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2015 Technology Surprises Countdown - Top 10

18 December 2015 Dale Ford

Once again, the past year brought many surprises to the technology industry as innovation, competition and market twists and turns kept everybody on their toes. IHS Technology analysts on the Thought Leaders Council created a list of 56 notable surprises in 2015 and voted on them to identify and rank the top 30 technology industry surprises of 2015. IHS Technology has posted five surprises each day this week in a countdown to the number one surprise of 2015. Previously, numbers 30 to 11 were published. Today we present the top 10. Enjoy!

#10 Apple Dual Sourced their Application Processor Chips

Historically companies have maintained multiple sources as a means of supply guarantees. Most of the dual sourcing has been limited to either commodity products or devices that are somewhat generic in nature. In order to guarantee supply OEMs have traditionally qualified multiple sources for the same products.

With the formation of the Common Platform (manufacturing alliance between IBM, Samsung and GlobalFoundries) three companies extended this strategy into manufacturing. These three companies developed a cross-company manufacturing platform that allowed for dual source manufacturing of the same product within multiple manufacturing sites.

In 2015 Apple took this strategy to a new level by using two companies, TSMC and Samsung, to build a custom product using two distinct technology platforms. This strategy resulted in a differentiation of the end system performance. Although the OEM tried to segregate the chips made by the individual manufacturers due to the difference in performance of the system, users were able to identify chip sourcing. In certain regions consumers preferred to purchase products based on the chip manufacturer. This has resulted in manufacturing order pressure based on regional end consumer demand.

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#9 IoT Cybersecurity and Virtualized & Cloud Security Take Center Stage

In September the FBI published a public service announcement about the cybersecurity risks associated with IoT ( Industry experts have known about the risks associated with new connected devices (home, cars, critical infrastructure, SCADA/ICS, medical, etc.) for years, but the general public remained largely ignorant.

The FBI finally decided it was time to send out a warning flare for the general public. Government and private sector researchers have been increasingly focused on threats aimed at new connected devices of all types. The rash of successful hacks in the lab and real world events have forced everyone to take notice. The public has now been warned; the great promise of our growing connectivity-homes, cars, factories, public utilities-also brings the possibility of cybersecurity events that were, until recently, only the stuff of TV and movies.

Commercial rollouts of SDN and NFV are ramping in data centers and carrier networks around the globe, and the large enterprises and service providers rolling them out are overwhelmingly selecting cybersecurity as the first network service to virtualize. Public cloud marketplaces from Amazon and Microsoft are littered with a wide range of "click-to-order" cybersecurity solutions, and every major cybersecurity player in the industry has a virtualized/cloud security products available today. 2016 will be the year that virtualized/cloud security solutions are the primary growth driver for revenue in the cybersecurity technology market.

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#8 Google Bets Big On Solar Power

As part of its strategy to show a commitment to sustainability, and perhaps embracing the long-term potential dominance of renewable energy, Google invested big in 2015 in solar power. "Going green" is no big surprise at any major corporation these days, but the pace at which Google started to make that switch might have surprised some. As well as investing millions of dollars in solar companies, and major solar power plants, Google as continued to make major advances in powering its own operations and data centers by renewable energy - most notably solar power. Having already procured more than 2 gigawatts of renewable power, the company is setting the bar even higher with a goal to have 100% of its operations powered by renewable energy and invest a further $2.5 billion in other renewable energy projects.

Unlike many other corporations that have merely dabbled in renewable energy, Google firmly put its stake in the ground in 2015 and made massive commitments to its solar powered future. Given the cost developments that IHS predicted several years ago, it's no real surprise that Google cottoned on to the fact that investing in solar didn't necessarily need to mean reliance on subsidies and an uneconomic investment. We've been showing cost projections for many years of plummeting prices due to rising volumes, reducing manufacturing costs and higher efficiencies leading to solar being much more cost effective as a mainstream energy source.

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#7 Technical Leaps Propel Powerful Drone Launch

Consumer drones have taken a huge technical leap in the last year, allowing for very low cost, highly-capable and mobile remote sensors with a wide range of potential consumer and commercial applications. The technology to create both fixed wing and multi-helicopter forms with load carrying capabilities ranging from a less than a pound to many kilograms has initially allowed drones to flourish as consumer toys and photography aids, and in commercial applications for videography and remote sensing. This has been used for agriculture, building inspection, maintenance and security, as well as for video capture for films and sporting events. In a very short space of time, drones have found many niches, and as connectivity becomes better and remote self-piloting drones become reliable there are many more to follow.

