29th May 2019
New technologies have the potential to change the fabric of how we live, work and communicate. Those with the deepest impact can cause a rupture in existing practices and methods, paving the way for paradigm shifts so significant they are termed, “disruptive technologies”. It’s hard to predict when and which companies will best commercialize the opportunities of disruptive technologies, but industry specialists refer to the “digital transformation in nearly every industry in America over the past five years,”1 showing that innovation is already making its mark. Barron’s describe tech as “growth” stocks in 2019, distinguished from defensive or economically sensitive stocks, a clear expression of confidence in this field.2 Below are some important areas to be aware of in the coming year – they are listed separately but many overlap as they depend on and empower one another.
5G: The fifth generation of cellular wireless technology is already here (partially), with Verizon’s October 2018 launch of a home broadband 5G service and AT&T’s introduction of a 5G network in a dozen cities across the USA in December 2018. 5G’s lower latency and faster speeds comprise the essential underlying tech capability required to enable other disruptive innovations. The deluge of data, the interconnectedness of smart devices, sensors and people (from smart-home security to self-driving cars) and the incorporation of intelligent applications all require fast and reliable communication networks. Sector companies are already deeply invested and confident in the success of 5G. 2019 should see additional network launches and these will be followed by 5G compatible products. For example, Qualcomm’s Snapdragon 855, introduced in December 2018, includes the X50 5G modem and will be used in many of the 5G-ready smartphones to be launched in 2019. Both Verizon and AT&T have announced plans to build 5G phones with Samsung.3
Augmented/Virtual/Mixed Reality (AR/VR/MR): Advanced networking technology (thanks to 5G, cloud and edge platforms) is combining with developments in machine learning to facilitate the wider incorporation of AR/VR/MR technologies into businesses, retail, manufacturing, education and recreation. Analysts have suggested that 70-100% of companies will see the operational efficiency and individual productivity potential and incorporate this technology, with its transformative impact on the way we engage with machines, data and each other.4 2019 should see the launch of Google’s machine learning-enabled microscope, which can highlight tissue it suspects to be cancerous as a pathologist looks at samples through the viewfinder. For training purposes, industries with expensive tools or risky conditions are likely to follow Walmart’s use of 17,000 Oculus Go headsets to improve its employees’ skills in compliance and customer service. In entertainment, 2019 will see the availability of stand-alone VR headsets incorporating powerful, dedicated computer technology, from both Vive, Oculus and other smaller companies.
We believe these will overcome previous limitations such as restricting cables or low-powered displays, and encourage VR developers to create more realistic and accurate simulations, resulting in more immersive entertainment experiences. AR and VR should also increasingly be used in collaborative and social platforms, as well as in vehicles, with Audi, Mercedes-Benz, Tesla, Toyota, and Volvo already committed to using Nvidia’s DriveAR platform – a dashboard-mounted display overlaying graphics on camera footage from around the car.1
Artificial Intelligence (AI)/Machine Learning (ML): Advances in AI and ML are at the core of the most cutting-edge technologies to be nurtured in 2019, which is reflected in continued heavy investment by global companies Amazon, Facebook, Microsoft and Google. AI services, platforms, frameworks and infrastructure lie behind innovative applications across a wide variety of domains, including autonomous vehicles, analytics, marketing, data management, training machine learning, personalized retail and biotech. In two consecutive Deloitte global surveys (2016–17 and 2018), AI has topped the list of emerging technologies in which CIOs plan to invest.2 Advances in cloud technology, which promote flexible consumption models whereby companies leverage the expertise and investments of larger tech companies by accessing new applications as services, promote further uptake of AI advances.3 The wider availability of AI and ML capabilities allows for the “democratization” of data access and analysis, thereby supporting ubiquity.
Quantum Computing (QC): As disruptive technologies focus on the gathering (via smart devices + 5G connectivity), storing and processing (Cloud and Edge4 ) and analyzing (AI/ML) of unprecedented amounts and types of data, we can appreciate the central role that QC may come to play in the new technological ecosystems that will emerge. Cloud access to QC is already a reality, with 2019 likely to bring further progress in qubit stability,5 QC capabilities and user-friendly interfaces with this technology. Analysts predict that “Quantum supremacy,” when a QC can perform a certain task that no classical computer could solve in a practical amount of time and using a practical amount of resources, will be achieved by 2020.6 In the USA, Congress passed the National Quantum Initiative Act in December 2018 – a ten-year plan, including $1.25 billion of funding over the first five years from the Department of Energy to support research and development in QC and promote industry participation. Governments, financial services companies, international retail firms and defense establishments continue to join tech giants IBM, Google and Microsoft in recognizing the potential and investing in the future of QC.
1 Karen Chupka, CES executive vice president, quoted in Jon Swatrz, “The Consumer Electronics Show Will Showcase What’s Next in Tech. Here’s What to Watch.” https://www.barrons.com/articles/ces-2019-preview-51546276493
2 Andrew Bary, December 14, 2018, “Top 10 Stock Picks for 2019,” at https://www.barrons.com/articles/barrons-top-10-stock-picks-for-2019-51544837018?mod=article_inline
3 Caitlin McGarry, January 11, 2019, “The Truth About 5G: What’s Coming (and What’s Not) in 2019,” at https://www.tomsguide.com/us/5g-release-date,review-5063.html
4Steve Andriole, “Gartner’s 10 TECHNOLOGY Trends for 2019: The Good, the Obvious and the Missing,” at https://www.forbes.com/sites/steveandriole/2018/10/22/gartners-10-technology-trends-for-2019-the-good-the-obvious-and-the-missing/#7839880b5999
5 Bernard Marr, “5 Important Augmented And Virtual Reality Trends For 2019 Everyone Should Read,” at https://www.forbes.com/sites/bernardmarr/2019/01/14/5-important-augmented-and-virtual-reality-trends-for-2019-everyone-should-read/#7b97895222e7
6 Bill Briggs, Scott Buchholz, “Tech Trends 2019, Executive summary,” at https://www2.deloitte.com/insights/us/en/focus/tech-trends/2019/executive-summary.html
7 “2019 Tech Industry Outlook,” at https://deloitte.wsj.com/cio/2019/01/06/2019-tech-industry-outlook/
8 The “Edge” describes the computational processing of data from smart devices in the Internet of Things (IoT), in physical proximity to those devices, rather than sending it to the Cloud.
9 A qubit is the basic unit of quantum information—the quantum version of the classical binary bit.
10 See Duncan Stewart for Deloitte, “Quantum computers: The next supercomputers, but not the next laptops. TMT Predictions 2019,” Dec 11, 2018, at https://www2.deloitte.com/insights/us/en/industry/technology/technology-media-and-telecom-predictions/quantum-computing-supremacy.html. Also see Jacob Aron, “Revealed: Google’s plan for quantum computer supremacy,” New Scientist, August 31, 2016, www.newscientist.com/article/mg23130894-000-revealed-googles-plan-for-quantum-computer-supremacy/.