Five Consumer Technology Trends To Watch In 2013

2013 will undoubtedly be an “interesting” year for consumer technology. While devices like tablets and smartphones go from strength to strength, PC makers and traditional CE makers in TV, audio, and cameras continue to struggle to turn a profit . . . and that’s before you factor in high-street retail woes and no end in sight to recession-driven belt-tightening. Aside from ongoing evolutionary trends, what will really break through in 2013?

  1. Kickstarter-funded projects need to deliver. One of the breakout successes of 2012 was Kickstarter. Although started in 2009, it was only in 2012 that high-profile projects started to appear and get funded. The downside of this popularity is that more and more projects from inexperienced business startups are appearing. This has led to some high-profile disasters, such as the Code Hero debacle, and a number of projects (particularly games) being abandoned following funding success. Delays are even more endemic: CNN Money compiled a excellent list of the top 50 projects, and just eight shipped on time. In 2013, some of the larger projects, such as the Pebble Watch or Oculus Rift system, need to reach consumers if Kickstarter is to maintain its reputation; the increasing recognition that giving money doesn’t entitle the donor to much if a project goes pear-shaped doesn’t help here.
  2. Tablets will really take off, with multiscreen becoming a focus. After a slow start at the beginning of 2012, tablets from Apple, Amazon, as well as Google and partners were flying off the shelves by year end; this was less true for RIM and Windows RT devices. Predicting that this category will grow in 2013 is like predicting that gravity will keep working at this stage. But what other trends will the success of tablets lead to? Probably the most important is the rise of multiscreen behavior  particularly when looking at consumer media. Techies have been networking and syncing devices for years, if not decades, but it’s only with the rise of the iPad, Nexus 7, Surface RT, and Amazon Fire HD that normal folks have a device that is seamlessly synced to their media libraries, browsing history, and AV equipment. This allows new behaviors  such as a) two-screen movie/TV viewing (see Microsoft’s Smart Glass); and b) bookmark portability — both for browser bookmarks and eBooks — meaning that you’re always able to pick up where you left off.
  3. Cloud services and streaming will improve. While enterprise cloud investment continues to be the “next big thing” (as per IDC, Gartner et al), consumer cloud services are going from strength to strength. Apple, Google, and Amazon will now store nearly your whole media library in the cloud, facilitating even more of the multiscreen behavior described above; and Dropbox, SkyDrive, and Google Drive make sharing files between devices and friends easier than ever. Streaming services like Spotify, Pandora, and Deezer are gaining momentum as broadband connectivity becomes more reliable and usage caps get higher.
  4. Gaming will reach a crossroads. 2012 was not a good year for videogaming; a number of developers and publishers closed, and retail was hit hard. Aside from the obvious reasons for this (recession spending reductions and home consoles getting long in the tooth), the rise of both tablets and free-to-play (F2P) games has changed the gaming landscape enormously. 2013 will see the release of new consoles from both Microsoft and Sony, but those publishers that fail to adapt to the new realities of the marketplace may well follow THQ into bankruptcy.
  5. Smartphone proliferation will put new functionality in consumers’ hands. As with tablets, it’s pointless to cite a trend of greater smartphone adoption. It’s far more interesting to look at what new functionality will reach critical mass because of the rapid life cycle of phone development, fuelled by rabid consumer demand. 2013 will see:
    1. NFC and mobile payments reach early-stage critical mass. Whether you’re looking at embedded NFC applications or add-on dongle payment services (like Square , Bank of America , or ROAM), the rapid adoption of new smartphones means many consumers will have access to mobile payment technology sooner rather than later; of course, whether they then feel comfortable making payments this way is a more complex question.
    2. Wireless charging. While 2009’s Palm Pre was one of the first consumer smartphones to offer built-in wireless charging, that device sank along with the rest of Palm (thanks HP!). Now, though, devices from Nokia, Google, Motorola, HTC, and Samsung allow for wireless charging; some, like Nokia’s Lumia 920 and Google’s Nexus 4, include the phone end of the technology by default. Even better news is that most of the devices use the Wireless Power Consortium’s Qi standard, so one charging mat should serve for multiple devices.
    3. The return of Bluetooth for non-headset devices. After a huge explosion in the availability and usage of Bluetooth headsets and hands-free speakers back in the mid-noughties, it seemed that Bluetooth had pretty much had its day; Wi-Fi and high-bandwidth communication protocols like WHDI seemed like the way forward. However, newer versions of Bluetooth (v4) offer better data rates and lower power usage. More importantly, as tablets have grown in popularity, a swath of new accessories has emerged: game pads, keyboards, and portable speakers all trade high data rates (or sound quality) for ease of use. 2013 will see even more of these accessories combined with new usage models — just look at a bunch of those popular Kickstarter projects. In many cases, they pair up nicely with wireless charging — see JBL’s Wireless Charger Speaker for the Nokia Lumia.

