50% of the UK motor insurance market could involve policies informed by telematics within five years
Source: Allianz Insurance
As more things – cars, fridges, tools, electricity pylons – start to talk to each other, machine-to-machine (M2M) communication offers companies the opportunity to make their processes more efficient. It also raises the possibility of creating entirely new industries from the data generated by these conversations.
In the utilities sector, smart grids and smart meters will deliver power with less waste, while the logistics industry is being transformed by the ability to track just about everything.
Richard Sedgwick, a director and telecom consultant at Deloitte, says: “Only about 3 per cent of the machines that can talk to each other actually do so – the potential for growth in this area is enormous. The technology exists to allow machines to talk to each other, but the value comes when you understand how to use that information.”
One industry that is hoping to extract value from M2M communications is insurance. Black-box devices can be fitted to a customer’s car, for example, to monitor their driving behaviour with safe drivers given a premium discount.
Telematics, as this is called, accounted for just 1 or 2 per cent of the policies written in the UK this year, but experts believe that could more than double in 2014. Allianz Insurance has estimated that it could be as much as 50 per cent of the market within five years.
Given the amount of data that will be generated, the potential spin-off uses could be enormous. As the UK is at the vanguard of introducing telematics in Europe, this should give British tech companies a significant first-mover advantage.
127% increase in spending on mobile advertising, up to £429 million, in the first half of 2013
Source: Interactive Advertising Bureau
Imagine a world where you walk past a shop and it recognises you from your mobile phone signal and sends a text message offering an instant discount coupon or advertising message. The marketing industry has been dreaming of this future for years, but it could remain a dream because, in the real world, this type of advertising could be an invasion of privacy.
Greg Jackson, a London-based “angel” investor in the technology sector, says: “People really don’t like getting spam messages on their phones. For mobile marketing to work you need a relationship with the person receiving the message and a very good reason to message them.”
The most successful companies in this sector are those that concentrate on the mobility part of mobile marketing, he adds.
A company to watch in 2014 is Last Second Tickets, which offers unsold tickets for music events and other performances. By registering with Last Second, a mobile user can immediately check whether discounted tickets are available when they are close to a theatre or venue.
Groupon, Foursquare and Google are also increasingly using location services to better target their marketing messages or discount coupons, and this trend is likely to continue. The big advance in 2014 may be background location monitors that would allow mobile users to automatically receive offers when they are near a shop or restaurant they had previously expressed an interest in. These apps are currently battery intensive and can be intrusive unless hyper-relevant, but as they become more efficient, expect to see them offered by more and more companies.
40% of respondents said they would be definitely or somewhat interested in owning a smartwatch
Source: Ask Your Target Market
Google Glass and the Samsung Galaxy Gear smartwatch have made wearable technology one of the most talked-about sectors in the gadget industry. Unfortunately, smartwatches and internet-enabled glasses are still nascent technologies, and could be some time away from becoming mass-market products.
Instead, it will be at the more utilitarian end of the market where wearable technology will take off in 2014 – clothing.
Earlier pioneers of clothing-based tech include CuteCircuit, a London-based fashion designer that uses LED lights to create patterns in dresses, and the Morph Costume Co, which uses digital designs downloaded from an app to create images on clothing.
These products may be too niche to reach the high street, so it is to sportswear that we should look to unlock this market. Clothing that can monitor heart rate, calories burnt and distance travelled, and then relay that information back to a smartphone, is starting to become available and has attracted the attention of big brands.
Under Armour dipped its toe in the market this year and is expected to launch a new range of wearable technologies in 2014. Nike, meanwhile, has set up a tech incubator, called the Nike Fuel Lab, to develop more uses for its FuelBand bracelet device.
Apple also appears to be on the verge of getting into this sector having hired Jay Blahnik, the developer of Nike’s FuelBand, and Paul Devene from Yves Saint Laurent. Apple’s much anticipated iWatch may not be a smartphone after all, but rather a device that links to sportswear.
41% of Facebook’s advertising revenue comes from mobile
There is a battle brewing for control of social communications in the mobile world. Do users want to stay within a holistic universe, like Facebook’s, or do they want to use multiple applications to send messages, share music and express views on the restaurant they just visited?
There have been some early skirmishes in this battle, but it will become increasingly important in 2014 as apps like Vine, Snapshot, WhatsApp? and WeChat reach a scale that encourages more and more people to join, so they can stay part of the conversation.
Most of these services are relatively simple. For example, WhatsApp? is an instant messaging service that is free for the first year and then just 99 cents a year after. It allows people to talk to friends anywhere in the world and share almost any form of media with them.
Meanwhile, the “what I did today” noticeboard features on networks such as Facebook appear to be losing popularity, and are shifting to specific sites like Pinterest and Tumblr.
Google recognised the attraction of the unbundled social apps earlier this year when it moved Google+’s instant messaging function into a dedicated service called Hangouts.
Facebook is also investing in messaging and picture features – it bought Instagram last year for $1 billion – but its attempt to integrate these into a single point of entry for users has not been met with great reviews, and the company could face an even tougher challenge in 2014.