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09 December 2023

Firms locked in a Darwinian tech battle to survive

By David Robertson


Lighter laptops, smaller iPods, supercomputers masquerading as phones and yet despite all these technological improvements I still find myself travelling with a vast assortment of cables and plug adaptors. Add in the “will it or won’t it” lottery of connecting to a hotel’s internet and I sometimes wonder if all this technology is actually making life more complicated, not easier.

It seems that we have become slaves to gadgets that are so powerful we can only begin to guess at what most of the buttons do and encumbered by machines that never use the same connections as any other. But this proliferation of devices does has its uses.

Consumers road test new technologies to death and discard those that are too complicated while those that capture the imagination become the standard and are adopted by everyone.

The tech world is Darwinism on fast forward, and that is very important for the vast majority of us who are tech-illiterate. Products that become mainstream are quickly simplified and refined to become a standard that all other gadgets (and software) must adapt to. Take the universal serial bus (USB), which is now practically the only port of consequence on a computer.

The USB was developed by Intel and Microsoft in the mid 1990s and as it became more popular, more peripherals had to be able to connect to it, which created a virtuous circle. By the start of this decade the USB had become so mainstream technology that companies came together to decide how to upgrade the system to make USB 2.0. Companies had given up trying to compete with USB and were instead collaborated to ensure everyone benefited from a better second-generation design.

So technology does get simpler, but only once an outright winner has emerged. We saw a brutal example of the winner-take-all world of technology last week when Sony’s Blu-Ray high definition disc format trounced Toshiba’s HDTV.

Sony has spent a fortune to ensure Blu-Ray wins the high def battle, having seen its Betamax video platform beaten by VHS in the 1980s.
Sony was able to claim victory by effectively giving Blu-Ray players away in its PlayStation3 game machine. The company lost money on every box sold (more than $3 billion in two years) but the potential future rewards will be enormous. Sony will now define the future of film and television media, giving it first mover advantage at every stage of development and forcing other companies to adopt its platform.

Two of the next battlegrounds for tech companies are likely to be in mobile phones and wireless computing (although the boundaries between the two are disintegrating so fast this may really be just one fight).
The introduction of the iPhone has forced other mobile manufacturers to rush out models that have similar functions – the Mobile World Congress in Barcelona two weeks ago was awash with imitators. That means phones with e-mail and internet access will become standard, although how these devices look and operate will also go through a selection process.
For example, does Apple’s touch screen become the standard or will Blackberry’s mini qwerty keyboard prevail? Another new Apple product hints at the future for the laptop/desktop computing market.
The MacBook Air is the lightest laptop available and it has virtually no connectors. It has no DVD player and no Ethernet port either. It has just an audio socket, a single USB and a port for allowing visual images to be exported. It does everything else wirelessly and I sincerely hope that this is the future because it promises to rid me of all those unwanted and annoying cables.

However, it is not just gadgets that are locked in this Darwinian tech struggle. The fortunes of corporations fluctuate with their successes and even countries gain and lose by their adoption of winning technologies.

The UAE has begun to make some interesting moves in the tech world with Dubai International Capital taking an estimated $1.5 billion, or three per cent, stake in Sony last year. But it is noticeable that within the Middle East only the UAE is reaching out to the tech world, and this is a mistake.
Consumer technology is exactly the sort of high value, strategically important, labour-light industry that Middle Eastern countries should encourage. But to be successful the UAE and its neighbours have to create an environment that allows new technology to flourish.
I don’t mean tax breaks. I mean the simple stuff such as a reliable power supply and a telecoms system that doesn’t permit firms to gouge consumers with outrageous and inhibitive prices.

There is no point buying a clever phone or a computer that has finally shed all its cables if you can’t afford to use it. (David Robertson is business correspondent for The Times of London)