Bubbling under

These technologies will make an impact in 2013 but won’t reach critical mass:

  1. 3D printing. Consumer 3D printers are a tremendously exciting field for tinkerers and hobbyists; the ability to print small but complex objects in a variety of materials has the potential to revolutionize many aspects of our lives (distribution, repairs, art, etc.). But it’s all just “potential” at the moment: Consumer 3D printers are messy, are difficult to set up, and struggle with certain shapes (depending on the technology used). Expect lots of stories in 2013 about 3D printing (3D print shops, IP theft, etc.) and significant advances in the quality versus cost of devices from Makerbot, Ultimaker, and Fab@home, along with better software tools . . . but don’t expect to see millions of these devices in consumers’ homes. The 3D print bureau service (like Staples or 3Dprintuk) seems more likely to grow in the short term, in the same way that Kinko’s provided printing and duplicating services for consumers before cheap multifunction printers arrived.
  2. Augmented reality and 3D headsets. High-profile announcements from Google and the increasing power of smartphone and tablet platforms have reignited interest in augmented reality. Similarly, Kickstarter Oculus Rift has created buzz around 3D headsets. Both of these technologies will offer more immersive experiences, better UIs, and more natural engagement with technology in the future, but component costs, portability, and limited processing power mean that 2013 will not be the year of “X reality” — be it augmented or virtual.
  3. Streaming video to smart TVs and the death of traditional ‘broadcast’. It seems strange that when we’re talking about multiscreen viewing and cloud services taking of we are still some way off of Smart TVs and TV-based internet video services becoming successful. 2013 will see this space ramp up significantly – with potentially Apple, Sony and Intel getting in to the space (news from CES may offer some insight) – but rights issues, complexity, long replacement cycles and mainstream consumer apathy means it will be some time before traditional sources for TV content (ie pay TV providers) see significant threats emerge. The exception to this rule may be emerging markets where broadcasters don’t yet have sports and movie rights tied up and lack a critical mass of signed-up consumer households – Smart TV video services could make real inroads here – but hardware prices will stymie much of this.

The Synology And Symform Partnership: The Future Of Consumer And SMB Storage

Last week, Synology announced a partnership with innovative cloud storage firm Symform. Finally, someone is combining the peace of mind and worry-free connectivity speed of the network-attached storage (NAS) drive with the convenience of cloud storage. Arguably, this is targeted more at small and medium-size businesses (SMBs) — those big enough to have a security and backup policy but too small (or too cheap) to build an enterprise relationship with a commercial cloud provider like Amazon. However, even with my consumer-focused hat on, I see a lot to like:

  • It allows a trickle update of cloud files. As anyone who has wondered what the hell Microsoft’s SkyDrive desktop app is doing as it whirs away for a couple of hours will know that syncing to the cloud is still pretty tedious — especially if your connectivity speed isn’t up to scratch. By adding a central repository of your data on the always-on NAS drive, you bypass this issue while still ensuring your files are available in the cloud.
  • It pairs two technologies that lack sufficient mainstream appeal, creating a compelling hybrid. As I’ve said before, NAS technology hasn’t hit the levels of popularity that I expected it to 5-8 years ago; it will ultimately be replaced by cloud storage — but not for many years yet. I’ve also said that in the long term, cloud storage isn’t really an “application” or a ”service”; it’s a facet or feature of other applications or services. Pairing lots of local networked storage with cloud back-up (or even just key directory duplication) means that you are getting the best of both worlds now rather than waiting for all-encompassing, super-reliable online services of the future.
  • Symform’s business model doesn’t limit the amount you store in the cloud (unlike its competitors). Effectively, Symform works as a coordinator of available peer-to-peer (P2P) storage: Agree to let Symform use some of your space hard disk space (either on a PC, a NAS drive, or a server), and it will give you half of that amount as cloud storage for free (on top of the initial 10 Gb allowance). Symform promises secure, regulatory-compliant, globally distributed cloud storage for little more than the price of adding a new hard disk to your rack/NAS /PC – and that’s if your storage is nearly full. Of course, you can pay as well . . . but that makes the offering significantly less attractive.

