Top 5 Connectivity & Tech Predictions for 2020

 

The smart speaker is a brand new device category relative to many others: The Amazon Echo debuted a scant five years ago, which is far more recent than the smartphone, the fitness tracker, or even AR glasses. But thanks to aggressive marketing and advertising campaigns, low prices combined with frequent sales, and high consumer interest, the smart speaker has experienced unprecedented growth — it’s in half of US respondent’s households, according to Business Insider Intelligence’s Emerging Tech Survey, conducted using the Attest Consumer Growth Platform. Respondents to this online survey were representative of the US population on the criteria of age (18-73), gender, and living area.

 

With the device’s high level of penetration, Amazon, Google, Apple, and others looking to push these devices into consumers’ homes will find that the number of new adopters of these devices will shrink for the first year in 2020. There just won’t be enough interested buyers in the US who haven’t already gotten their first speaker as there have been in years past. But this doesn’t mean that speaker shipments will fall; to the contrary, they should continue to rise as the devices remain highly accessible — consumers can buy a smart speaker for less than the price of a tank of gas — and as people with one speaker purchase additional units and spread them throughout their homes. The smart speaker is now a mature platform in terms of adoption, and will need to be thought of as such, rather than the brash emerging platform it was conceived of in its first few years.

 

 

A dominance which results largely from the companies’ respective abilities to aggregate and analyze user data. The tech giants could deepen their access to user data by becoming wireless carriers, and offer their service at a below-market rate.

 

Alphabet already offers a wireless service as a mobile virtual network operator (MVNO) through the Google Fi program and has also commercialized a high-altitude balloon network service in Kenya with Loon. And Amazon has sought Federal Communications Commission permission to launch a broadband satellite network, which would provide connectivity for large swaths of the globe. But such ventures have failed to significantly threaten telecommunications incumbents thus far, given the industry’s highly regulated nature and the significant infrastructure spending required to operate an independent network.

 

With the US telecoms space expected to undergo a seismic shift as T-Mobile and Sprint attempt to merge, a major opportunity is opening up for smaller incumbents and new entrants. One firm that’s already pouncing is US satellite TV company Dish, which reportedly reached an agreement with T-Mobile to receive wireless spectrum to create its own rival network should the merger be approved.

 

Still, Dish faces an uphill battle, as it needs capital to build out its network and would struggle to poach mobile customers from incumbents. Rather than challenging the incumbents head-on, we expect that Dish will team up with either Amazon or Alphabet to launch a wireless competitor. Dish would bring its telecom industry expertise to the partnership, while its tech giant partner would bring a tremendous amount of capital, a massive user base, and the potential to capitalize on broader business synergies, such as pairing the service with an Amazon Prime membership or a YouTube TV subscription.

 

 

This has been largely led by consumers in emerging markets trading up from their lowend smartphones to midtier devices, which are increasingly providing more value as device-makers work to bring advanced tech to the phones. In 2020, the trend will only accelerate as 5G technology is increasingly incorporated into smartphones, which will make many premium phones even more expensive despite some technical flaws. The value proposition of midtier phones themselves will also strengthen in the coming year, underpinned by two recent moves from Qualcomm.

 

In September, the chipmaker announced plans to add 5G modems to its midrange Snapdragon 6 and 7 series chipsets, which are cheaper alternatives to its high-end 5G chipsets. And earlier this month, Qualcomm showcased new chipsets that will bring 5G “mainstream.” Interestingly, the higher-end Snapdragon 865 won’t have a modem onboard, meaning that devices using it will require more energy and have less room for batteries, limiting the functionality of these expensive phones. But the new, less pricey Snapdragon 765 series will have a modem onboard — though it will be slower than the 865 — and will enable smartphone manufacturers to offer 5G devices for much cheaper. “What this mobile platform allows us to do is get to half the price of 5G devices today,” said Juho Sarvikas, chief product officer of handsetmaker HMD, perCnet. 

 

As consumers see prices for premium 5G phones increase and begin to question the devices’ functionality, 5G midtier phones will become a much more attractive option. 

 

 

Connectivity has become a central part of the auto industry as it enables advanced infotainment systems, deeper vehicle analytics, and improved safety features. As automakers look to differentiate their vehicles through such connected features, they will add 5G connectivity to supplement existing 4G LTE capabilities. The next-generation standard offers faster data transmission speeds and lower latency than 4G, both of which are key for data-intensive applications such as vehicle-to-everything communication or self-driving capabilities. We expect a slew of announcements about forthcoming 5G-connected cars in 2020 due to signs from both chipmakers and automakers.

 

The head of 5G chip designer and Qualcomm has said that 2021 will be when 5G network coverage reaches parity with the coverage of 4G networks, meaning that cars hitting the market that year will likely boast the technology. Automakers, meanwhile, have long been eyeing the tech, with Toyota explicitly targeting a 2020 launch for 5G vehicles. Others have set later targets (like Ford) or are still in the exploratory phase (like BMW). But given the fairly long development cycle for cars, even those intended to hit the market several years in the future are likely to be announced within the next year.

 

 

US tech leaders have their tendrils in a broad range of segments of the economy, and their influence has drawn the attention of the Department of Justice and the Federal Trade Commission. The investigations are centered on two concerns: whether the tech giants have used their dominance in certain market sectors to unfairly drive away competition and reinforce their positions, and whether they’re looking to parlay a leading role in one segment into another.

 

As cloud businesses get pulled into the regulatory fray, it’s likely that a tech giant — we think Amazon, given its core presence in e-commerce rather than technology — will spin out its cloud business into a standalone company. This would upend the power balance in the tech space, as some companies could lose a major source of revenue. It wouldn’t change the status quo in the cloud market itself, however, as the core tech and clients would likely remain the same, even for a spun out cloud business.