Perhaps the most interesting upcoming use of drones will be in consumer delivery, as trialed by Amazon. These could be deployed in very high volumes and have a wide range of uses delivering physical goods at very low costs, mirroring the kind of step change that occurred with the development of mass postage previously - a physical distribution technology for the information age. Applications to look out for in the near future might include delivering retail, ranging from groceries to electronic goods, medicines, search and rescue, and critical communication back-up. But drones are already proving very contentious in terms of regulations and use - where they can fly, who can fly them and what they can be used for is rapidly being defined and codified in many countries, and this is likely to be a catalyst to the sustainable development of future uses of drones in 2016 and onwards.

#6 Facebook's Transformation into a Mobile Monetization Machine

The advertising industry was skeptical that Facebook could pivot its desktop-centric advertising business into the mobile-first age. Yet after 23% of the companies' ad revenues came from mobile in Q4 2012, by Q2 2015, it was 76%, making Facebook the unrivalled global leader in mobile display advertising. While other companies struggle to monetize mobile consumption due to low advertising rates, weak advertising creatives, problematic measurement and oversupply of inventory, Facebook has engineered a different story for itself, partly out of luck, partly due to ingenuity.

By accident, the Facebook Newsfeed came into full force in mobile, allowing advertising that was embedded in the flow of a screen swipe and that did not obstruct the reading experience. Through ingenuity, Facebook has made a range of strategic acquisitions around advertising technology, data processing and targeting that allowed the deployment of personalized, targeted, relevant advertising on mobile devices. Paired with its scale and rapid growth in emerging, mobile-first markets, Facebook has turned itself into a mobile monetization machine.

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#5 Major Companies Make Big Investments in Artificial Intelligence

While we may be a long way from true thinking machines, the rapid development of machine learning and basic artificial intelligence (AI) is already changing the way consumers interact with devices and the world. There is a huge interest in developing AI - there are around 50 projects publicly in process right now - many from major companies such as Amazon (Echo), Apple (Siri), Facebook (Graph Search), Google (Now), and Microsoft (Cortana). These incarnations are currently taking the role of personalization/assistance and recommendations/search, but are set to replace traditional manual search engines and provide huge leaps towards predictive technologies mapping consumer behavior.

AI will be at least as far reaching when deployed in navigation and self-control, ranging from connected cars to drones. AI turns IoT into truly independent and capable devices rather than purely programmable sensors. While it's hard to project when AI will reach that next stage, it is likely in the short-term to create a huge volume of new data which is transferred via data centers housing a centralized AI processor - this is the architecture currently used. This will put huge demands on global data transmission infrastructure as requests and data for learning is rapidly moved around from input/output locations and the center.

#4 China Goes Global in Component Manufacturing

Over the past three decades China has primarily been a world manufacturing hub, offering low cost manufacturing capabilities using components sourced from global companies headquartered in other countries. Chinese companies have imported these components to use in the manufacture of electronics systems that are then exported for sale around the world. This is changing, and changing quickly, as China is now committed to a path to become a dominant global component manufacturing leader, competing with global component manufacturing companies in the US, Europe and Japan.

Recent indications of this trend include some aggressive financial moves to break into the global component manufacturing business. Some interesting developments include Tsinghua Unigroup's spending of $9.4 Billion USD over the past two years buying stakes in Western Digital Corp and Power Technology Inc. and recent statements from the CEO of their desire to invest $47 Billion USD, a huge sum, to build a top leadership position in global NAND chip manufacturing. Additional indicators of this trend include Hua Capital Management Co Ltd, acquiring OmniVision Technologies for $ 1.9 Billion USD. Finally, more recently there is speculation that China Resources Holding has placed a competitive acquisition bid to ON Semiconductors existing bid to acquire Fairchild Semiconductors. These are clear indications that we can expect to see big changes in the component manufacturing landscape within the next five years.

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#3 Flexible Displays Make Paradigm Shift On Form Factor

2015 can be recognized as the first year of the flexible display century. We have been talking about this technology for a long time and the official commercialization of real products in 2015 represents the dawning of the new flexible display form factor, not only on smart mobile devices, but also on future consumer electronics devices like signage and TVs.

