord Cutting

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Roku best stock of the year

As the Cord Cutting decade draws to a close, it is fitting that the year’s best performing stock among companies worth over $5 billion is Roku, up 355%. The company will report an annual revenue growth rate of 49% despite the fact that the company is yet to earn a profit. The company enjoys the largest market share for streaming devices (39%) and has a growing advertising business, but is playing in an increasingly competitive business. CNBC

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dis-rup-shun: What a great company — Roku has continued to do what it was founded to do — provide a streaming alternative to TVs not designed to receive streaming content. The simplicity of its mission as well as its controls have made it a Wall Street winner. But what about the profit thing? When will lack of profits impact Netflix and Roku as they have Uber and friends? The new video industry is still in the midst of creative destruction (chaos) and the companies that are grabbing the most eyeballs are valued the highest — likely with the expectation that they will be acquired by a company that can generate profits. So enjoy the ride and keep streaming with Roku.

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Holiday Amusement: Internet access

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Digital Divide slowly closing

It has been said many times that access to the internet is fundamentally access to the digital economy — those without will fall further behind in education, income and knowledge. In the past decade, the number of people without access has fallen to about 17% of the U.S. population, thanks mostly to smartphones which are the device used most frequently to access the internet. Morning Brew

dis-rup-shun: Looking more closely at the numbers, it is clear that rural populations are most under served, as nearly 30% of rural residents don’t have access. The reasons for no access are attributable to service providers, who have chosen not to cover sparse, unprofitable areas, and to legislators who have chosen not to require coverage for every citizen, regardless of location or cost. Of course, some citizens in every geography will not connect even if offered internet service for free due to fear, poverty or illiteracy. Meanwhile Musk and others are launching satellite constellations such as Starlink that aim to place a belt of satellites in low orbit, eventually providing broadband access to almost every geography on the planet. Serving the under served is not a very attractive business proposition, since only a small percentage of the under served desire or are prepared to pay for service. Satellite providers, therefore, will increase the supply of services, locking terrestrial providers such as AT&T, Verizon and T-Mobile/Sprint in an eternal price battle until one party proves that it can differentiate its network sufficiently to charge a premium. All in all, broadband services measured in Mbps per dollar will continue to fall in price as demand for higher speeds climbs. Expect high growth of mobile devices that perform bandwidth hungry functions, such as video and navigation, to proliferate our lives in the coming decade.

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Holiday amusement: looking back at smartphones

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Decade in Review: SmartPhones

To provide a little intellectual stimulation during, hopefully, your holiday, here are some great end of year highlights on the decade from the sharp journalists at The Brew. Some staggering facts:

  • The average person touches their phone 2600 times per day.
  • About 40% of U.S. adults use their phones primarily to surf the web.
  • Nearly 50% of all internet searches are performed with a smartphone.
  • Advertising on mobile devices accounts for nearly 2/3 of all U.S. digital ad spending.
  • Despite the fact that smartphones are the economic bridge for less developed nations to access commerce, education and information, smartphone growth is slowing by about 4% per year.

dis-rup-shun: It is hard to imagine that the era of the smartphone is in its twilight. Smartphones will be around for the perceivable future, but the white hot center of technology growth and transformation is no longer mobile. Mobile devices and apps have reached saturation. While this marks tougher challenges in selling new phones, it marks a period of more innovative uses of smartphones as companies leverage the mobile platform for new ideas. The result will include innovative things that we will do with smartphones, like the already interesting mobile eye exam from EyeQue, or access to home and office, as already offered by many companies such as VizPin. An innovation I am hoping will be well in place at the end of the next decade is mirroring of our desktop. I would like to be able to sit down at any screen — home, office, airplane, taxi, shared ride/taxi, and have my credentials from my smartphone automatically setup up my desktop, so that my inboxes, my in progress Word or Excel projects would be there, just as I left them a little while ago, so that I can resume my activities. The virtual office concept is one that is in development by Samsung and others, but is not yet in use. I will report on the successful deployment of this concept in the decade in review in 2020, hopefully.

