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Tech Trends 2015

TECH TRENDS2015

Technology

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Devices on a continuum

Wearable technology

The cashless society

Connected cars

An insatiable appetite for video

Where will the growth come from?

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10

8

6

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CONTENT OVERVIEW

As we hit the half-way point this decade, we seem to be in a time of transition brought about by technological advances. The ten short articles in this edition of Tech Trends reflect that.

With more aspects of our lives becoming connected, consumers are leaving data trails that provide valuable insight for product and business development. In this dynamic environment, how might the connected car, the smart home, wearables, augmented reality and the Internet of Things change our lives?

As consumers become more tech savvy, we predict they’ll increasingly rely on technology to support and manage their lifestyles. Security and privacy will become much bigger issues – particularly as cashless payment goes mainstream.

This isn’t a time to sit on the fence. It is a time to use research and analysis to generate truly, innovative products and solutions that appeal to today’s connected consumer. These articles will provide the insight and inspiration to continue navigating this evolving landscape.

INTRODUCTION

Smart home, smart city

The data divide

Security

Augmented reality

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18

20

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Where will the growth come from?

Key stats at-a-glance:• Mobile subscriptions are expected

to reach 9.2bn by Q4 2019, up from 6.8bn in Q1 2014.

• Growth in Asia will be driven by new subscribers. Five countries – India, China, Indonesia, Thailand and Bangladesh – accounted for more than 50% of all new mobile subscriptions in Q1 2014.

• In mature markets growth is driven by increasing the number of connected devices per household.

• Ericsson estimates that by 2019 more than 80% of all mobile subscriptions will be for mobile broadband.

• Data use is predicted to grow ten-fold between 2013 and 2019.

In 2015, volume andprice combined will deliver technology device growth in India of US$5bn.

The technology sector will increasingly look to developing markets for growth. With device ownership near saturation point in some developed markets, vendors will need to offer more innovative solutions to maintain and grow market share.

Statistics paint a picture of increasing disparity between developed and developing markets, but to see where future expansion of the tech market will originate, we need to look beyond the market size to growth rates.

From this perspective, although China (with sales in 2015 estimated at US$200.8bn) should still be high on any tech brand’s hit list, other markets in Asia and Africa can’t be ignored. India’s large, young population offers huge potential to tech device manufacturers and data providers. At the moment comparable sales of US$34.8bn are much lower than China’s, but the market’s growth rates are far higher. In 2015, volume and price combined will deliver technology device growth in India of US$5bn. The primary driver of this increase is smartphone sales at 16%.

Other developing markets are showing great promise for future sales too: Pakistan at 15%, Nigeria and Bangladesh both at 13%, and Vietnam at 11% are

all set for impressive performance in 2015. In fact, the ten markets listed below will together deliver sales of US$10bn, with the worldwide market staying flat at US$1trillion – unchanged since 2011. These emerging markets – including those in BRIC and MINT – have replaced developed countries such as the US, Japan, the UK and Germany as the engines of growth. With US households now having an average of four connected devices, manufacturers in developed markets are concentrating on cross-selling to consumers hungry for even more devices for their homes and, increasingly, to manage their lifestyle.

Our forecasts for January 2015 based on point-of-sale data from up to December 2014 (not including the US):

By 2019 morethan 80% of all mobile subscriptions will be for mobile broadband

80%

1. Pakistan

2. India

3. Vietnam

4. Nigeria

5. Egypt

6. Iraq

7. Indonesia

8. Thailand

9. Kenya

10. Saudi ArabiaSource: GfK’s trends and forecasting data

Ericsson mobility report

Our analyst, Kevin Walsh, says:“While there remain significantopportunities for growth in emergingmarkets, technology brands need tothink about their strategies to ensurethey have the right approach forsaturated, developed markets. Moreflexible and innovative offerings willneed to be delivered, and demonstratehow they can fit in the increasinglyconnected and complex lives ofconsumers. We are already seeingevidence of this as operators allowshared connectivity in and out of thehome across both fixed and mobiledevices for an entire household.”

WHERE WILL THE GROWTH COME FROM?

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Devices on a continuum

open, neutral platforms that enable different device original equipment manufacturers (OEMs), operating systems and content providers to connect and share across a variety of screens.”

