Gp Bullhound Technology Predictions 2014
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INDEPENDENT TECHNOLOGY RESEARCH s TECHNOLOGY JANUARY 2014 GP BULLHOUND TECHNOLOGY PREDICTIONS 2014 2014 PREDICTIONS For the seventh year running, GP Bullhound is publishing its Technology “BREAKTHROUGH IN INDOOR Predictions for the year. LOCATION, COMMUNICATION AND MARKETING” Over the past year, we witnessed a booming technology sector led by new stock market highs with the Dow and S&P 500 both up more than 20%, while “EYE-TRACKING REACHES the Nasdaq soared over 30%. Nonetheless, we predict a continued growing, CONSUMER MASSES” dynamic technology sector in 2014 led by new innovation. “SHOPPING GOES ‘CLICK & MORTAR’” Our predictions range from indoor mobile location technology that look set to fundamentally change how individuals communicate with corporations and “SMART MACHINES MARKET TAKING-OFF” institutions indoors, to eye tracking human machine interface technology reaching the mass markets. “THE BATTLE OF “WHERE“ WILL UNFOLD” We’re also excited to see how consumers will pursue cross-channel purchasing decisions due to the intersection of retail and online shopping. “SOCIAL MESSAGING MARKETS WILL Smart machines will see increased adoption, because of the continued growth CONSOLIDATE” of highly intelligent personal assistants, advanced global industrial systems “ADVANCED DATA and autonomous vehicles. Technology companies in the map data market ANALYTICS CLIMBS TO TOP sector are also expected to see a big 2014 as the battle for the number one OF CORPORATE AGENDA” position unfolds. “MARKETPLACES WILL GO Other trends include the mobile messaging app landscape consolidating, data VERTICAL” analytics experiencing increased adoption by businesses and individuals alike “CLOUD STORAGE and marketplaces becoming increasingly vertical with many new winners PLATFORMS GO MAINSTREAM” emerging. Cloud technology is also firmly here to stay with user adoption growing rapidly due to pricing and free space. “CURVED SMARTPHONES WILL FLOP IN 2014” As an anti-trend, we also believe that the latest hype - curved smartphones - will fail to gain widespread adoption in 2014. All in all, we expect 2014 to witness significant growth and mainstream adoption of new exciting technologies with plentiful opportunity to investors CHRISTIAN LAGERLING and entrepreneurs that are able to navigate around and distinguish between [email protected] San Francisco: +1 415 986 0196 pockets of hype and real opportunities. PER ROMAN [email protected] Stockholm: +46 8 545 074 03 STIRLING ADELHELM [email protected] San Francisco: +1 415 986 7480 LILJANA XHEKA [email protected] San Francisco: +1 415 200 4281 Important disclosures appear at the back of this report GP Bullhound LLP is authorised and regulated by the Financial Conduct Authority and the Prudential Regulation Authority GP BULLHOUND – TECHNOLOGY PREDICTIONS 2014 TABLE OF CONTENTS A RECAP OF GP BULLHOUND’S 2013 PREDICTIONS......................................................... 1 BREAKTHROUGH IN INDOOR LOCATION, COMMUNICATION AND MARKETING ........... 3 EYE-TRACKING REACHES CONSUMER MASSES .............................................................. 4 SHOPPING GOES ‘CLICK & MORTAR’ .................................................................................. 5 SMART MACHINES MARKET TAKING-OFF .......................................................................... 6 THE BATTLE OF “WHERE” WILL UNFOLD .......................................................................... 7 SOCIAL MESSAGING MARKETS WILL CONSOLIDATE ...................................................... 8 ADVANCED DATA ANALYTICS CLIMBS TO TOP OF CORPORATE AGENDA .................. 9 MARKETPLACES WILL GO VERTICAL ............................................................................... 10 CLOUD STORAGE PLATFORMS GO MAINSTREAM .......................................................... 11 CURVED SMARTPHONES WILL FLOP IN 2014 .................................................................. 12 0 GP Bullhound LLP GP BULLHOUND – TECHNOLOGY PREDICTIONS 2014 A RECAP OF GP BULLHOUND’S 2013 PREDICTIONS Before we dig into this year’s exciting list, here’s a brief recap of last year’s predictions and how we saw the development in the year. Collaborative consumption A year ago, we predicted that collaborative consumption would become the new becomes the economy and 2013 supported this trend. We saw a breakthrough in collaborative new economy models across industries with entire product and company lifecycles now incorporating social elements. For example, the iPhone tripod Glif was funded via crowdfunding platform Kickstarter, co-conceived by 3D design community Disruption of Shapeways, later sold through CMS online commerce Shopify using online