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Predictions 2016: how did I do?

Reading Time: 3 minutes

Here are the predictions made at the top of the year

I expect Uber will continue to funnel money into China and still get sand in its face. Quite what this means for Lyft I am not so sure.

Uber raised more money, realised that things still weren’t improving and then got a face saving exit from the Chinese market. I’ll call that a win.

Twitter gets a change of management, but that doesn’t do any good… All of this would be bad news for potential advertisers and their intermediaries in the advertising and PR world.

God, where do we start with Twitter. It has had extensive management churn and a big staff lay-off. I don’t think that my own view about a change of management is correct though. I envisaged this as a strategic proactive more by the board rather than the current rotating door. I have been impressed by how well Twitter advertising has held up. Twitter might look like the Yahoo! of social media, but it still holds a lot of weight with the mainstream media which still counts for something.

Fintech bubble that will take good ideas and bad ones down together. Banks are currently considered to be ripe for disruption. One of the key problems with this is that technologists think it will be easy to sweep aside regulations that banks operate under.

This one is still percolating out. Banks are looking particularly at Blockchain as the basis of a better transaction ledger/database. Informally, I have heard that VC funding has largely dried up on fintech start-ups; but the other shoe has yet to drop.  Zopa applying for a bank licence and becoming a bank felt like a watershed moment.

The internet in the EU will become increasingly regulated. At the moment the European Union is succumbing to The Fear. 

The fear has grown beyond terrorism to being overrun by immigrants (some of whom will be terrorists). The UK is well on its way to putting into law some of the most draconian web laws in the western world from porn filtering to sharing citizen web history access with a wide range of government agencies.

Overall this has made less progress than I expected because Brexit became the existential challenge that the EU members will seek to vanquish.

We will have reached peak smartphone and tablet. China has now reached replacement rate for devices, there is a corresponding lack of paradigm shifts in the pipelines for smartphone design and software. Tablets have shown themselves to be nice devices for data consumption but not requiring regular upgrades like the smartphone or replacement for the PC.

We’ve certainly reached peak tablet. Smartphones are taking a longer while to shake out. What we are seeing is declining margins in smartphones. Apple increased its industry share of profits to 90% despite:

  • Making a weak update to the iPhone 6S
  • Having a declining market share
  • Having a higher cost in terms of bill of materials

There were some one-off factors such as the Samsung Note 7 recall and the collapse of Hanjin Shipping which curtailed the supply of some handsets.

VR in 2016 will be all about finding the right content. VR won’t work in gaming unless it provides e-gaming athletes with some sort of competitive advantage, if it does then gaming will blow things up massively. Gaming will not be the only content vehicle for VR, it needs an Avatar-like moment to drive adoption into the early mainstream.

There were two things that surprised me about VR in 2016.

  • It look Sony so long to get VR on to the PlayStation, it will be a while for us to see the impact of gaming on the use of VR. It certainly provides immersive experiences, but does it provide e-athletes with competitive advantage?
  • China blew the amount of VR headsets available out of the water, but there has been a corresponding dearth of content. The stuff on YouTube is nice demo-ware, but where is the ‘Breaking Bad’ of VR

One thing that people aren’t talking about is the role of VR googles as a replacement for a large TV set. I have heard that some of the most used apps for VR is Netflix.

Older predictions
2016: just where is it all going? | renaissance chambara
2015: crystal ball gazing, how did I do? | renaissance chambara
2015: just where is it all going? | renaissance chambara
2014: crystal ball gazing, how did I do?
2014: just where is it all going? | renaissance chambara 
Crystal ball-gazing: 2013 how did I do?
2013: just where is it all going?
Crystal ball-gazing: 2012 how did I do?
2012: just where is digital going?
Crystal ball-gazing: 2011 how did I do?
2010: How did I do?
2010: just where is digital going?

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Links of the day | 在网上找到

Reading Time: 3 minutes

Hanjin Shipping collapse may be the beginning of the end for profitable global trade | South China Morning Post – As capacity growth has continued at around 6 per cent a year, with the global container fleet four times larger today than it was in 2000, so it is estimated that we today have a 30 per cent surplus capacity on the world’s main shipping routes. The combination of extra capacity and stagnant cargo growth has led to a ruthless price war that has meant wonderfully cheap freight rates for exporters, but has stripped the shipping lines of all profit.