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Nexflix is decade’s best stock

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Netflix top stock of the decade

Looking back on the decade, Netflix has won the prize of best performing stock, increasing 4,000%. Subscriber growth went from 12 million who were receiving CDs in the mail, to 158 million subscribers to streaming services. The company divides the world into four regions. After North America, the biggest region is Europe/Middle East/Africa with 47.4 million subscribers, then Latin America with 29.4 million. AsiaPac follows at 14.5 million. CNBC

dis-rup-shun: Do you continue to back the stock of a company with razor thin margins that doesn’t consistently make a profit, is being chased by Disney, AT&T and many other companies with deep pockets? The company’s growth is in international markets where competition is far less, but winning this game requires massive spending. This disruptor has been highly valued for completely changing the video market, but, like another game changer called Uber, will the demand for profits sink its high price? 

China helps finance Tesla

Chinese investors have agreed to back Tesla’s Shanghai-based manufacturing plant with a $1.4 billion loan that will, in part, roll over a prior, smaller loan. Tesla broke ground on the plant in January of this year and expects to produce 1000 model S cars per week by end of this year. CNBC

dis-rup-shun: It seems that Musk did not get the trade war memo, and, like Apple, is leading the charge for continued strong trade relations with China. Such big deals will likely keep the trade war political and prevent walls from being built between the economies. Tesla has what China wants — innovative, stylish cars that don’t pollute. Perhaps Musk can lead the way to increasing the number of global ventures that China will back.

Music embraces big data

As we know, the music industry is on a rebound from decimation by digital download. Gone are the talent scouts and record label promoters, replaced by data analysts who study trends on streaming music sites such as Spotify. By analyzing what’s hot, music producers can predict which artists will sell. Artists, by analyzing data, are able to determine where and with what they will become popular. The likely result is more homogeneity in music, making it tougher for off beat artists to be discovered. Wired

dis-rup-shun: This brings up the discussion, made popular a decade ago by Chris Anderson’s book, The Long Tail, of the value of non-popular content. Digital access makes it very inexpensive to find and enjoy the unusual, less popular books, movies and music. Yet, in the digital age, data analytics helps big business spend its resources finding or making the 20% of content that earns 80% of the revenues. This suggests a streaming service dedicated to the fringe artists, where lots of good stuff is less commercialized, would be interesting to those of us who like fringe stuff.

In-home manicure machine

Coral is a company founded by a former Dolby executive who has received $4.3 million to create an in home manicure machine. Put your finger in a hole in the machine, and out comes a completed, painted nail. Tech Crunch

dis-rup-shun: The salon experience seems, from an observer’s perspective, to be part ritual — going somewhere and spending a few minutes being pampered. While many people don’t have the time to go to a salon but want nails to look nice, this may be a better solution than DIY manicures. Peloton has brought the community workout experience home, and massive multi-player games gives one a sense of community experience at home. Coral likely needs to make its machine deliver more of an experience — perhaps by playing soothing music or brewing tea while it gives its auto-manicure.

 

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Apple building satellites

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Apple enters the satellite race

Apple is hiring satellite engineers and executives. Rumor or conjecture speculates that Apple is building communications equipment (not rockets) that will enable communications between Apple devices from a third-party operated satellite. TechCrunch

dis-rup-shun: Here’s why Apple has to consider satellite technology. Elon Musk’s SpaceX is launching hundreds of satellites even as we enjoy our Christmas and holiday feasts. The plan is for SpaceX’s Starlink mini-constellation to have over 12,000 satellites belting the earth, forming a train of satellites. Not to be outdone, Amazon has announced a constellation of 3,236 satellites to be launched in the future. Tim Cook fears the day that Musk or Bezos provides far superior global Internet connectivity from space, forcing Apple to be second. If Big Tech owns and controls superior global connectivity without inviting traditional carriers such as AT&T, Verizon and friends to play, true monopolies or duopolies (or tri-opolies?) of technology and communication will be formed. Ouch.

