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2018: The Year of Tech Disillusionment

Concannon Business ConsultingAutonomous Vehicles 2018: The Year of Tech Disillusionment

2018: The Year of Tech Disillusionment

Even though many new technologies have been making consistent progress over the last few years, 2018 was somewhat unique in that the hype cycle pushed expectations into the stratosphere, where they promptly crashed back to earth with surprising speed.  From autonomous cars to cryptocurrency, public failures and disillusionment reigned supreme in the last year. However, in many ways this was actually a good thing since the true long-term innovations offered by emerging technologies often happen behind the scenes after the hype has died and the real work begins.  Here’s a quick rundown of what happened in several key areas in 2018 and where we go next.

Virtual Reality & Augmented Reality

Whichever letter you choose to put before “Reality”, 2018 was a year of disappointment.  On the virtual reality side, technical development seemed to stall in 2018. The only new advancement came in the form of the well-intentioned, but underwhelming Oculus Go, while minor improvements from HTC and a few less than stellar new headsets from Lenovo and Samsung rounded out the hardware of note.  At the same time, VR adoption in the consumer market is lagging behind many companies’ expectations even in gaming, with companies like CCP Games saw uptake at half the level they anticipated.

 

On the “other R” side, the trend toward splitting the market with more terms like “Mixed Reality”, “Extended Reality”, “Immersive Computing”, etc. didn’t hide the fact that in the consumer market, augmented reality and its related spinoffs largely failed to deliver on hype expectations.  The most notable letdown was the unveiling of Magic Leap’s debut device, which in its initial incarnation looks and acts like a slightly better version of Microsoft’s HoloLens. However, the market itself seemed to suffer more deeply with a slew of virtual/augmented reality companies like Blippar, Jaunt, and Starbreeze shifting focus, downsizing, or folding entirely despite millions of dollars in investment.  

 

What’s next: There are three key takeaways from 2018.  

 

First, virtual reality uptake is going to be a slow road rather than a rocketship.  Even with the lack of compelling new devices, game developers are still publishing a slew of VR titles with dedicated fanbases and many gamers have at least tried VR by now.  On the consumer side, expect the next two years to see continued slow headset improvements and additional adoption.

 

Second, augmented reality hardware simply isn’t “there” yet.  Phone-based AR is a stopgap solution for most use cases until the underlying hardware technology advances to the point where people aren’t expected to walk around in public with clunky headsets and fanny packs to see interesting things.  Don’t expect AR to be a true consumer market for the next several years.

 

Third, even though the consumer market for V/M/A/E/X Reality was underwhelming in 2018, we did start to see some significant interest in the business world where the tech is being used for far more than entertainment.  Walmart and Farmers Insurance are now using VR for employee training, while oil & gas companies are using specialized AR headsets for field operations. Expect to see more novel developments in this category in 2019.

Autonomous Vehicles

The most notable event for autonomous vehicles in 2018 was Uber’s autonomous test vehicle fatally hitting a jaywalking pedestrian in Arizona.  Once it was revealed that Uber’s engineers had disabled many driving safety systems due to the large number of false positives they were creating, the state of autonomous vehicle development became abundantly clear.  This was compounded by another fatal accident involving a Tesla vehicle operating on autopilot driving itself into a highway divider and some quiet revisions of testing timelines by large OEMs. The net result was a slew of new state-level regulations and an adjustment of public expectations and concerns.  

 

What’s Next: 2019 will be a year of slow progress, not a giant leap forward.

 

Even with these setbacks, Waymo is still the clear leader in autonomous vehicle development and is continuing to roll out autonomous “beta test” vehicles in select markets, with slow expansion plans throughout 2019.  The key takeaway from the last year is that autonomous vehicle expectations need to be tempered by the constraints of real world driving complexity and a murky legal and regulatory environment. Autonomous vehicles will slowly add more locations, conditions, and situations that they can handle, but we are still years away from a safe and reliable autonomous vehicle in dealer showrooms.

