The year ahead in technology

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Technology innovations reached their tipping points in 2014 -- get ready for a wild ride

It’s that time of the year when we try to make sense of what transpired and prepare ourselves for what’s to come in 2015. After a full year of working with clients, meeting with tech partners, accelerating our own batch of startups and observing the industry, we’ve landed on five macro-trends that we anticipate will keep brands, startups, agencies and consumers on their feet next year.

China is eating mobile. Several 2014 milestones signaled China’s ascension onto the global stage. The Chinese economy officially became the largest in the world. Within weeks of Alibaba’s IPO, its market capitalization was bigger than U.S. mega-corporations like Walmart and P&G. Mobile phone startup Xiaomi, is now reportedly worth 13 times as much as Motorola and is the third-largest smartphone manufacturer in the world after Apple and Samsung.

Industry projections show that mobile Internet usage in China will increase to 750 million users by 2017, with over 80% of mainland China accessing the internet solely via mobile. With 527 million current smartphone owners (most of whom have never owned a desktop), advertisers will be clamoring to address such a large, engaged mobile audience. China will be a mobile-first country, and 2015 will be the first year where companies will spend more on digital advertising than on television campaigns in China.

But it’s not just mobile. Two thousand fifteen will be the year China will begin to lead in categories like eCommerce, messaging, connected home and IoT. Xiaomi recently made strategic investments in iQiyi, one of China’s largest online video platforms, iHealth Labs, Misfit Wearables, and recently launched a connected Air Purifier to break into the connected home space. Technology isn’t the only category facing disruption: consumers, marketers, and designers will likely begin to adopt Chinese UX conventions, such as those documented by Dan Grover, now at Tencent’s WeChat.

Decentralized services go mainstream. Decentralization, privacy and government control used to be topics native only to the anti-surveillance and off-the-grid communities. However, with the recent hacks targeting some of the world’s largest companies, retailers and banks, there is a growing concern over privacy and centralized government/corporate control over consumers’ text, photos, emails, voice communications and transactions.

As a result, we’re seeing a growth of "decentralized" products, services and apps that leverage technologies like mesh networking and the distributed blockchain popularized by Bitcoin rather than centralized servers to host and control data. While this trend may not have reached a groundswell, it’s percolating below the surface and poised to go mainstream in 2015. We’re seeing mesh networking startups like FireChat, Gotenna, Bleep and Pinoccio and a host of new services, like Etherium, looking to extend blockchain technology beyond crypto-currencies.

The two sides of IoT: Consumer facing and industrial. Many brands are still struggling to predict the long-term viability of consumer-facing IoT products and services. Wearable tech is evolving, but getting users to integrate wearables into their daily lives continues to be a challenge. Last year saw interesting collaborations between multiple fashion brands and technology companies, and it will be exciting to see how the Apple Watch plays out in 2015. On the consumer-electronics side, while Google, Samsung and Xiaomi snapped up connected-home startups, companies like Belkin and Whirlpool introduced products like a "smart" coffeemaker and washing machine that left many scratching their heads.

While experimentation and consolidation continue in the consumer side, we believe that industrial IoT will create some of the biggest opportunities for new products and services that drive productivity, efficiency,and competitiveness. Industrial IoT is benefiting from a convergence of trends such as smartphone penetration, open hardware, big data, cloud computing and machine learning, but with greater current scale and potential cost savings than in consumer IoT. VCs are seeing this opportunity as well, and Industrial IoT investments soared in 2014. 

We see potential for IoT applications in almost every industry. For example, Finnish company Enevo uses sensors in garbage bins to optimize collection routes and times and Conservis gives farmers a real time view into operations to maximize crop yields. CIOs and CEOs are now looking at how to leverage software and data connected to their products — to unlock new service-based revenue streams, reduce costs for their customers or simply to avoid disruption by software-led enterprises.

Mobile: No longer the sidekick. The mobile tipping point is here. In October 2014, 52% of all online activities happened on mobile apps. 2015 will be the year when brand connections become much more sophisticated. The days of building native apps as promotional marketing tactics or simply redesigning content for mobile screens are gone.  Two thousand fifteen will be about leveraging the fundamental differences in mobile interactivity to transform businesses. We’ll see mobile become the primary access point to control and navigate ecosystems of connected products across home, auto, activity trackers and security systems.

There are also opportunities to optimize commerce throughout the mobile purchase cycle, driving retail traffic (and sales) through targeted, personalized experiences using in-store beacons, loyalty programs, and mobile wallets.

Smarter brands make happier customers. Two thousand fifteen will see brands fulfill the promise of smart targeting. The convergence of trends described above means brands will introduce the benefits of new technologies to broader customer touch points. Customers will seek out the brands that apply data-driven intelligence to meet their needs across every interaction, whether in an app, at home, using a product, shopping online or in-store. 

We’ll continue to see large investments into customer profile management systems that bridge the online and offline worlds, real-time content studios, and targeted and personalized email services. Technology platform providers like Sitecore and Rich Relevance combined with custom-tailored software will lay the foundation for deeper long-term relationships between brands and customers.

We are looking forward to a year of major shifts in technology. Things will be changing fast, and those changes will be far-reaching. For those who are ready to embrace the changes, it will be a great time for the industry. 

Richard Ting is EVP, global chief experience officer, and Nick Coronges is global chief technology officer for R/GA.

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