education to payment solution Braintree, and produced on demand by Premier Source. All the accelerate steps in the development of the iPhone tripod Glif were managed through collaborative consumption platforms. The rise of We also predicted that education disruption would accelerate in 2013, which did curated and / – occur. The Massive Open Online Courses (MOOC) addressable community was personalized 1 content estimated to reach 2bn last year as more than 70% of users cannot afford higher education. Major brands including Google, LinkedIn, SAP and Bank of America – joined in to address this huge market opportunity by partnering with leading Gesture and MOOC companies. While online education adoption accelerated, one drawback touch controls has been course completion rates, which currently average at less than 10%2. emerge as standards Curated and personalized content did surge in 2013. Pinterest blew past 70m users in July and is currently expanding in 10 new countries after seeing 125% growth internationally. Other traffic theme and plugin curation companies (e.g. Consolidation to snip.it, Scoop.it, Storify.com), enterprise level curation tools (e.g. Curata, continue, led by big four bagtheweb, Darwin Ecosystem, Storination), secondary content platforms (e.g. Flashissue, Zootool, mySyndicaat Utopic) and curation reading platforms (e.g. Feedly, Pulse, Pocket, Trapit) also witnessed strong user adoption growth in 2013. Video calling goes corporate – Gesture and touch controls were big breakthroughs in 2013 and began to reach mass adoption. Leap Motion began shipping its eponymous motion-control device in the summer and launched software to control both OSX and Windows Microsoft to applications. In addition, Apple’s acquisition of PrimeSense in November dominate next highlighted the industry shift in human-computer-interactions to gesture and touch game console controls. cycle We predicted that the ‘big four’ Internet players would dominate the technology M&A landscape, which broadly proved correct. Google led the pack and acquired Gamification – 22 companies for $2.2bn3. Google’s largest transaction was the mapping start-up an explosion of Waze, which cost $966m followed by other acquisitions such as innovation SurveyMonkey.com, LendingClub Corporation, Makani Power and Wavii, Inc. The acquisition of PrimeSense by Apple and Onavo Mobile by Facebook also IP arms race supported our prediction that the technology goliaths would acquire companies in intensifies in a number of high growth areas such as smart mobility, wireless, cloud computing, 2013 social networking, business intelligence and e-commerce. We predicted that video calling would have a more prominent place in the Wearable tech – corporate arena and improvements in user-interface and underlying technology the health app / – provided some support for the trend, although widespread adoption has yet to breaks through occur. One interesting addition to the market was Sqwiggle, a new emerging – platform that offers an all-day online service to help remote business teams stay connected via text and instant video calling. The company closed a $1.1 million 1 Source: McKinsey Research 2013 2 Source: Sebastian Thrun from Udacity Nov 2013 3 Source: Capital IQ as of Dec 2013 1 GP Bullhound LLP GP BULLHOUND – TECHNOLOGY PREDICTIONS 2014 round of seed funding in August, raising about 30% through AngelList's newly launched Syndicates.FA Contrary to our prediction, almost two months since Sony’s PS4 and Microsoft’s Xbox One were released; actual sales numbers show that the Sony console was favored over Microsoft’s. Both platforms performed well with the PS4 and Xbox One selling out almost immediately and each company selling over 1m consoles during the launch period. However, Sony came out on top in absolute numbers and the reviews have been more favorable as well. The PS4 appears to be more competitively priced, offering more games and it is ~47% smaller in size compared to the Xbox One. We predicted that gamification would play an increasingly important role in business processes and become an essential tool for brand loyalty. This trend proved true primarily because of the always-on mobile age, the explosion of social media usage, the rise of big data, and the emergence of wearable computing. JetBlue introduced TrueBlue Badges, a rewards-based social game platform last summer. Also, InterContinental Hotels Group launched its “Win it in a Minute” gamification program with over 100,000 games played and more than 100m priority club points won during the first two weeks alone. With more than 120m people participating in gamification in the hospitality and travel industry in 2013, other sectors are also adopting gamification mechanics to improve customer engagement. M2 research predicts that