Smart home industry brings peace on earth

Once again, major smart home and consumer technology players are forming a standard for control and communication of connected devices, using IP as the standard protocol. “Project Connected Home over IP” is the latest alliance between players such  as Apple, Google, Samsung, Resideo, Amazon, Zigbee Alliance, Ikea and others. The goal is to make it easy to buy and attach devices to your home network, without having to figure out what works with what. CNBC

dis-rup-shun: We need peace on earth and ease of use in connecting home products. We have at least two completely standard home networks today: our home wiring and phones (land line or cellular). Any product using electricity or phone lines (waves) just works… no questions. Removing the friction we have today of many circles of products that work with each other, some with others, some not, it depends, sort of, is no way to grow a market. However, I am skeptical that this will be the breakthrough, as each of these vendors is also supporting and investing in its current semi-open circle of products and alliances, as most vendors are terrified to give up the revenue stream they have now, and therefore their best resources are deployed to continue the status quo, meaning new alliances are the thing of PowerPoint and press releases before CES, every other year. Hopefully I am wrong.

Share Now, formerly Car2Go car sharing service dies in U.S.

The car sharing service owned by Daimler and BMW that put blue Smart Cars in major cities, is retreating to Europe. Wired

dis-rup-shun: The auto industry, and transportation in general, is in turmoil. We like ride sharing, especially the low prices that keep it unprofitable. We like electric cars and speculate that an electric will be our next car purchase after the next one. We think scooters and bikes for hire are fun, until they litter the sidewalks. The truth is that our society is shifting, but just not as fast as the investors behind new concepts wish they would. Like every big sea change, the road to new industries is littered with startups that were there too soon, without a business plan that accounts for human’s intense resistance to change, even when people say in surveys that they like the new ideas. 

How Amazon creates a virtual air force

Amazon is a company that is rapidly growing its logistics capabilities and planning for massive expansion. Sun Country is a small regional airline based in Minneapolis that struggles with the seasonality of passenger travel. Together they will help Amazon grow and help reduce seasonality for Sun Country. The airline will fly 10 of Amazon’s recently acquired Beoing 737 cargo planes. CNBC

dis-rup-shun: Reader, do you get tired of reading about Amazon? The company is a spectacular demonstration of American ingenuity, capitalism, creativity, competitiveness, creative destruction, job growth and economic stimulation. We love success stories, and this is one. We also love the underdog, and just about every business that we work with today is or will be the underdog. Congress, let’s keep the fight fair, but also let the big dog run.

 

 

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You are tracked

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A glimpse into location tracking

A rather disturbing article from the New York Times, using info leaked by an anonymous employee of a data tracking firm (yes, there are firms that specialize in this), reveals that every move by people with smartphones is data made available to tracking firms. Every stop in the liquor store, the green cross, the gas station, church or cabaret is tracked. See some stunning graphical maps of people’s movements online in the article.

dis-rup-shun: It’s the season to be reminded that you are loved, but in this case, you are tracked — every move and every stop. For most people, why worry? For those people with secrets… be worried. For those people running for public office… you’re screwed. Is this reversible without tossing your smartphone in the nearest dumpster? What’s done is done, but data privacy and data security and a dashboard for consumers to turn off or on preferences is critical and should be an FCC mandate. As long as we are enjoying maps, Yelp, weather and just about every other great location -based app, we are being tracked. This is a situation that will not be ignored much longer as some high profile people will soon be embarrassed by some place they visited and regret.

Don’t (FedEx) poke the beast (Amazon)

FedEx stated that its bumpy last quarter is partially attributable to Amazon’s delivery services, but that its new seven day a week delivery services will help it outpace Amazon in 2021. Earlier, FedEx denied that Amazon would have a material impact on its business. Now the company is calling Amazon a competitor with impact. CNBC

dis-rup-shun: I recall Blockbuster’s CEO Antioco saying Netflix was not a material threat, and Blackberry dismissed the iPhone as not a business phone. The shipping wars have started in earnest, and FedEx’s addition of a seventh work day is one of the biggest changes in FedEx’s business in many years. The consumer and small business may benefit from lower prices, if pricing becomes a part of the war. Right now consumers are enjoying the benefits of Sunday deliveries. How does the U.S. Post Office fare in all of this?