But, there are some bridges yet to cross:

  • It still means shelling out at least $500 for the local storage. Cost remains the biggest issue for consumers or small businesses looking at network storage. Why would you pay at least $400 for the most basic 2 Tb Synology NAS set-up (for example, the DS212j plus two Western Digital 2 Tb drives) when you can buy a 3 Tb Seagate external USB3 drive for $135?* Well, there are lots of reasons that a seasoned IT professional would recognise: availability, redundancy, multidevice access, file syncing, and management tools to name a few . . . but none of these resonate with mainstream consumers (oe even the small end of the business world). Let’s not forget that consumers are still failing to manage and back up the gigabytes of unique and irreplaceable content generated by their digital cameras.
  • Symform’s business model is both a blessing and a curse. While I commend Symform for coming up with something different from the largely interchangeable offerings of Box, Microsoft, Google, Amazon, and Dropbox, there are still some thorny questions that need answering:
  1. Can Symform make money if only a small fraction of users pay for storage? Of course, you could argue that the same can be said of Dropbox or Box; at least Symform doesn’t have to invest in building massive storage capacity to support its service.
  2. Can a P2P solution rival a big honking data center in Texas for reliability and speed? Again, there is a persuasive argument that P2P is more robust and efficient than traditional “client-server” models — just look at BitTorrent technology. As with BitTorrent, redundancy will be the key; its imperative that a user’s files aren’t corrupted if another customer’s storage node drops out of the pool.
  3. Is it legal? This is an argument that could run and run (and I’m not a lawyer…don’t even play one on TV). Government agencies already frown upon cloud solutions which store files/data outside their home geography. Does distributing tiny fragments of files globally make this better or worse? Similarly, can the US government ask for access to customers’ files as they can from other US cloud providers? Incidentally, it’s a myth that the 2001 Patriot Act makes the US the only country able to do this.
  4. Given the above, is Symform a long-term bet? Back-up is, by definition, all about peace of mind. You want your data to be secure both now and for the foreseeable future. This makes Symform a risky bet for businesses — although at least switching to a different service is easier these days than replacing actual physical back-up devices.
  • The security and confidentiality of cloud storage will continue to be an issue, especially given Symform’s business model. When it comes to cloud storage, IT pros rightly point out that file security and confidentiality can be a real issue; you are effectively transmitting your files (usually unencrypted) to a remote data centre protected by a single password. And you could argue that this issue is compounded by Symform then farming out the virtual data center to other individuals’ NAS drives.

Overall, I hope that Symform succeeds — they are trying something different and in theory offering a valuable free-ish service with little downside. The Synology partnership certainly strengthens its hand, while also making its NAS drives more appealing. There is bound to be a shake-up in the cloud storage market in the next 12 to 18 months; too many firms are offering free or low-cost storage with little differentiation. Symform at least has the advantage of a different infrastructure and business model.

* Of course, we’re not strictly comparing like with like here; the 2 Tb Synology set-up is offering RAID redundancy, and it could be configured as a 4 Tb storage option

Sony Buys Gaikai: A Solid Investment In Future Services

This week Sony, or more specifically Sony Computer Entertainment, bought Gaikai — the streaming game service. Rumours of a tie-up had been circulating prior to E3, and Gaikai had made no secret that it was on the market for around $500 million. The $380 million Sony paid is well under that, but even so it must have been a difficult decision given the Sony group’s current performance.

What does the purchase mean for Sony and the wider gaming market?

