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13 December 2018

Faultline forecasts that vendors will carry out all forecasts in future

One of the trends at Christmas time is for people to talk a lot about lists and forecasts. The lists vary from top ten predictions for 2019, other lists are what will be trending in 2019. Ericsson today came out with a piece of fun headlined 10 hot consumer trends for 2019.

We have resisted making up our own list, as most of what we do all year is put our necks on the line and make predictions, and Christmas is such an unseemly time to add to them. It’s a bit like making a joke at the expense of Theresa May, the UK Prime Minister, when you have no idea of how Brexit will end up. It’s just bad taste. Just cough and move on, nothing to see here.

But we are going to break with tradition and publish a list, first the stories we are sick of which we could do without being dragged into in 2019, and secondly, we’d like to take a look at some “Ericssonisms” – things that Ericsson should concentrate on during 2019 and beyond – like making a profit, and not telling us what we think.

Firstly, we don’t want to read another word about Apple suing anyone. The Cupertino start up that we remember from 1976 was original and thrusting and surprising, and it has given all that up in order to sue people to protect the one design that it made which conquered the world, the iPhone. Suing its supply line, in Samsung and Qualcomm, and as a result almost pushing the highly original Qualcomm into an arranged marriage with Broadcom in the process, is a type of globalization that we can really do without. Home court decisions by Californian courts have distorted the truth and the marketplace. No more please, settle with Qualcomm now that it has China agreeing to ban some iPhones, and let’s move on.

Another story we want to hear nothing about is one of Ericsson’s first loves, virtual reality. Faultline predicted that it did not happen in the 1990s and it would not happen this time, and largely, with the exception of games (which we said would embrace it) VR has not happened even though you can now strap a phone to your head and stare vacantly into it while crossing the road and being mown down by a Chevrolet Crossover because the driver is streaming a video on their phone.

VR has a problem with creating and delivering an entire reality, and AR has a problem with “contentware” – it’s tough to make and edit, and a video that already exists on YouTube will do the job of teaching you how to cook or change the chain on your bike, or any other job that is too complex for mere words to put across. People make predictions about it because it will take quite a while before mixed reality devices – those that let you see everything as it is except one or two extra virtual artifacts – will take quite a while to come to fruition and VR and AR are so tantalizingly close no-one wants to have to re-ignite all that enthusiasm once again, after it has died a death. But this is not a subject for 2019, try 2024. Ericsson forecasts that AR and VR users want hands-on virtual guidance for tasks such as cooking or making repairs – yes they want them, but no-one can make that content economically on the current installed base, so nobody will.

This lack of a fundamental grasp of economics is why Ericsson is in such a mess. Internally, instead of a sales force it has a team of “wishful thinkers” and someone came up with two wishful thinking ideas, that Huawei and ZTE would be banned from most of the world’s lucrative cellular contracts, and that Nokia would buy Alcatel and fail to integrate it and leave all the good stuff to Ericsson. They got both of their wishes and are still not in profit and Nokia is doing rather well.

Here’s a prediction, that even 5G won’t make Ericsson profitable. And given it will take no less than 10 years for 5G to roll out, everyone will be sick of it by then, and it still won’t have a business case which Ericsson can agree with all the operators who just want faster phones that handle video properly for a tenth of the price.

Another subject we don’t want to have to cover during 2019 is that cord cutting is not affecting viewing figures on broadcast TV. The relationship is not straightforward, in that for everyone who watches a movie on their phone, or OTT on their smart TV, that’s not necessarily a cut cord. But no-one will ever get rich by broadcasting ever again, which is why the smart people occupy the streaming space, which will eventually steal ALL of the $220 billion of advertising revenue that TV currently takes. So stop raising false hope Nielsen, Barb, Mediametrie, etc… by saying that it’s ALL going to be okay. It has not been okay for a quite a while.

Ericsson, which we remind you does not make smart speakers and does not have access to successful natural language AI, forecasts that consumers expect smart speakers to take part in family arguments, just like other family members and that virtual assistants will understand our moods within three years.

The public is getting disenchanted with talking to a device which is clearly dumb and shipments will slow and the technology will need a new ramp-up of extra features, which comes from a major rethink of how the technology is built, before anything much will happen in smart speakers.

“Alexa what’s for breakfast?” is currently met, as of this morning with, “I don’t know that one?” And until it knows more than my wife, I refuse to speak to it, even when I am alone.

Bitcoin is another topic we want never to have to cover, along with the associated Blockchain. If Blockchain had a use case other than crypto currencies, then we would know about it by now. It’s an over complicated tamper proof ledger, that would be better off designed for multiple clouds, not to be processed on my PC. The world does not have any RFP’s out for new ledgers. This is a technology looking for a use case, a bit like 5G, except that’s 6 unrelated technologies looking for a use case each, which makes it worse. Actually, we suspect someone will find a use case, and we know of some promising things in advertising, but it can be done by less trendy, less CPU cycle consumptive technology.

Dr. Michael Björn, Head of Research Agenda at Ericsson Consumer & IndustryLab, and the main author of the report, asks, “Imagine a smartphone that not only knows what you do but also knows who you are. Today, artificial intelligence can understand your personality just by looking into your eyes. It’s clear that technology adopters see a future where our devices know us better than we know them.”

Come off it. Google doesn’t even know that when I put England versus Wales into the search engine, that I mean rugby and not table tennis, or the history of armed conflict between the two nations. When it says, “Oh Hi Pete, you want to know the latest score in the international, because you are obsessed with rugby, well I won’t tell you, how do you like those apples.” Then I can smash both the Android Voice assistant and vow off Google for life, but at the moment we train humans to understand the technology and we have no idea of how to approach things the other way around. If my smart speaker argued with me, I would buy another brand, which is why Ericsson does not have one and never will if Björn has anything to do with it.

Other things we hope we won’t have to cover in 2019 include Drones, wearables, data abuses by FANG, cookies that keep track of us, and globalization – but that’s mostly because they have little to do with the future of video delivery networks, which is what we do write about, a skill that remains beyond most operators and will continue to be throughout 2019.

Merry Christmas.