A bold look at life in 2030

CNET has been reviewing the decade now ending in a series of looks over the shoulder. In a look at what life may look like in 2030, here are some headlines:

  • Flying and self driving cars will be available — the technologies exist today, but testing and legislation stand in the way. Will these obstacles and business models be smoothed out in 10 years?
  • Always connected means that we are always seeing or hearing more than meets the eye and ear — augmented reality contact lenses, glasses, and speakers, always connected to the cloud, will be feeding us contextual information about what we are doing.
  • Life in the cloud — all of our writings, texts, listening and watching to online conversations, and web searching, to name a few connected things, will live indefinitely in the cloud. We may die, but everything we did will not.
  • Genetic engineering will modify our species — DNA and gene editing, already in experimentation mode, will be performed when deemed ethical (by whom?).

dis-rup-shun: All of these concepts are well underway today, and looking at the amazing technological, business and cultural transformations that have occurred in the past decade, these visions are reasonable. Venture money is already chasing these opportunities. Now education, training and legislation needs to follow, and follow fast.

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Porch pirates beware

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Porch pirate retribution bomb 

A former NASA engineer and YouTube personality, Mark Rober, has developed a new and improved porch bomb to serve justice to porch package thieves. The brown paper parcel, when opened, creates an explosion of bio-degradable glitter, fart scent, and is recorded and automatically uploaded to the web. CNBC

dis-rup-shun: With the proliferation of doorbell cameras combined with the popularity of social networks, it stands to reason that public shaming will eventually reduce doorstep theft. Rober’s device reminds us that packages of even moderate value will soon include tracking devices, and perhaps biometric locks that beam the opener’s fingerprints to the shipper for verification or, perhaps, investigation. 

The decade for wearables

According to research firm Canalys, wearables reached 45.5 million units shipped, growing 65% since Q3 of 2018. Fitbit, an early player, has been pushed down by the success of Apple and Chinese competitor, Xiaomi. Google purchased FitBit for $2.1 billion last month in a bid to keep up with this hot new product category before Apple and Xiaomi run away with it.

wearable-bands.png

ZDNet

dis-rup-shun: The market for wearables was nascent before Apple brought its weight to the party and made smart watches main stream. The question, then, is if Apple will do the same for smart glasses. We know that the company has been working on smart glasses, but are they ready for the mass market, maybe late in 2020, or is this a 2021 product? Probably Apple alone can make smart glasses widely appealing to consumers, and drafting in the wake of Apple will increase the business of those players currently working on glasses — so Apple’s move would lift all boats.

The most popular games of the decade

SlotsTemple, a tracker of gambling, has summed up the decade’s most popular video games, based on user feedback. The best selling title of the decade? Grand Theft Auto V. The most popular genres are action (36%), RPG (23%), Platform & Adventure (18%). The best selling console was the PS4, having sold 102.8 million units. 

dis-rup-shun: The question at the close of the decade will be, can Apple and Google generate significant revenues from casual gamers, or by converting everyday people into casual gamers with smartphone all-you-can-game plans, and cross-platform technologies? While the companies strive to grow the casual gaming pie, my bet is that their success will come at the expense of existing casual games channels rather than by converting the un-gamed.

 

 

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The Media Decade

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The decade of new media

Ten years ago, Netflix was shipping DVDs, DirecTV was the largest pay TV provider, AT&T was making more from land lines than wireless, and Yahoo! was a $24 billion king of Internet. The decade marks the end of content only companies, as most content creators were swallowed by distributors, as evidenced in the recent merger of CBS and Viacom. CNBC

dis-rup-shun: Few industries that have been completely rewired by the Internet are as visible as media companies. We have to also thank the proliferation of Internet attached devices with screens, including smartphones, tablets and smart TVs. Without these connected devices the media distributors could have maintained control of the majority of content. The advent of 5G will accelerate the transition to streaming content services, as accessing anything anywhere at anytime will be even easier than today.

Where will 5G first appear?

The TV commercials have started… 5G networks are here (T-Mobile). But 5G networks are expensive to build and growth will be uneven. The industries that are most anxious to deploy, and therefore invest, in 5G are autonomous cars — providing rapidly updated maps and traffic data in real time, telemedicine — enabling specialists to perform procedures on remote patients, and in manufacturing facilities — 5G will connect assembly robots so that they can be constantly monitored for breakdowns or errors.  Wired

dis-rup-shun: The path to monetization of new networks is clearer in industries that can lower production costs or increase speeds with greater connectivity. Giving consumers faster Internet on smartphones and computers is great, but how much and how quickly will people upgrade to enjoy the pleasures of more speed? We are about to learn.

