Annual 2017 Predictions

At the top of my 2016 predictions was the concern over digital trust, can consumers trust digital systems with their information? It’s hard to say if this year was a tipping point or not, there were quite a few scandals but the primary events that could fuel this disturbance was the San Bernardino iPhone crack and the purported DNC hack that may have been perpetrated by foreign actors. If there is any truth to the latter, the repercussions could be monumental; however, this remains to be proven.

Looking back on this past year, the real stories seem to be focused on the US elections and the zika outbreak; but there was some activity around internet regulation and virtual reality headsets. The declaration of Internet as an essential utility in Canada may eventually help decide how this service is regulated here in the US. Virtual reality continued a growth spurt, but appears to have flat-lined so it may be another year or so before we understand what kind of impact VR may have.

As anticipated on last years list, devices that support voice navigation grew this past year – not only did Amazon introduce new categories of Echo inspired hardware but Google has begun competing with Google Home and Apple added Siri to just about everything. I would expect to see this trend continue and mature as it gains more adoption in the year to come.

Things to watch for in 2017:

1. Apple Eliminates Products. Currently, iPhone represents more than half the business but most consumers no longer have phone upgrades available. This conundrum will impact sales and drive iPhone revenue down noticeably in the new year. Apple needs to adjust accordingly, and will be forced to eliminate one or more products that are not profitable.

The Apple Watch continues to be dicey and is a likely candidate; however, the Mac Mini has a relatively low margin and is one of the least profitable products in the lineup. Equally disconcerting is the AppleTV ecosystem with its finite storage and awkward download size limits, this has the most potential for Apple but seems to be languishing. In the current environment, Apple will likely need to eliminate at least one product next year and either Watch or Mac Mini are likely candidates; of course, they may just choose not to refresh AppleTV and say goodbye to that unsettled business altogether.

2. Android Convertibles. The Microsoft Surface Book has legitimized the convertible laptop, and with many other vendors now building Windows-based convertible portables this seems like a logical space for Google to expand with the Android/Chrome platform.

A lack of touch screen support for ChromeOS means that some amalgam of Android and ChromeOS is needed to power this new convertible laptop, which is likely the genesis behind Andromeda and will arrive sometime mid year with a new line of convertibles by the fall in time for the holidays.

3. Twitter Acquired. Twitter spent most of last year in trouble, and principal executive leadership have already left while the remaining are busy selling off their stake. Once the stock gets below $9 per share they will be ripe for acquisition, some potential suiters include Microsoft and Google.

4. Internet of Things Peak Hype Cycle. We are getting to the peak hype cycle for IoT (Internet of Things), which is a general category describing physical devices that are connected to networks and the Internet. So far, smart lighting and climate control systems have dominated this landscape; the next wave will likely be more focused on how business leverages IoT infrastructure for manufacturing and distribution. Consumers should not anticipate any more truly new hardware in this space, most of what will come next is focused on controlling associations between IoT connected devices.

5. Internet Brownouts. The DDoS attack on DynDNS in the fall of 2016 crippled the eastern United States and took a number of well known Internet properties offline including Twitter and PayPal. This kind of attack on our Internet infrastructure is likely to continue and will intensify as ICANN transitions into a private entity.

Many of the hurdles Apple faces with AppleTV are in fact centered around the struggle they have establishing alliances with major entertainment companies (notably Comcast/Xfinity). It appears Xfinity will be supporting Netflix which suggests they are not going to partner with their content outside the Xfinity ecosystem. This puts a damper on the new Apple TV app as Comcast users won’t be able to take advantage of many of these features.

Just missing from this list is the proliferation of ransomware, which will likely continue to grow by orders of magnitude. Businesses that don’t have a good plan in place for this will be the most damaged, and while ransomeware fees are generally small enough to stay under the radar don’t be surprised to see some high profile cases.