Our analyst, Arndt Polifke, says:“Meeting consumers’ desire to connect their lives seamlessly across all their devices is a significant challenge. For the operating systems, delivering both an open environment that works seamlessly with the Internet of Things, wearables, the connected car and home is one challenge. Another perhaps contradictory obstacle is ensuring its security. The winning ecosystems will be those that either establish a dominant position for their platform – as with iOS and Android for smartphones – or provide common,

Research we undertook for Facebook found that more than 60% of online adults in the UK use at least two devices every day, and more than one fifth usethree devices.

As screens become omnipresent and consumers expect to switch seamlessly between them, will there ever be a dominant operating system?

Connected devices come in a wide range of screen sizes: from large smart TVs, to hybrid computers, to maxi/mini tablets, through to phablets and smartphones, and most recently micro screens on wearables. Consequently, devices no longer fall into neatly divided “traditional fixed” versus “mobile” categories, or “business” versus “pleasure”. With the ability to access your own files from any device, there is now a continuum that ranges from personal to shared, through to mobile.

How consumers use their screens is dictated by size, portability and the nature of connectivity (i.e. with or without SIM/WiFi/3G/4G). The desire

to move between those screens seamlessly – viewing the same content on a wall-mounted screen and then on a watch face sized screen – means having a single, common operating system will continue to be the battleground of 2015 and beyond. This becomes even more essential when we factor in the connected car, smart home and the Internet of Things.

Research we undertook for Facebook found that more than 60% of online adults in the UK use at least two devices every day, and more than one fifth use three devices. Four in ten sometimes begin an activity on one device and finish on another. In general, people move to a larger screen, starting with a smartphone and progressing to a tablet (25%) or laptop (60%). Comfort and convenience are the main drivers to switch device mid-activity, but urgency, the time involved, security, privacy and the level of detail required are also factors. Switching happens most often at home in front of the TV, when all devices are within easy reach and when access to WiFi means device connectivity is optimized.

Over half of online adults in the UK use at least two devices every day

60%

Meeting consumers’ desire to connect their lives seamlessly across all their devices is a significant challenge.

Source: GfK study for Facebook, 2014

DEVICES ON A CONTINUUM

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An insatiable appetite for video

Our analyst, Niko Waesche, says:“Operators need to identify how they can monetize the proliferation of video as they are carrying a large part of the costs, but consumers want all-inclusive data plans. Digital video-enabled platforms such as YouTube and Facebook are already monetizing short-form video on mobiles powered by advertising, going “over the top” of operator networks. Finally, media networks and studios are looking at ways into the market. They certainly have proficiency in video advertising, but might need to share revenues with mobile ad networks that have more, and deeper, data. We may well see an explosion of partnering, perhaps with operators teaming up with media groups.”

Need to know:• Millennials spend more than one

third (34%) of their TV-watching time online – three times more than everyone else.

• With two thirds (66%) of consumers watching live content on TV, it’s still the go-to media for viewing events as they happen.

• Paid-for services and owned content are most viewed on TV and PC.

• PCs and tablets are used most to access free content.

• Mobile is currently least used for viewing subscription services.

of Millennials with a mobile phone dual screen while watching TV.

There’s a growing appetite for video content across all screens, both at home and on the go. How should advertisers, media buyers and content providers maximize the opportunity? Can network operators meet the increased demand for data?

2014 was the year that “binge-watching” became a term we all understood. More screens and the rise of online media services combined to identify and meet an almost insatiable appetite for video content. So much so that Ericsson forecasts video content will represent 50% of all global mobile data traffic by 2019. Between now and then it will grow 13 times to reach this size.

Mobile devices are taking an increasing slice of this growth: 30% of all online video watched in Q3 2014 was viewed on smartphones or tablets – double the amount the same time a year ago. With the introduction of tablets and larger smartphone variants (phablets) viewing quality has improved. The way people consume video content is changing too. Our Future of TV study highlighted how the content we’re watching online differs by screen size: on smartphones it is short-form clips like YouTube, on tablets and laptops it’s short series and comedies, and on TV screens it tends to be longer programs and movies.

Millennials in particular are used to viewing extended video content on any of several screens in the home, whether in

isolation or conjunction with each other – 84% of Millennials with a mobile phone dual screen while watching TV. They are not only viewing video, but creating and consuming user-generated content, and conversing via video telephony or “snackable” video messaging apps. All of this is currently available via home/open WiFi or enhanced mobile networks that offer increased speed and capacity.

