yakovmanshin

Tech Industry Is in Crisis

The year 2016 was tough for practically each tech giant out there. Even tougher was it for the industry as a whole. Just take a look at the products introduced by the biggest tech companies in 2016—and you’ll notice how pale and modest their “revolutions” were, and how desperate, in contrast, were attempts to innovate.

Apple

For Apple, 2016 was a mix of major products’ stagnation and minor kind-of successes.

The iPhone, the company’s locomotive, hasn’t changed significantly (unless you’re a constant music listener, which means you now have to mess around with numerous dongles), iPad sales continued dropping, and the Mac lineup has been updated with a laptop that’s not so “pro” as Apple would like it to be seen.

AirPods, the wireless sibling of EarPods, introduced along with the iPhone 7, has been received with doubts and questions. While Apple succeeded in nailing the pairing process to the state where you don’t have to do anything other than just open the case (which doubles as charger for earbuds), the “one size fits them all” concept didn’t work out seamlessly with human ears (some startups even experiment with headphones you boil in order to fit).

Apple is suffering from its own previous successes: in 2016, the company didn’t hit the bar set earlier by itself. Profits went down for the first time in 15 years, demand for iPhones is declining as the handsets became so good they no longer need to be upgraded every one or two years, and even Tim Cook’s salary wasn’t as big as a year before.

Google

For Google, the year of 2016 started a whole new era: the era of vertical integration.

In addition to developing operating system software and services, the company now makes Wi-Fi routers and, most importantly, phones: Google Pixel is a handset many craved for.

Now, when Google itself is in control of what’s inside the phone, it’s able to showcase the best examples of hardware/software integration in terms of Android, but it’s also responsible for running the businesses of phone-making and OS development in lockstep.

Google is probably the only major tech company that didn’t suffer much in 2016. It’s hard to assess the Pixel’s success just yet, so the year of 2017 will show how fortunate was Google’s bet on phones.

Microsoft

Microsoft’s software division ended last year pretty much in recession. PC market didn’t grow for fifth year in a row, and Windows Phone is slowly and quietly dying. These are the most obvious reasons why the company was forced to go back on its promise to ship one billion copies of Windows 10 by 2018, within three years of the initial release.

On the hardware side, things aren’t so sad and dull. Surface Studio, a three-thousand-dollar touchscreen desktop computer, is Microsoft’s attempt to provide pros with some really powerful tools, and the updated Surface Book features the i7 processor and extended battery life. Both products are aimed to not only be seen as two very powerful and very expensive machines, but also to lead other manufacturers in the direction of Microsoft’s vision.

You might say that the $2,999 Surface Studio and the $2,399 Surface Book are niche products made for special pro needs (and special wallet sizes), and that they don’t have to sell in hundreds of millions. That might have a point.

Yet, in my opinion, by betting on pro market exclusively, Microsoft detaches itself from regular customers even further. The company lost mobile to Apple and Google. Now it is consciously saying goodbye to its chances on PC hardware market. Was it a good turn to take in 2016? I don’t think so.

Facebook

The election year in the U.S. brought a tough challenge for Facebook, which, if you asked me, it failed completely. When the website set experiments with its users’ emotions a few years ago by showing only good news to some of them and only bad news to others, it was a doubtful practice for. When Facebook ignored the fake news phenomenon, it was unforgivable.

For a media-distribution company, like the one that Facebook is, the quality of content is a key factor of success. News that are fake outright can hardly be called quality content. Despite Facebook denying its role in creation of such content, it’s the algorithms that allowed completely fake news to appear in news feed are what attracts fake publishers. It’s the algorithms that were created inside Facebook and by Facebook (what a coincidence!).

Bottom line

As you can see, many big technology companies struggled to create something truly groundbreaking in 2016. I believe this represents the state of the whole industry. Tech products are either too good (so they don’t need any improvement) or too bad (and can’t be fixed right now—like Facebook’s news feed).


Jan 16, 2017 at 9:00 AM