  • Sony is buying networking and service platform expertise . . .  Sony has struggled long and hard with online services and software: its PlayStation network is now robust but suffered an embarrassing hack attack last year, while its PC and phone software (Media Go, PlayStation certification for phones) seems to lag a generation behind folks like Apple or even Microsoft. Gaikai’s core networking and service delivery expertise can fix many of these issues in a relatively short time (months rather than years).
  • . . . as well as console backward-compatibility. Despite consistently offering by far the best access to and support for older titles of today’s three platforms, Sony has long been the recipient of gamer complaints about the removal of backward-compatibility as it has released new hardware iterations of the PS3. Streaming potentially allows both backward-compatibility for today’s PS3 and, potentially more intriguingly, for the future PS4 — allowing it to run today’s PS3 games without additional hardware.
  • Non-console devices can join the game. While not explicitly stated as an aim for Sony Computer Entertainment, its rich gaming back catalogue, along with Sony’s engineering expertise in PCs, TVs, tablets, and phones, means that PlayStation games could now come to all of these platforms. This would provide a USP (if kept exclusively to Sony hardware) and an additional revenue stream for games with little additional investment.
  • Where does this leave Microsoft? Microsoft is already working with OnLive, the rival (and arguably more well-known) game streaming service. However, the relationship has been rocky at times (see this). Does Sony’s news justify Microsoft engaging more here — or even considering an acquisition? Probably not, if Microsoft (along with investors like HTC) can get ready access to the technology as ‘partners’ – Microsoft is already much more competent at online execution in gaming.
  • Connectivity will need to take the strain. One thing is for sure, users will need solid, fast, low-lag broadband connections (and in-home wiring/wireless) to make any of these streaming services work consistently. Netflix and Hulu sometimes struggle with one-way traffic when streaming video into the home; gaming services need to do this as well as upload user actions and act on them at the server end. Let’s also not forget that consumers surrender some of their control with these services — starkly illustrated by the storms last week that took chunks out of the Amazon cloud. This is slightly inconvenient if you want to post your latest wedding dress photo to Pinterest; it’s disastrous if you are 3 to 4 hours into a streamed gaming session without a local save!

Online Cloud Storage: Future Table Stakes Or Killer App?

Google has at long last officially announced Google Drive, and tech blogs are awash with comparisons to Dropbox, iCloud (slightly unfairly), SkyDrive, and other cloud storage services. The early consensus seems to be that SkyDrive just wins out in terms of free storage and incremental paid storage (particularly if, like me, you already had a SkyDrive account and opted in to the free 25 Gb capacity upgrade), while none of the main platforms support all the clients that you may have been hoping for (omitting Linux, Android, iOS, or Windows Phone depending on which platform you’re looking at).

This explosion in available online storage has looked inevitable ever since Dropbox (and several other firms) really hit home with simple desktop folder-like services that don’t try to do too much (sync calendars, offer workflow solutions, etc.). Security experts will argue about whether the encryption is up to snuff (it isn’t), but most consumers will be storing personal (non-confidential) material on there anyway.

Arguably, we’re only at day 1 of the real competition. Features (and third-party clients) will be added, the free storage amounts will (inevitably) increase over time, and different business models and audience segments will emerge — for example, services for SMB customers are already available.

The key question, though, is whether these firms can make a business out of this. In the short term, certainly — as long as they’re offering something that isn’t free elsewhere (remember those “premium” web email services that offered more storage before those limits pretty much disappeared — thanks, Google) or that has better functionality/is easier to use than the competition (Dropbox still scores well here). The problem for the pure-play offerings is that when storage becomes just another feature of Microsoft’s, Google’s, Amazon’s, or Apple’s online offerings — most of which are free or wrapped up in one easy subscription — the justification for paying separately for the service disappears.

This is where the dreadful “stickiness” term comes into play: Dropbox, ADrive, JustCloud, SugarSync, and hosts of others need to fight to make their service so attractive (or difficult to give up) that continuing to pay a reasonable fee seems the best option. But this is tricky; they can’t offer more and more storage, and erecting barriers to prevent consumers moving their files elsewhere defeats the whole object of the service. In fact, as the once-superior Dropbox client shows, any advantage is likely to be short-lived. One possible key to survival is making the storage useful to the user’s social circle, not just the user. I’m less likely to move my thrilling 4-hour video of the kids’ last birthday party if it means I have to bring the grandparents up to speed on how to register for and access a new online storage solution. Dropbox is introducing direct links to customers’ shared files, which is a nice step in this direction.* Its referral program’s offering of extra storage for each person you get to sign up has also swelled its customer ranks nicely to 50 million people – that’s a lot of people, and unlikely to decline too rapidly.

However, I’m not convinced that the best route for Dropbox and its ilk beyond the next 12 months isn’t to get bought by the likes of a Google or Microsoft looking to grow their own user base. An alternative, for the more ambitious pure plays, would be to partner into an emerging ecosystem to fight the established players; combine online storage with a social network, Twitter client, location service, and mobile data plans, and suddenly you are looking at a compelling bundle. Unfortunately, most of these other apps are free to use and already have privacy concerns, so online storage of personal files may not fit well with this. Google will have to face this challenge itself.

* (In fact, Dropbox’s official blog pretty much uses a [less cynical] word-for-word version of the previous example, which I’ve only just looked at, honest!)