This desire for video content and its mobility via smartphones gives advertisers, content providers and media buyers more opportunity to engage with audiences. The industry has long been familiar with the power of video advertising. As content providers and advertisers increasingly prefer to push their content as video, so it will continue to create a challenge for mobile operators to keep up with this demand.

Two thirds of consumers watch live content on TV

66%84%

Source: Ooyala Global Video Index, Q3 2014 GfK’s Future of TV study GfK’s trends and forecasting data

Ericsson mobility report

AN INSATIABLE APPETITE FOR VIDEO

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Wearable technology

Our analyst, Jan Wassman, says:“While the idea of relevant digital information accessed at a glance is highly appealing, early wearable designs have so far failed to impress consumers. The lack of developers offering killer apps to evangelize beta products such as Google Glass – not to mention the lack of effective marketing – has left early buyers unclear how to use their recently acquired purchases. Many people have delayed initial smartwatch purchases until they have seen the much-anticipated offer from Apple in spring 2015.

It won’t be until wearable devices link data “sensed” about users with their immediate surroundings, and deliver timely, relevant information and offers, that the true benefits of wearables will be realized. We are on the cusp of a significant shift in the next phase of evolution of wearable technology as strong design meets great UX, creating opportunities for much wider wearable applications, but we’re not there yet. Apple may hold the key.”

acquire new clothing simply because it comes with wearable technology. In a survey carried out in 2014, we found 69% of people in the UK would wear clothes or jewelry with integrated activity trackers, with bracelets (33%) and shoes (26%) the most popular overall. Men were more interested in connected clothes – t-shirts, shoes and belts, whilst women preferred jewelry – necklaces, bracelets and rings.

Need to know:• Our data shows that 2.9m wearables

were sold in 2014 in Great Britain, Germany and France. 40% of sales were generated in the fourth quarter, coinciding with Christmas purchases.

• 65% of consumers would buy a smartwatch from a tech brand, compared to only 6% who would buy it from a fashion brand.

• The need for wearables to look good isn’t lost on the market leaders: Apple has hired Burberry’s ex-CEO, and Google has partnered with luxury brand LVMH.

Acceleration of demand will only happen when the aspirational connects with the functional.

Wearables may be the most talked about consumer electronics sector at the moment, but so far sales have failed to impress. So where is the tipping point for the wearables market?

Our research provides numerous insights into consumer mindsets when it comes to wearable tech. Firstly, there is little clarity around the benefits. In the very near future they might be capable of recording every aspect of our lives and connecting to our surroundings via the Internet of Things – but so far it is fitness and activity trackers that people have been buying and this appears to be because their functions are easy to understand and communicate, compared to say a smartwatch. People don’t understand the need for companion devices, and would prefer device self-sufficiency. For instance, 56% of people we surveyed said they would like a smartwatch that operates independently of a smartphone. Brands are rightly focusing their efforts on achieving this tipping point.

User experience (UX) is another barrier. Wearable devices are currently more likely to appeal to geeks and the tech-savvy early adopters who have a higher tolerance towards the existing, often clunky and unattractive designs. As with other consumer electronic products, acceleration of demand will only happen when the

aspirational (fashion and UX) connects with the functional (benefits). Historically, each phase of device adoption has been accompanied with a breakthrough in UX and the look of the device. Our data tells us that 35% of consumers believe it is “important that tech products look good”. For wearables, with their physical closeness to the consumer, this is even more important, making style a second key tipping point.

Of course the technology itself is important. They may be yet to hit the mass market, but when smartwatches become more versatile, we’ll see a growth in sales. Moving from email notifications, navigation and music control to making payments and providing personal ID means wearables will appeal to more consumers.

Sensors look set to be the next big thing for wearables. Gyroscope, fingerprint, accelerometer, proximity, ambient light and heart rate monitors will appear not just in fitness trackers but smartphones, wearable glasses, smartwatches, smart bands, and smart jewelry. Sensors are particularly appropriate for smart clothing because they are accurate and hidden – so this could become a tipping point for wearable tech take-up. Ultimately, consumers will be looking to have the benefits of wearable technology within their clothing of choice, rather than to

In 2014, 40% of wearable device sales in France, Germany and the UK were generated in the fourth quarter

40%

Source: GfK trends and forecasting data GfK point of sales data GfK Wearables study, 2014

WEARABLE TECHNOLOGY

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The cashless society

Need to know:• Currently only 4% of consumers pay

for day-to-day items like groceries and fuel using their mobile phone, but more than 11% of consumers expressed an interest in this – and this figure is higher still for Millennials.