The GeoCities Cage at Exodus Communications – amazing pictures – the cloud today wouldn’t look that different

疯狂希莉娅-电影-腾讯视频 (Mad Shelia) – a Chinese homage to Mad Max Thunder Road. Awkward product placements for apps and the fact that Thunder Road wasn’t allowed in China make this low budget work more divisive. Admittedly critics ignore the efforts by the likes of The Asylum in the US who are famous for their mock buster films

Infineon places its bets on compound semiconductors, lidar, radar | Electronics EETimes – interesting that LIDAR is right up there

Ctrip to buy UK’s Skyscanner for US$1.74b | Shanghai Daily – big move for Ctrip

WSJ City – UK Faces Lost Decade of Real Wage Growth – “One cannot stress enough how dreadful that is. We have certainly not seen a period remotely like it in the last 70 years.”

Autumn Statement shows cost of casual work ‘gig economy’ – BBC News – The UK’s “gig economy”, powered by self-employment and casual work, is starting to hit government revenues. Wednesday’s Autumn Statement for the first time showed how it is cutting into the government tax take. The Office for Budget Responsibility (OBR) estimates that in 2020/21 it will cost the Treasury £3.5bn. Wild West Workplace – self employment in Britain’s gig economy by Frank Field and Andrew Forsey – (PDF) the case study on couriers is particularly insightful and gives you an idea of how screwed it all is

China first to record 1m patent filings in a year | FT – interesting debate over what this means. Is it really innovation or driven by state targets. In some areas such as telecommunications there is a definite patent land grab and research being done for competitive advantage

Mainland money distorting Hong Kong land prices, tycoon warns | FT.com – I would have said that has been the case since the handover, its also distorting land prices and property prices

DPC steps up Yahoo! hack investigation | RTE – bad news for Yahoo! from an EU perspective

China’s airports to ‘scrap boarding pass on domestic flights as early as next year’ | South China Morning Post – interesting, I wonder how this will affect foreigners on domestic flights?

Strategy Analytics: Apple Captures Record 91 Percent Share of Global Smartphone Profits in Q3 2016 – which gives you an idea of how thin the margins are. BBK – owners of Vivo and OPPO are killing Huawei by comparison. This implies that Huawei’s premium range isn’t doing as well as its budget Honor range when one takes into account the cost of preparing for production (tooling etc) as well as bill of materials

IBM new server produced by Wistron, adopted by Tencent | DigiTimes – interesting that it looks so different to servers from the likes of Facebook or Google and much more like an enterprise data centre

Apple Takes Record Profit Share with iPhone in Q3, Says Strategy Analytics – Tech Trader Daily – which shows how commoditised the smartphone market has become, especially when you think that Apple itself has declining margins on the iPhone 7

Telegram launches Telegraph, a long-form publishing platform | VentureBeat – new paste bin type blogging platform, though many have considered it as a challenge to Medium / new blogging platform

Apple dumps wireless router development, will exit the market – ExtremeTech – this is a shame as I have found Apple Routers exceptionally easy to set up and very reliable. Apple is being ruined by the tyranny of large numbers and design obsessions in many of the wrong places

Forbes: How Jared Kushner Won Trump The White House – it is interesting how the Democrats ‘unlearned’ lessons of the Obama campaign

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The internet of hacking or WTF is happening with my smart home?

Reading Time: 4 minutes

IoT should be considered the Internet of Hacking (IoH).

Mirai – is a bot network that is powered by a range of devices including infected home routers and remote camera systems. It took over these systems by using their default passwords. The network of compromised machines is then targeted to overload a target network or service. Last week the Dyn DNS service was targeted which restricted access to lots of other services for users on the east coast of the US.

DNS is like a telephone directory of internet destinations, if no one knows where to go it becomes a lot harder to get in touch.

