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Trends in Consumer Digital Technology for 2019

For the past few years I’ve got into the habit of starting the new year with an article consolidating my thoughts on where we’re at with consumer digital technology; looking at the landscape, and at what the biggest players are doing—my focus is mostly on Amazon, Apple, Facebook, and Google, but it’s not exclusively on them. I want to tease out a few trends to help orient myself in my role for the year ahead. I try not to make predictions, but perhaps play out some possibilities.

There are two big declines at the core of this year’s trends, which I think set the tone for where consumer tech might head in 2019. They are the smartphone decline, and the Facebook decline.

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How farmers in Myanmar shape the future of the web

The Atlantic published The Facebook-Loving Farmers of Myanmar this week. It’s a fantastically interesting write-up by Craig Mod of ethnographic research he undertook in the Southeast-Asian country. What makes that market so particularly interesting is that Myanmar’s network was until recently artificially capped and controlled by the ruling military junta, but a vast number of people have suddenly come online as the price of a SIM card plummeted:

Mobile SIM cards in Myanmar have historically been prohibitively expensive. In 2014, the cost of a SIM card dropped from about $2,000 USD to $200 USD and then once again, to $1.50 USD.

In a country of 53 million people, only 12% had access to cell networks in 2014. By this year, the government’s plan is to have 74% online. That’s a huge influx of users, and largely in rural areas. The phones of this new wave of networked farming users are commonly imported from Chinese manufacturers, often bought second-hand. The biggest impediment to using the internet is the cost of data:

They feel each megabyte. For about 10 U.S. cents you can purchase 25MB of data. If you buy in bulk (although almost nobody does) you can get 2GB of data for 11,900 Myanmar Kyat or about $9.20 USD. Most farmers grab dataon their scratch cards in 1,000 or 3,000 or 5,000 Kyat chunks. How long it lasts depends on the user. For some 3,000 Kyats gets them through the month. For others, it lasts only a few days.

What the research discovers is that everyone is on Facebook—and often nothing else, except perhaps a messaging app. The reason has little to do with the social graph, and more with that data restriction:

Facebook has a compelling advantage over other news apps or even Twitter: The content of many posts and news items live inside Facebook itself. There are external links, but most of the article summaries and photos are self contained. As Facebook continues to ramp up their Instant Articles—special versions of web articles that are leaner, load more quickly, and are Facebook optimized—the amount of content that lives in Facebook will only increase. For those who are data sensitive, this is a clear virtue.

I wrote recently about Twitter’s planned move to allow 10,000 characters in tweets, quoting Will Oremus’s article Twitter Isn’t Raising the Character Limit. It’s Becoming a Walled Garden. and its contention that:

If I’m right about what’s really going on here, this move will not fundamentally alter how Twitter looks or feels, nor how people use it. Rather, it will change where online content is hosted, who controls it, and who is in a position to monetize it.

I’m not naïve enough to think there’s definitely not an element of control involved, but my original response was “it’s probably more complicated than that”, and I still think that way. To me this is not necessarily about monetising—not yet, at least—but more about being relevant. Twitter are taking a look at the emerging market and seeing themselves with no place in it. Right now, it’s not even a competition.

The other company that stands to lose big from this is Google—the open web powers pretty much everything it does, so losing out to Facebook on the next billion online users would be devastating to its business. Hence they’re pushing Accelerated Mobile Pages (AMP), a strict and optimised subset of HTML aimed at publishing stories without legacy advertising and tracking cruft. AMP is set to launch next month, with Twitter on board as a partner.

Why employ a strict subset of HTML rather than getting publishers to clean up their acts and produce better-optimised pages? Time. Although performance is a hot topic in web development circles, web pages continue to get heavier. It will take more time to correct that, and the rapid growth of markets like Myanmar shows that time is an ill-afforded luxury.

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Data use and privacy in Web services

Tim Cook recently made a speech attacking Silicon Valley companies (e.g. Google and Facebook) for making money by selling their users’ privacy. The problem with what he said is that, first of all, it’s fundamentally incorrect. As Ben Thompson points out (subscription required):

It’s simply not true to say that Google or Facebook are selling off your data. Google and Facebook do know a lot about individuals, but advertisers don’t know anything — that’s why Google and Facebook can charge a premium! [They] are highly motivated to protect user data – their competitive advantage in advertising is that they have data on customers that no one else has.

Cennydd Bowles also argues the same point:

The “you are the product” thing is pure sloganeering. It sounds convincing on first principles but doesn’t hold up to analysis. It’s essentially saying all two-sided platforms are immoral, which is daft.

The @StartupLJackson Twitter account puts this more plainly:

People who argue free-to-customer data companies (FB/Goog/etc) are selling data & hurting consumers are the anti-vaxxers of our industry.

I’ve always maintained that this is about a value exchange – you can use my data, as long as I get control and transparency over who sees it, and a useful service in return. But beyond that, another problem with making premium services where you pay for privacy is that you make a two-tier system. Cennydd again:

The supposition that only a consumer-funded model is ethically sound is itself political and exclusionary (of the poor, children, etc).

And Kate Crawford:

Two-tier social media: the rich pay to opt out of Facebook ads, the poor get targeted endlessly. Privacy becomes a luxury good.

Aside: Of course this suits Apple, as if wealthier clients can afford to opt out of advertising, then advertising itself becomes less valuable – as do, in turn, Google and Facebook.

The fact that people are willing to enter into a data exchange which benefits them when they get good services in return highlights the second problem with Tim Cook’s attack: Apple are currently failing to provide good services. As Thomas Ricker says in his snappily-titled Tim Cook brings a knife to a cloud fight:

Fact is, Apple is behind on web services. Arguably, Google Maps is better than Apple Maps, Gmail is better than Apple Mail, Google Drive is better than iCloud, Google Docs is better than iWork, and Google Photos can “surprise and delight” better than Apple Photos.

And even staunch Apple defender Jon Gruber agreed:

Apple needs to provide best-of-breed services and privacy, not second-best-but-more-private services. Many people will and do choose convenience and reliability over privacy. Apple’s superior position on privacy needs to be the icing on the cake, not their primary selling point.

As this piece by Jay Yarow for Business Insider points out, in the age of machine learning, more data makes better services. Facebook and Google are ahead in services because they make products that understand their users better than Apple do.