• One in five mobile users has used their device to make a payment.

The benefits have to be more compelling than the convenience.

Will it be the technology providers, retailers, mobile manufacturers or banks that convince consumers to adopt mobile wallet? Or will consumers confound us and choose to do something completely different altogether – just like they’ve done before?

Mobile payment is being adopted all over the world in different ways, whether it is via SMS transactional payments, direct mobile billing, mobile web payments (WAP), mobile banking apps or contactless near field communication (NFC). In developing countries mobile payment solutions have been used successfully as a way of bringing financial services to the “unbanked” population, but widespread consumer adoption has not yet happened in any market – developed or developing – and is by no means guaranteed. So what role might mobile payment have as part of a cashless society of the future?

As with anything new, people need to understand the benefits before they’ll move to the next big thing. For payments, this is even more important. Firstly, consumers in the developed world have many established ways of paying for goods and services and without a clear consumer benefit they will be slow to adopt new ways to pay, if they do at all. The UK is one of the most advanced payment markets globally, but it took 16 years for the majority of consumers to use debit cards regularly.

Secondly, the benefits have to be more compelling than convenience. Integrating payment with loyalty rewards and discount vouchers with personalized, context-driven rewards certainly meets the criteria. Add technologies that provide 100% confidence and reassurance that payment and personal details are secure, and you have reasons for even the most reluctant consumer to adopt mobile wallet.

The rapidly changing retail landscape will also be a key influencing factor. In a number of markets, retailers already offer payment solutions with integrated banking services and reward schemes. Providing payment within a shopping app allows the retailer to fine-tune offers and rewards, creating closely targeted, customized products and experiences. Combined with the potential rise of proximity payment solutions (check-in and out via the app) and the end of the traditional “checkout” part of the physical retail journey, retailer closed-loop solutions offer strong competition to broader-based digital wallets.

mobile users has used their device to make a payment

1/5

Our analyst, Alexander Zeh, says:“Apple Pay’s entry to the market could be a genuine game-changer with its upmarket early adopter base, focus on customer experience, existing e-commerce platforms and strong

brand. Apple has overcome the barriers of handset fragmentation and mobile operators wanting to facilitate the transaction. Simultaneously, Samsung has been developing a response to Apple Pay with Paypal, maximizing the security strengths of handset’s fingerprint scanners to authorize payments. But as banks and payment providers gear up to launch real-time solutions within the secure hub of mobile banking, we still cannot rule them out of the market. They are trusted globally by billions of consumers and businesses for their security and payment system resilience.”

Source: GfK Financial Research Survey GfK trends and forecasting data

THE CASHLESS SOCIETY

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Connected cars

Our analyst, Frank Haertl, says:“The overall spend on a vehicle is unlikely to change dramatically, but connectivity has the potential to completely alter the automotive value chain. As the demand to connect their vehicle to personal preferences and surroundings grows amongst consumers, so that cost of connection will create new (relatively small) revenue streams for mobile operators and software developers. More significantly, the connected car will impact other existing revenue streams such as the cost of insurance and repairs. Whether it is the mobile operator, operating system or car manufacturer, the key battleground this year will be over who takes ownership of the most valuable asset – the data.”

Need to know:• Accidents are the main concern globally

(37%), ahead of fuel costs (36%), the cost of repairs (31%) and traffic (32%).

• Costs associated with driving are the main concern in developed markets (Germany, UK and US). Safety is the main concern in developing markets (Brazil, China and Russia).

• Self-driving cars appeal to 66% of respondents.

• 44% would consider car sharing/lift-sharing/ride-sharing/carpooling, (highest in Brazil 57%, lowest in Germany 34%).

• More than one third (34%) would consider pay-as-you-go cars (highest in China 55%, lowest in Germany/UK 23%).

The vehicle is no longer solely the province of the automotive manufacturer.