DDoSing
Mirai didn’t spring miraculously out of thin air. It finds its history in passionate gamers who used distributed denial of service (DDoS) attacks to slow down or even kick opponents off online gaming platforms. Eventually the gaming companies got hip to it and went after the cheaters, not to be outdone the cheaters went after the gaming companies.

Taking a service offline using DDoS became a source of extortion against online banking and e-commerce services. Attacks can be used as a form of ‘digital hit’ to take out opponents or critics like online security commentator Brian Krebs.

Computing
Moore’s Law meant that computing power has become so small and plentiful that it is surprising what we often have in the palms of our hands. The first Cisco router was built on the circuit board of a Sun Microsystems workstation. Home routers now are basically small computers running Linux. A CCTV camera box or a DVR are both basic PCs complete with hard drives.

Back in 2007, BlackBerry co-founder Mike Lazaridis described the iPhone as

“They’ve put a Mac in this thing…”

The implication being that the power of a sophisticated PC was essentially in the palm of one’s hand. The downside of this is that your thermostat is dependent on a good broadband connection and Google based cloud services and your television can get malware in a similar manner to your PC.

Security
For a range of Chinese products that have been acknowledged as part of the botnet; the manufacturer acknowledged that they were secured with a default admin password. They fixed the problem in a later version of the firmware on the device. Resetting the default password is now part of the original device set-up the first time you use it.

The current best advice for internet of things security is protecting the network with a firewall at the edge. The reality is that most home networks have a firewall on the connected PCs if you were lucky. The average consumer doesn’t have a dedicated security appliance on the edge of the home network.

Modern enterprises no longer rely on only security at the edge, they have a ‘depth in defence’ approach that takes a layered approach to security.

That would be a range of technology including:

  • At least one firewall at the edge
  • Intrusion detection software as part of a network management suite
  • A firewall on each device
  • Profile based permissions across the system (if you work in HR, you have access to the HR systems, but not customer records
  • Decoy honey post systems
  • All file systems encrypted by default so if data is stolen it still can’t be read

Processes:

  • Updating software as soon as it becomes available
  • Hard passwords
  • Two-factor authentication

Depth in defence is complex in nature, which makes it hard to pull off for the average family. IoT products are usually made to a price point. These are products as appliances, so it is hard for manufacturers to have a security eco-system. The likelihood of anti-virus and firewall software for light bulbs or thermostats is probably small to non-existent.

The Shenzhen eco-system
Shenzhen, just across the border from Hong Kong has been the centre of assembly for consumer electronics over the past 20 years. Although this is changing, for instance Apple devices are now assembled across China. Shenzhen has expanded into design, development and engineering. A key part of this process has been a unique open source development process. Specifications and designs are shared informally under legally ambiguous conditions – this shares development costs across manufacturers and allows for iterative improvements.

There is a thriving maker community that allows for blurring between hobbyists and engineers. A hobbyists passion can quickly become a prototype and then into production . Shenzhen manufacturers can go to market so fast that they harvest ideas from Kickstarter and can have them in market before the idea has been funded on the crowdsourcing platform.

All of these factors would seem to favour the ability to get good security technologies engineered directly into the products by sharing the load.

China
The European Union were reported to be looking at regulating security into the IoT eco-system, but in the past regulation hasn’t improved the security of related products such as DSL routers. Regulation is only likely to be effective if it is driven out of China. China does have a strong incentive to do this.

The government has a strong design to increase the value of Chinese manufacturing beyond low value assembly and have local products seen as being high quality. President Xi has expressed frustration that the way Chinese manufacturing appears to be sophisticated, yet cannot make a good ballpoint pen.

Insecurity in IoT products is rather like that pain point of poor quality pens. It is a win-win for both customers, the Chinese manufacturing sector and by extension the Party.

More Information
WSJ City – Massive Internet Attack Stemmed From Game Tactics
Your brilliant Kickstarter idea could be on sale in China before you’ve even finished funding it | Quartz
Asus lawsuit puts entire industry on notice over shoddy router security | Ars Technica
Europe to Push New Security Rules Amid IoT Mess — Krebs on Security
Why can’t China make a good ballpoint pen? | Marketplace.org