The top news in tech - the April digest
The debate over energy security captured the attention of the media this April, as recent events highlighted the urgent need to reduce dependency on overseas energy. In the UK, Boris Johnson finally revealed his long-awaited new Energy Security Strategy, providing a boost to the UK’s energy industry – with renewables and nuclear benefitting most.
The strategy is designed to help tackle soaring energy prices and reduce reliance on Russian oil and gas. Nuclear power forms a key part of the plan, with offshore wind, solar and hydrogen also featuring, as the government targets 95% of electricity being low carbon by 2030. Conversations around our planet and renewable energy were ignited again in April with Earth Day – the focus this year being to ‘Invest in our Planet’. This agenda, coupled with renewed pledges from the UK government to boost renewable sources of energy, means that there is not a better time for greentech companies to step on to the scene! Head to our website to learn about our experience and expertise in the greentech and cleantech sectors, and get in contact if you think we can help you.
The UK’s new Energy Security Strategy was not the only story making waves in the media, here is the other important news from April.
The anticipated rise of 5G has come to fruition as research from operator Three UK, reported in Computer Weekly, revealed that 5G handset usage quadrupled in 2021 and use of its 5G network has increased by 385% since 2020. Its report also revealed that during the first lockdown, voice calls peaked at record highs and over the course of 2020, calls averaged 16% longer in length as Brits spent more time chatting.
Three is the fourth-largest mobile network operator in the UK, with around 10% of the market. At the start of 2022, EE revealed that it would be phasing out 3G in the UK, with plans for it to be fully retired by 2023. In fact, with all networks in the UK having agreed that 3G will be switched off by 2033, EE is ahead of the game. With 5G having overtaken 3G on Three UK networks, will Three be next in phasing out 3G? Why should service operators ‘turn off’ old generations like 2G and 3G? With limited amount of spectrum to work with, removing 3G would allow mobile operators to repurpose the spectrum for 4G, 5G and the next generation – 6G (which is expected in 2030). With the rapid roll-out of 5G, it is possible that 3G will be long gone by the supposed deadline of 2033.
In other news, the ongoing semiconductor chip shortage is a story that is having major ramifications for the technology sector. In April, the White House held a classified briefing with US lawmakers on the dire risks to the American economy from semiconductor supply chain issues as it pushes Congress for $52 billion in funding to subsidise production. A persistent industry-wide shortage of chips caused by increased demand, US-China trade friction and exacerbated by COVID-19, has disrupted production in the automotive and electronics industries, forcing some firms to scale back production. There have also been growing calls to decrease reliance on other countries for semiconductors as the semiconductor market is currently dominated by Taiwan, South Korea, and the US. As of 2021, only three firms in the world are able to manufacture the most advanced semiconductors: TSMC of Taiwan, Samsung of South Korea, Intel of the United States.
In an effort to compete with the countries providing semiconductors, the US has two chip-making sites in progress; Intel in Ohio and Samsung in Texas. Both sites are to be up and running by the end of 2024 and 2025, respectively. Ohio is already seeing a growth in tech jobs in the past few years as Amazon, Google and Facebook built data centres in the region. With Intel soon to be added to these major players, Ohio could become a significant location for the technology sector.
However, until the computer chip factories begin production, consumers might still face problems. While Apple and Samsung have the money to ensure they are prioritised for computer chips, smaller companies do not. Which means customers may have to shoulder the cost that small brands pay for computer chips. In addition to this, it may be harder to find desirable gadgets. While the government attempts to mitigate the impact of the semiconductor supply issue, consumers and businesses alike can expect to continue seeing the effects of the shortage in computer chips.
In February, I highlighted how Facebook’s patents revealed their plans for the metaverse. Now in the battle for control of the ‘metaverse’ market, Sony has strengthened its dominance of console gaming by contributing to a $2bn funding round to Epic Games, makers of Fortnite. The Financial Times reported that the deal will galvanise the industry in which Microsoft is in a pitched battle with Sony for dominance of console gaming, helping to set off a wave of consolidation among games companies. The metaverse, a much-hyped and as-yet nebulous concept that tech and gaming visionaries claim will shape the way people socialise, work, and be entertained, will increase seven-fold between now and 2030, adding $1.5trn to global GDP. This potential has caught the attention of vendors who predict some users — especially younger ones — may eventually earn, spend, and invest most of their money in digital worlds.
Apple and Google are also major players in a future where people don headsets and become virtual avatars in a virtual space shared by people around the world. Client Amdocs recently conducted research into a ‘post-console’ future, one that is enabled by 5G connectivity and the metaverse. Amdocs’ findings revealed that 82% of gamers surveyed believed that metaverse gaming would become popular, although concerns around connectivity and bandwidth remained prominent. With more and more companies investing heavily into the metaverse, they must convince consumers that their 5G broadband will be able to support the metaverse’s networks demands
In other entertainment news, the rising cost of streaming services is affecting households hit by the cost-of-living crisis, reflected in Netflix’s disappointing figures from Q1. The number of households using the popular streaming service fell by 200,000 in the first three months of the year, as it faced stiff competition from rivals. In response, Netflix hinted that it will crack down on households sharing passwords as it seeks to sign up new members following a sharp fall in subscribers. Netflix was also hit after it raised prices in some countries and left Russia due to the war in Ukraine. Netflix warned shareholders another two million subscribers were likely to leave in the three months to July.
Netflix is the biggest streaming service with 220 million subscribers and an uninterrupted quarterly growth since 2011, however Netflix claims their growth was ‘obscured’ by large numbers signing up during the pandemic. For competitors like Disney+ and Amazon Prime Video, Netflix’s falling subscribers could indicate customers moving to their competitors’ services, or it could imply that people are moving away from subscription-based streaming. The rise of streaming services saw broadcast TV fall just behind streaming for the first time in 2021 in data from Nielsen and with Netflix still dominating streaming despite a fall in subscribers, ‘The Golden Age of Streaming’ is not in danger of ending yet.
Elsewhere in the US, the battle over net neutrality took another step forward as a ruling earlier this year in California to protect net neutrality was upheld by the Court of Appeals. The California rules, which ban blocking, throttling and certain anticompetitive paid prioritisation, received a 3-0 green light from a three-judge panel of the 9th US Circuit Court of Appeals in January. This means that telcos are still currently unable to prioritise certain types of traffic for premium content or offer greater bandwidth for websites that can afford to pay. But no one really believes the battle is yet over. Now the telecom industry must decide if it wants to take the issue to the US Supreme Court.
The net neutrality laws, which mandate that Internet service providers (ISPs) treat all data on the Internet the same without prioritising certain types of traffic, has been an issue of contention between network users and access providers since the 1990s. For the average customer, the current net neutrality has the potential of leading to higher costs and connection problems as networks may not be able to handle the demand. Alternatively, if net neutrality changes, and services such as Netflix have to pay for greater bandwidths, customers could be hit by rising costs for streaming. Either way, the potential ramifications could be significant on customers in the years to come. To learn more about net neutrality, read our blog here.