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Our views on how changing market dynamics may lead to demand for capital in niche sectors of the economy.

Getting the Digital Perspective

Inflexion’s Digital Director, Charlie Cannell, brings the latest trends from the two biggest technology shows of the year: the Consumer Electronics Show and Mobile World Congress.

Having been the place for consumer electronics for the best part of the 70’s and 80’s, CES lost out to the more internet-related events. Today, with connectivity added to almost every consumer device, CES is more influential than ever. In January 250,000 delegates visited 3,800 exhibits across 25 venues.

Similarly, MWC finds itself in an increasingly influential position. Originally the forum for mobile network operators, this DNA is still clear with much floor space given to infrastructure vendors. However, the advent of internet connectivity and smartphones has made this much more than masts, MHz and SIM cards.

Major technology firms such as Intel and Qualcomm use both shows as their centrepiece industry events; many brands and marketing agencies are also there en masse.

So, what are most interesting themes for 2017?

Voice is the talking point:

Improved connectivity and computing power are accelerating the arrival of voice-activated services. Having spent the last few years concerned with the shift to mobile, we are now faced with a further move to voice-led experiences. Whilst the major tech players all have voice services, Amazon appears to be ahead of the pack with Alexa. Through the launch of this service, Amazon allows manufacturers to provide voice-led services without the time, quality and cost challenge of building their own equivalent. I am pretty sure “Alexa” was the most used word of the week at CES.

A driverless world:

The race to voice-led services is second only to the acceleration of autonomous cars and drones. Audi, Toyota, Faraday Futures and Hyundai all showcased working demos of their driverless cars at CES and there were cars everywhere in the Barcelona show too. Microsoft launched its OS for driverless vehicles in January whilst at MWC, many solutions providers, such as Bosch demonstrated their role in the transformation of the auto trade. (This was markedly in advance of last year when only concepts were discussed). Whilst these demonstrations are limited, the timeline for original equipment manufacturers (OEMs) pushing these vehicles to market is firmer. Currently, Intel’s purchase of MobileEye for $15bn further demonstrates the clear appetite of the major technology firms to create the next generation of mobility experiences.

Flying above cars, the market for drone quadcopters is maturing at a similar rate. Many manufacturers were present with Intel also interestingly choosing to develop its own machines, demonstrating the various use cases from industrial support to entertainment. However, failures like Lily Drone do not help instil confidence.

Connected Electronics Show + Connected Mobile World:

The wide availability of lower cost components drives an increasingly connected world. Sometimes the advantage is unclear, however there are relevant advances in the consumer markets that make sense e.g. sound, heating and maintenance.

At MWC, the shift from an “’Internet of Content’ to the ‘Internet of Things’ (IoT) was ever more prevalent. Major players such as HP and Cisco shared their IoT Cloud solutions (Aruba and Jasper) alongside breakthrough companies such as SigFox, Stream and Arkessa who were offering innovative angles on how to drive value across business and life in a truly connected world.

Reality, checked:

Virtual Reality continues to mature, though remains largely confined to the gaming and education categories. The headsets have improved and offer a truly immersive experience (I could have played the new version of Rock Band all day) compared to the traditional Console + TV set up.

Augmented Reality is arguably more exciting in terms of commercial application to a wider set of experiences; however it is a little way behind Virtual Reality in development. From future shopping to industrial engineering it is increasingly easy for businesses to seamlessly overlay virtual, digital content into real world situations.

From fiction to fact, faster:

Finally, pace; the time from idea conception to a market ready product quickens year on year, both CES and MWC highlight this. The combination of better connectivity, powerful computing and improved processing is beginning to significantly impact delivery. At MWC, much of the discussion surrounded the move to 5G; still requiring major investment but offering the vision of a more seamless and frictionless world of connections. The experience and learning from nearly 20 years of delivering serious web-enabled digital services, it is clear there is a generation of reliable, smarter market-ready ideas coming to the fore faster than ever.

As Ray Kurzweil, a world leading investor and futurist commented, “You don’t know you’re in an explosion until it has happened”. Both CES and MWC suggest that we are in that explosion right now.

For more information, please contact Charlie by emailing charlie.cannell@inflexion.com.