While consumer electronics devices are fed with conventional and long lasting form factors, flexible displays bring new innovation to the world, especially on the merits of the maximization of "freedom of design". Samsung launched its new Galaxy S6 Edge Plus smartphone with a flexible OLED, which has become a hot shot in the smartphone market. Apple launched the Apple Watch with a flexible OLED display supplied by LG Display. As more display manufacturers like BOE, Tianma, AUO and JDI join as suppliers of flexible displays, we see the beginning of a new era of flexible displays.

However, the production of flexible displays requires multiple different processes, equipment, and materials compared to conventional FPDs, including flexible substrates, transparent electrodes, thin film transistor (TFT), display modes, and new manufacturing technologies. All these elements are intertwined in a complex manner, meaning that individually optimizing them is a challenge. In 2015 particularly we see several panel makers breaking through these challenges.

We forecast that Flexible display revenue will increase to $23 billion in 2024 at a CAGR of 43.9% (2014-2024). : Flexible display shipment area will reach 19 million square meters in 2024 at a CAGR of 88.6% (2014-2024).

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#2 Extending Global Connectivity

The past year has seen the development of solid momentum behind the goal of providing connectivity where there is currently no connectivity, and providing capacity for advanced services. The main challenges are to provide internet access to the billions of people who don't have access to any type of communications currently, often due to poor local infrastructure in remote and developing regions, and limited international interconnectivity between regions. Major investments are being placed on technologies such as high-altitude near-space vehicles, like balloons and drones, and low-earth orbit (LEO) satellites to provide access network coverage in hard-to-reach areas.

The amount of data delivered globally is expected to grow to 45 ZettaBytes by 2030, with growth ranging from IoT to artificial intelligence (AI) to consumer content and services. This demand will require large-scale global data networks that are much more extensive, varied and with much higher capacity, utilizing the full range of wireline and wireless options available, terrestrial and space, across a range of spectrum and transmission mediums.

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#1 Paving the Way to the Autonomous Car

In 2015 the automotive industry woke up to the launch of autonomous car developments by several OEMs (Tesla, Nissan, BMW, Hyundai, etc.) and also from outsiders like Google and Uber. An autonomous car runs completely on its sensors and other electronics and algorithms running inside several electronic control units (ECUs). As a result, semiconductor technology is advancing to enable and support the growing autonomous functions.

This leap towards autonomous cars has created alliances between semiconductor suppliers and autonomous car makers. Some of the noteworthy announcements include:

  • Google buying MEMS start-up Lumedyne
  • Audi signing up Samsung Electronics to its Progressive Semiconductor Program (PSCP) to supply its cars with semiconductor memory
  • Daimler, Hyundai-Kia and Nissan-Renault working with Quanergy's solid-state LIDAR
  • Hyundai investing 2 trillion Won to develop semiconductor chips for autonomous cars

LIDAR is a key addition to the current generation of camera, radar and ultrasonic sensors for realizing a fully autonomous car. Cost, form factor and manufacturability have been the bottlenecks for LIDAR technology. But, Quanergy's announcement on the development of a low-cost solid-state LIDAR scanner is one of the major breakthroughs for autonomous cars this year.

In addition to the sensors, the autonomous car has to be securely connected to external entities and be thoroughly interactive with the drivers and passengers. The rapidly growing deployment of safety applications in automotive platforms will certainly enhance the need for wireless connectivity and related antennas to allow safe and fast communication between vehicles and from vehicles to the surrounding infrastructure.

With this in mind, several players-like Laird Technologies, Katrein, Harada, Hirschmann (VOXX), Kalearo, Alps, and Mitsumi on the RF side; and Continental, Delphi-Fuba, and Laird among the tier 1-are looking at smart concepts in order to concentrate all RF antenna functions into a single optimized box: a "smart" antenna. Such an approach of smart antennas is full of technical challenges such as signal distortion, noise, and interference, as well as interoperability among different wireless technologies-all of which make this segment fascinating.

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Information and analysis provided by the following analysts for IHS Technology:

  • Len Jelinek - Senior Director
  • Bill Morelli - Director
  • Ash Sharma - Senior Research Director
  • Tom Morrod - Senior Director
  • Daniel Knapp - Senior Director of Advertising Research
  • Greg Wood - Senior Director
  • David Hsieh - Senior Director
  • Vinita Jakhanwal - Senior Director
  • Jeremie Bouchaud - Senior Director
  • Akhilesh Kona - Analyst
  • Jeff Wilson - Senior Director
  • Dale Ford - Vice President of Thought Leadership

Posted 18 December 2015


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