Cicero, the ancient Roman philosopher, is not often quoted in relation to the challenges faced in the digital age, but it is perhaps a sign of troubled times that his adage: “The greater the difficulty, the greater the glory” has been included in a New Year message from the Chinese tech giant Huawei.
In a message entitled “fire is the test of gold”, Huawei’s rotating chairman, Guo Ping, described 2018 as “an eventful year, to say the least.”
Australia and New Zealand have already barred the use of Huawei equipment in 5G networks on security grounds, joining the US and Taiwan in putting curbs on Huawei’s activities.
Japan’s cybersecurity agency has said suppliers deemed high-risk will be excluded from government purchases, hitting Huawei and its compatriot ZTE, while, in the UK, equipment made by Huawei is being removed from the heart of the Emergency Services Network communication system under development for the UK’s police forces and other emergency services.
The issues surrounding Huawei intersect with some of the major themes that will shape the technology, media and telecoms (TMT) industry in 2019, including cybersecurity, 5G, and the impact of China.
Research conducted by GlobalData’s technology thematic research team indicates that companies who invest in the right themes become success stories, while those who miss the big themes end up as failures.
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What to watch out for
The 2019 Tech Theme Map highlights the big themes that are driving share prices for TMT companies and is the result of a series of interviews with senior industry executives and investors, reflecting an up-to-date view of the issues that keep them awake at night. Our theme map covers not only disruptive tech themes but also macroeconomic and regulatory themes.
GlobalData’s latest thematic report, Tech, Media & Telecom Trends 2019, provides a top-down, comprehensive outlook for the key players in TMT, based on the key themes set to transform their industry landscape over the next two years.
China is undoubtedly one of those themes, with the country locked in an increasingly hostile battle with the US for leadership in next-generation technologies, such as artificial intelligence (AI), cloud-enabled technology, and 5G.
Top tech trends
Several TMT sectors are also experiencing ‘the China Effect’. In semiconductors, for example, China’s growing influence over chip manufacturing and, increasingly, chip design is unlikely to be held back by the protectionist policies of the US government under Donald Trump. In fact, current US policy risks causing more harm to the US technology industry than good.
In other areas, China looms large as a potential source of disruption. Not only is China a major market for industrial automation technology, but it is also a major source of investment and innovation. Nearly 2 million new industrial robots are forecast to be sold in 2020, with a third of those in China.
Video gaming is one of the fastest-growing industries worldwide and China is the world’s largest video games market, having overtaken the US in recent years. Tencent is China’s leading publisher and has been aggressively acquiring global properties.
China is just one of the major themes to watch in 2019. Others include:
Much will depend on the outcome of UK Prime Minister Theresa May’s so-called ‘meaningful vote’ in mid-January. If the vote goes against May, then the path towards the proposed exit from the European Union (EU) at the end of March becomes more uncertain. Tech companies are likely to wait until they have more clarity before taking action and then move quickly to implement existing plans. It is unlikely that the largest Silicon Valley companies will be impacted – many of them already have EU operations – but it is the smaller UK players who may struggle to acquire skills, access new European markets, or cope with new, more burdensome business processes. Up and coming US tech companies will still need a base to be able to access European markets, a fact that hasn’t escaped the attention of Ireland’s inward investment promotion agency.
Businesses desperately need reliable new sources of intelligence, not only to help accurately identify when an anomaly may be a genuine cybersecurity attack but also to help with the constant flood of false positives. While still in its early stages, the power and potential of machine learning in support of behavioural analytics in enterprise security solutions is impossible to deny, which is why all the major enterprise security vendors are building, buying, or partnering to add machine learning in support of high-accuracy, intelligence-led solutions. However, machine learning has little value if a vendor doesn’t have a massive data set on which to apply the technology. This will shift the enterprise cybersecurity market to grant a significant competitive advantage to those vendors that not only build the largest data set but also demonstrate the expertise to apply machine learning in such a way that it produces meaningful analytical insights.
In the course of 2017 blockchain became one of the most hyped technologies the sector has seen, with increasingly outlandish claims made about its capabilities and benefits. We expect 2019 to be a difficult year for blockchain technology, as the cost and complexity of implementing blockchain solutions become apparent. The technology will have lost its gloss by 2025, though it is likely to have found its way into the heart of many key business processes, especially those involving multiple, disparate participants.
Next Generation network
5G will become commercially available in 2019 but initial uptake will be minimal, with fewer than 5 million subscriptions worldwide by the end of the year. By 2023, however, GlobalData estimates that 5G subscriptions will have reached nearly 850 million, at a phenomenal compound annual growth rate of 271%. The share of 5G mobile subscriptions is expected to jump from 0.05% in 2019 to more than 8% by 2023.
Internet of Things
The fundamental purpose of the IoT is for connected endpoint devices to sense phenomena in the environment and then react as a result of the data they gather from onboard sensors. The past decade has seen radical improvements in the range of phenomena that can be sensed with innovation driving the cost of sensors down. Silicon-sensors can now measure 3D depth, proximity, and pressure, as well as gyroscopic and acoustic phenomena. Today’s average car carries 60-100 sensors; by 2025 that number will have grown to 500 as vehicles become increasingly autonomous. The same dynamic applies to robotics, drones and, with the arrival of ambient commerce, to backdrops such as ‘grab and go’ and ‘scan and go’ stores pioneered by Amazon in the US and Alibaba in China. However, with IoT taking off, a growing number of non-technology companies are now vulnerable to hacking via connected devices.
Year of the Pig
The coming New Year always has some well-meaning label attached to it and 2019 will be no different. As this year is the International Year of the Periodic Table of Chemical Elements (IYPT 2019), it would be entirely appropriate if 2019 heralded plenty of new discoveries, technological bubble, fizz, and explosive reactions. The forthcoming Chinese New Year will herald the Year of the Pig, apparently a symbol of wealth and good fortune. On the other hand, years ending in ‘9’ often bring upheaval. So, expect a rollercoaster ride.