Sunday, April 16, 2017

Smartphone sales predicted to slide on AI advances


The rise of advanced technology is likely to depress sales of smartphones in mature markets by 20 per cent within the next 10 years, as the loss of skilled jobs to artificial intelligence means consumers have less money to spend on the latest gadgets. The forecast from CCS Insight, the research company whose annual predictions are keenly watched by the telecoms and technology industries, sees smartphone sales falling by 20 per cent by 2025, as artificial intelligence cuts into disposable income. Ben Wood, principal analyst with CCS, said many skilled jobs were already under threat from AI, with banking, journalism, customer service, legal services and real estate the type of professions that would be transformed over the coming decade. The trend is likely to dent the income and wealth of the middle classes, as skilled occupation opportunities dry up and have a knock-on effect on the sales of expensive consumer electronics, as well as services such as pay-TV and music streaming. “It is an overwhelming pressure across the board,” said Mr Wood, who argued that artificial intelligence is already creeping into all facets of life without people realising it. He cited the example of customer service ‘bots’ that can switch between software and a human agent, without the consumer being aware. CCS Insight predicts that smartphone sales in developed markets, covering western Europe, North America and Asia-Pacific countries, including Japan and Australia, will fall to 350m units by 2025 from 440m in 2015, as a result of the rise of artificial intelligence. Other predictions include 1m pairs of “smart shoes” being sold in 2018, rising to 5m pairs by 2020, as sensors start to make their way into apparel. CCS also predicts television broadcasters in mature markets will have dropped linear programming — traditional live programming — by 2025, as the distinction between live, on-demand and recorded content blurs. On the device front, CCS predicts that an Indian brand will emerge as a top-10 player by 2018. That could be Micromax or a new player that can capitalise on the Indian government’s push to strengthen its local technology industry. Another forecast is that the Nokia brand will return to the smartphone market in force, grabbing a 5 per cent share by 2019. Nokia has licensed its brand to a new company in Finland called HMD, which will build handsets using the Android operating system. Mr Wood said that the Nokia brand still has “considerable legs” and expects the relaunched models to command twice the sales that Lumia phones managed in 2014, the height of Nokia’s previous tie-up with Microsoft. The CCS Insight report is also famous for providing forecasts at consolidation moves. This time, it predicted that CK Hutchison, the owner of the Three mobile network, would form a partnership with Liberty Global in 2017 and 2018 to combine product sets in the UK, Austria and Ireland. It also predicted that apps would continue to be hoovered up by the large platforms, forecasting that Musical.ly, the lip-syncing and dance video company with more than 70m registered users, would fall into the hands of Facebook, while Citymapper, the UK transport app, would be bought by one of Apple, Google or Here, the old Nokia maps business now owned by a consortium of carmakers.

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