Amazon bans sellers from FedEx

Amazon told all sellers (58% of all Amazon.com merchandise is from third parties) to cease using FedEx Ground as the carrier’s ability to deliver on time is of concern. This is the latest in a series of jabs between the companies, following a decision in August by FedEx to end express delivery for Amazon. Meanwhile Amazon is building a $1.5 billion air hub in Kentucky,  where 50 planes will be based. CNBC

dis-rup-shun: Is Amazon a bookseller, an online department store, an electronic storefront for hire, or a logistics company? The answer, of course, is all of the above and the bigger question is can Amazon continue to compete with its own customers? Can FedEx and UPS develop loyalty programs to keep their own customers from defecting to Amazon shipping when the Seattle giant begins to offer shipping to companies that are not Amazon merchants? Expect to see either FedEx or UPS develop some aggressive loyalty programs for existing customers in anticipation of the Amazon Effect on shipping.

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Chrome checks password security

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Chrome adding password checkup

Google is adding its password checkup feature to Chrome 79. The feature will scan a registered user’s password credentials to compare them to a database of compromised credentials, notifying the user if their user name and password has been stolen. Wired

dis-rup-shun: Password management continues to be an unwieldy problem that, surprisingly, has not been effectively solved. Storing passwords in a browser is convenient, until one’s browser access is compromised. Retinal scans and finger print readers, though not completely safe, will prove a convenient way to begin  elimination of passwords and their cumbersome rules. Until a better system is developed, make sure to turn on two factor authentication (receiving a code via text message) for important accounts.

Amazon will be one of most important companies in 2020s

Amazon has risen to the nation’s second largest employer in only 25 years. The key to its success, according to CNBC, is its unwavering dedication to giving customers what they want. Putting customer satisfaction first has prevented the company from pursuing a number of distractions, and has built an online store that captures 4% of all U.S. retail sales. Another key factor for success has been its willingness to experiment, and to learn from failures, like the Fire Phone, which was a market flop, but led to development of the highly successful Echo and Alexa technology. The company’s massive scale will lead to increased criticism in the next decade, as competitive practices crush smaller companies and as environmental concerns pressure Amazon’s carbon footprint. 

dis-rup-shun: Amazon, like Facebook, has become a company that people like to hate even while regularly using its services. Expanding its products, services and influence over the next decade must be accompanied by social and community action — helping to support the communities it is reshaping as e-commerce squeezes bricks and mortar. Tim Cook has been quick to position Apple as the responsible company, putting customer privacy first. This action is now pressuring the rest of Big Tech to take a stand, and Amazon will need to become a responsible giant to continue its breakneck  growth.

Google interpreter available on mobile

Google’s interpreter app is now available on mobile devices (iOs and Android), supporting translation to and from 44 languages. The app is activated by saying “Hey Google, be my Spanish translator” and enables speech to text, translation, and other language text to speech. TechCrunch

dis-rup-shun: With 5G coming to many cities in the coming year, using this on-line, mobile translator will be more reliable with faster response time. Better connectivity will enable instantaneous speech translation, enabling long, continuous dialog to be easily translated — more like the United Nations or other multi-language conventions in which a translator is speaking almost in parallel with the original speaker.  

Meet the new boss, a robot

Scaled Robotics has developed a small, mobile robotics device whose specialty is to quickly inspect construction sites. The device’s LIDAR sensor system is able to take accurate videos of construction progress, or lack thereof, compare it to CAD drawings, and quickly determine progress made, alerting workers and management of items assembled out of spec. TechCrunch

dis-rup-shun: Is a roving robotic supervisor a friend or foe? The ability of a device to find small flaws in construction will increase quality and reduce costs by finding problems early. Specialists and supervisors could, in theory, manage more projects given that they have a robotic assistant that can scout a job and focus human specialists on exceptions. Expect robotic inspectors to become standard for large and complex construction projects.