10 Jan 2017 17:31 IST

Technological advances threaten existing companies too

Wireless noise-canceling earbuds from Sony are displayed at the 2017 CES in Las Vegas. (Reuters)   -  REUTERS

Change is the only constant in the technology industry, and not everyone is able to keep up

A few weeks ago, I wrote about how rapid advances in technology mean fewer jobs for everyone. This is because new technology aims to eliminate jobs that are repetitive, manual and do not require as much skill.

As the curtains came down on the Consumer Electronics Show on this Sunday (January 8) in Las Vegas, the world’s most popular exhibition where technology companies show off what will likely be cool in the coming years, there were no clear winners that stole people’s hearts and minds. There was a dash of the usual — companies displaying drones and robotic personal assistants, and car manufacturers, such as Toyota, that showed off its latest concept, and Chrysler, proudly exhibiting its electric concept (to compete with Tesla).

Changing times

But, the real action, showcasing winners and losers, has been playing out in the field for weeks — in online malls and department stores — as consumers picked up gadget after gadget at rock bottom prices to celebrate the traditional Christmas shopping season. Glossy advertisements from retailers revealed that age-old business models for hundreds of companies have turned topsy-turvy because technological advances in computing, networking and mobile have forced such change.

Until a few years ago, if you bought a laser printer, a store might have given you an extra cartridge as promotion. This season, a big office supply chain was promoting a deal which had it all backwards — if you bought three laser print cartridges, the store would give away a laser printer for free. The big printer manufacturers have always relied on cartridge sales to bring in revenue, but with people not printing much these days, the life expectancy of the average printer has been dramatically extended. The promotion made sense to many people: replace your old clunker with a new printer which may have new features such as push button WPS WiFi printing.

Magellan case

One of the biggest victims of advances in mobile computing is Magellan, the big company that first innovated in GPS-based maps. Magellan made a name for itself by selling dedicated GPS hardware, software, and maps to assist drivers worldwide with turn by turn directions. The company’s business model was like that of the printer manufacturers: give away the GPS device and perhaps a basic version of local maps at cost, but force customers to buy maps for regions outside of their home, or upgrade local versions every two to three years because the maps may become obsolete.

Today, anyone with a smartphone and a cellular signal can download Waze or Google Maps for free. These apps are so powerful that map updates are made live by thousands of users around the world reporting the latest traffic conditions. There is simply no way that Magellan can compete with such an offering, so the company meekly surrendered this entire holiday season by selling its GPS devices with a free lifetime subscription to its popular maps.

Era of the smartphone

Similarly, what happens now to traditional camera companies? The prognosis is not good for those that make basic point and shoot digital cameras because one can buy a smartphone for the same price and do everything that the camera can do; and sometimes, so much more.

One would be hard pressed to find basic digital cameras advertised this season. It looks they are going the way of the older film-based cameras. To be sure, high-end digital SLR cameras are still popular and will stay so until smartphone camera technology advances sufficiently to erase the quality advantage that the former have.

Another casualty this season was the wired microphone stereo headset industry, a staple sector for years, to meet the desire of consumers to use their phones in hands-free mode. This was a direct result of Apple driving market trends when it announced its revolutionary iPhone 7, which does not sport the familiar 3.5 mm audio headset jack — a move that eliminated traditional wired headsets altogether in favour of Bluetooth-enabled Airpods (the Apple headsets alone retail at more than the cost of many Android smartphone models).

The wireless headset industry responded by flooding the market with so much supply that prices sometimes shrunk to levels lower than for traditional wired headsets.

Full circle

Because cable and satellite TV subscription fees are still relatively affordable in India — about $10 a month compared to $100-odd a month in the US for an equivalent number and variety of channels — the latest innovation in the west is the business of indoor HDTV antennas. People’s viewing habits are rapidly moving to consuming video content on demand — mostly for free on YouTube and other social media networks. To gain access to live network TV programs, customers are installing $35 indoor HDTV antennas, most of which are so small and elegant that they can be stuck to a wall behind the TV and still receive excellent reception.

The quality is so good that customers need not regret “cutting the cord” from their cable TV companies. It seems as though technology has come full circle — from large roof installed TV antennas to cable TV to satellite dishes and now back to indoor HDTV antennas.

This has created a lot of headaches for the big cable companies as they merge to save costs and hold on to whatever customers they can. Charter Communications recently bought Time Warner Cable (the new company is called Spectrum). This was after the bid of Comcast (America’s largest cable company) to combine with Time Warner Cable fell apart amid stiff antitrust opposition from Washington.

There are so many more examples that one can almost devise a parlour game devoted to the topic. Inexpensive and easy-to-use cloud storage companies are placing a lot of pressure on portable USB hard drive makers; smartphones are rendering makers of HD video camcorders obsolete.

In general, clichés are boring, but this one applies yet again: the only constant in the technology industry is change. And this change is unsettling many well-established industries. Not a pretty picture if you work in one of these sectors.