This year is going to be fascinating because there are so many interrelated moving parts. It’s not all technology. Politically, we’ll have a battle royal in the U.S. between the U.S. president and half of the U.S. congress, which should have an adverse impact on the stock market and create a drag on spending, particularly for the U.S. government. Investigations and trials will, I expect, make 2018 look relatively benign. Then, at some point, there will be an increased focus on information accuracy and that should drive some interesting apps.
But bigger changes are ahead.
A lot has been said about 5G, which begins rolling out early this year. The part we don’t talk about is the part that will likely drive the most dramatic changes in how we do things. I’m talking about low latency; this will allow us to do far more things, like gaming and productivity apps, in the cloud. This should shift preferences from device-focused performance to better batteries and better modems and focus us on cloud, rather than device, features. This will affect everything from where we work to where the power resides in PC and smartphone segments because the cloud will increasingly be king and our devices increasingly more like cable-connected TVs. I expect it will take some time for the PC and smartphone industry to fully catch on to this, but we should get some interesting 5G devices in a few months.https://o1.qnsr.com/log/p.gif?;n=203;c=204663295;s=11915;x=7936;f=201904081034270;u=j;z=TIMESTAMP;a=20410779;e=i
Microsoft Virtual Desktop
Building on 5G and the cloud trend in general is the Microsoft Virtual Desktop, which should get to critical mass this year. Promising a patch- and largely support-free future, this will be the biggest step toward turning desktop hardware into appliances yet. With higher security, nearly unlimited performance on demand, and a vastly improved user experience, this should take us far closer to a time when we’ll never have to set up, update, or back up a PC again.
This should push the power change from PC vendor to cloud service provider ever more aggressively but, I expect, the full impact probably won’t be felt until after this year. This should massively improve the fortunes for the Always Connected PC initiatives and likely have us rethinking old initiatives like Microsoft’s Continuum.
Intel will have to finally settle on a new CEO this year and it isn’t looking pretty. The board, at this writing, appears to be largely lost in what should be an easy decision but since the Intel board has only one truly qualified person on it, this has been like watching a bunch of people run with scissors in slow motion. You know it is going to end badly. You just don’t know when that will happen.
The fight with Qualcomm is increasingly looking to be a bad attempt for a large company to bully a smaller firm and the tide of litigation had already been turning against the effort. With the rise of AI, Intel is focused on the wrong trend, 5G, and will likely find 2019 to be a pivotal year, but in the wrong direction for them.
Things are going really badly for Apple at the moment. With the announcement that Apple will fall well short of financial expectations, some have the price target for the stock far below where it is now trading. Much of this is being connected to the trade war between China and the U.S. but that may be because Apple wants to distract from the adverse rulings, injunctions and boycotts in places like Germany and China. This is all distracting from the problem that Apple’s last true hit product was the iPad, which goes back to when Steve Jobs was still alive and connected to the company. The company’s rumored move to automobiles probably won’t go as well as even its execution on the Apple Watch and Home Pod. I mean, if you can’t be successful in a market you know, why would you think you’ll be successful in a market you don’t know? Apple will likely be looking for a new CEO before year end.
Last year, Qualcomm impressively held off both Apple and Intel with a combined market cap often exceeding a trillion dollars and Qualcomm isn’t even a $75B company. Even more impressive is that Qualcomm never really took the gloves off, even though it was clear early on that Intel and Apple were maneuvering to put the firm out of business. With the deployment of 5G and the various trials all over the world seeming to spin in Qualcomm’s favor, this firm could continue to eclipse its distracted rivals largely because it focused on getting things done and not on winning the litigation. The fact that far larger and more powerful firms had to resort to litigation rather than market forces is telling and showcases just how well Qualcomm is executing at the moment.
I’m going to include Tesla in this because it is headed for a bit of a wall (and it isn’t having a great week). You see, power station providers have started to roll out 350 KW and 450 KW chargers tied to the CSS/SAE specification, which doesn’t currently work with Teslas. Tesla Superchargers, currently the fastest in market installed in volume, are only 100 KW. Granted, there are currently no shipping cars that will take this much power. However, the Porsche Taycan, a 2020 car shipping in 2019, has sold out for the year and the buyers are mostly Tesla owners, which doesn’t bode well for Tesla. Tesla’s power distribution network is about to go from strong asset to liability if the firm doesn’t get that proprietary power stations will not work long term any more than gas stations that only worked with Fords would have worked last century. This also suggests, given that Tesla was partially modeled after Apple, that Apple should learn from Tesla’s mistakes before entering the electric car market, but I’ll bet it won’t.
Wrapping Up: 2019 to Be a Year of Surprises
2019 will be a year to remember with firms like Microsoft rising again to power (currently holding a higher market cap than Apple) and long-term market leaders (talking about Apple, Tesla, and Intel) dropping largely due to bad decisions, poor execution, and lots of distractions. I have my doubts whether Facebook will even survive the year, as it seems to be a magnet for catastrophic mistakes, or at least it was in 2018. Even Google is exiting social media and FAANG stocks in general look to be a bad investment.
We are only at the beginning of the year and I didn’t mention yet the changes we’ll see with companies like NVIDIA and IBM as we move to the next generation of AI. We’ll leave that for next week for now. Hold on to your hats, as 2019 looks to be massively disruptive.
Rob Enderle is President and Principal Analyst of the Enderle Group, a forward-looking emerging technology advisory firm. With over 30 years’ experience in emerging technologies, he has provided regional and global companies with guidance in how to better target customer needs; create new business opportunities; anticipate technology changes; select vendors and products; and present their products in the best possible light. Rob covers the technology industry broadly. Before founding the Enderle Group, Rob was the Senior Research Fellow for Forrester Research and the Giga Information Group, and held senior positions at IBM and ROLM. Follow Rob on Twitter @enderle, on Facebook and on Google+