Blockchain & Cryptocurrency

2018 saw the crash of cryptocurrencies that many people had been predicting for years, with bitcoin losing over 75% of its value from its speculator-driven highs.  Other popular cryptocurrencies like Ethereum lost similar amounts as the bubble burst and the lack of clear underlying value in these digital assets became clear. Along with the decline of cryptocurrencies, the widespread interest in using blockchain for everything imaginable quickly died down as well, indicating that a significant portion of this interest was driven by hype rather than by true business needs.  Combined with notable hacks and successful attacks on smaller coins as well as some alt-coin founders simply taking their money and disappearing, 2018 ended on a strong note of disillusionment for cryptocurrency and blockchain in general.

 

What’s Next: From the perspective of many blockchain developers, now the real work can begin.

 

Blockchain as a technology still holds a lot of promise for specific applications where it makes sense.  Financial transactions, supply chain systems, and smart contracts can still benefit from trustless distributed ledger system just as much as before.  And now that speculators who just wanted to get rich quick have moved on to other venues, the developers and adopters who believe in the technology itself are hard at work building real, long-term solutions.  In many ways, blockchain is likely to be similar to bittorrent as it moves behind the scenes and becomes a valuable back-end technology for specific applications. Expect to see more quiet development on various protocols in 2019, including moves away from proof-of-work algorithms.  However, on cryptocurrency the jury is still out on where the bottom is.

Drones

The culmination of 2018’s experience with drones was the highly public and somewhat ridiculous shutdown of London’s Gatwick airport due to illegal drone flybys.  The incident highlighted the potential for malicious action by anyone with a few hundred dollars to spend on a drone, as well as the need for more effective ways to control (and sometimes disable) them.  At the same time, 2018 saw an explosion of parks and public areas across the world implement done bans as well as increased regulations (including from the FAA) regarding where, when, and by whom drones can be flown.  The upshot of all this was increased public frustration with drones and drone operators as well as apprehension about what future skies full of these devices might really be like.

 

What’s Next: Even with all the bad news, the drone market is continuing to expand, especially in the commercial segment.

 

Despite increased restrictions on drones, sales to consumers are still expected to increase in 2019.  However, the real excitement will likely continue to be in the commercial space where professional-level drones (with licensed operators) are finding a variety of applications in everything from real estate and film production to building inspection and utility deployment.  Additionally, expect to see continued development from big players in the delivery space, with drones (both aerial and ground-based) being tested for delivering packages, food, documents, and more in urban environments.

AI/Machine Learning

Even though there was a lot of progress in technical tooling for AI (and more specifically machine learning) in 2018, on the business side we saw many customers and executives come to terms with the limitations of the current technology.  On the consumer side, AI-based voice assistants continued to frustrate users with spotty voice recognition and contextual learning while AI-backed chatbots often prompted angry customer complaints. On the corporate side, many executives who were led to believe AI could easily replace white collar jobs found that outside of ideal use cases and large training data sets, capabilities are still very much in the “coming soon” territory.

 

What’s Next: Expectation misalignments haven’t slowed development of hardware and software tools, leading to expectations of continued improvement for the near future.

 

Improvements in the machine learning tools from Google, Facebook, and a slew of startups are lowering the barrier to entry at the same time hardware for model training is getting cheaper.  Additionally, new models will continue to be developed and refined for a variety of industry-specific use cases, making machine learning more applicable to a wider variety of tasks. While 2019 won’t see anything approaching the “AI can tackle any problem” hype that built up over the last two years, areas like legal reviews, document generation, and visual manipulation where pattern matching and large datasets are common will continue to see interesting new tools and platforms driven by AI backends.

 

Looking Forward

While 2018 was filled with tech disappointment on many fronts, 2019 is looking like the year many companies will move beyond the hype and continue improving products to the point where they seamlessly integrate into consumer and business applications.  As CES unfolds this week, look for these incremental improvements that ultimately build the future one brick at a time.

Michael Dorazio