So far, car manufacturers have tended to use digital technology to enhance the in-car entertainment experience, but more recently attention has moved to connecting cars to external sources for safety, telematics and infotainment. These benefits are easy to communicate, and data from our multi-country Connected Car study shows significant interest in a range of possible new vehicle concepts, particularly amongst younger auto/technology engaged consumers.

The immediate impact of the connected car is already being felt in the insurance and vehicle maintenance markets where the use of telematics, for example, is helping to reduce insurance premiums for some young drivers. Automatic connected cars with personalized routing feedback are estimated to save drivers up to 30% in fuel costs. Infotainment, including advanced navigation systems, are also appealing. All of these features require greater

connectivity between the driver, their surroundings and road users.

One major implication of the shift to connected cars is that the vehicle is no longer solely the province of the auto manufacturer. The market is opening up to a wider range of companies including technology manufacturers, digital entertainment companies, mobile operators, software designers, content and financial services providers.

Choosing the right brand partnerships will be essential to help companies succeed in unfamiliar territory – not just software and telco brands, but car marques too. Which operating system should they go with? With no dominant player as yet, some auto manufacturers, for example Hyundai Sonata, have opted to give their end-users the choice to connect their smartphones to either Android Auto or Apple’s CarPlay. This is an expensive route and low appetite for consumers to pay more for the benefits of the connected car suggests that car brands will need to make a definitive choice between Android and Apple in the near future.

More than one third of consumers would consider pay-as-you-go cars

34%

Source: GfK Connected Car study, 2014

Safety, economy and entertainment are the three main benefits of the connected car. They are the advantages that drivers appear ready and willing to embrace, but less willing to pay more for. So which companies will benefit most from the new value chain the connected car will create?

CONNECTED CARS

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Smart home, smart city

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Our analyst, Robert Wucher, says:“Governments and municipal authorities will drive initial growth of smart homes and smart cities, drawn by the energy saving benefits of machine to machine (M2M) technology to best manage resources. So not only will consumers benefit on an individual level from being connected, but also there will be an impact on the broader world through more efficient connected cities. Connected homes will of course generate real-time data. Whilst mining it could help solve basic, previously unsolvable problems, it will also create new challenges around personal data control, and possibly even individual rights. So as we enter a new world of the smart home and smart city, everyone in the value chain needs to be very clear on how to collect, store and use the resultant big data on behavior.”

Governments and municipal authorities will drive initial growth of smart homesand smart cities.

In the future we’re told that cities, homes and our lives will be connected and ‘smarter’. In reality, how long will it take before people adapt their homes to make them smart, and will concerns about personal rights and data privacy hinder the evolution of the smart city and home?

It seems inevitable that the future home and city will soon be connected in some way. However haphazardly at first, our environment will increasingly be linked to the “Internet of Things” – from the heating in our homes, to our cars, to street lighting and road safety. At the moment, Google-owned Nest seems to be positioned to maximize the smart home opportunity, enabling links to other devices such as Jawbone health trackers, Whirlpool home appliances and even the DriveStyle app in Mercedes-Benz cars. But are consumers ready to invest to “connect” their homes? And what will brands do with the resulting ‘big data’ they gather?

GfK data from a survey in the UK in Q4 2014 shows an overwhelmingly positive response to the idea of a fully connected smart home, with more than three quarters keen on the idea. The sticking point is that only 35% said they would be willing to pay to make their homes smart. There are differences by age and these explain the problem: around half of those aged 18-34 are prepared to pay (49% of 18-24 year-olds and 52% of the 25-34 age group), but

that drops sharply to 21% of people 54 and older. And this is the crucial figure because achieving the real gains of a smart home will stem from having a fully integrated system which demands a significant and long-term investment. We have observed a similar response in research carried out in Germany, where 50% of homes are rented. This sort of expenditure and commitment is more likely to be made by the older generation who own their homes, or using ‘Plug & Play’ solutions.

At the moment it seems likely that people who do want to live in a smart home may be able to do so by making one initial investment in a hub and/or platform to which smart products can be added to over time. Samsung’s Smart Things and Apple’s HomeKit are two such examples. Communicating to home owners the benefits of an investment in a smarter home is a similar challenge to that in the wearable tech sector. The eventual winners will be those companies that offer compelling reasons for consumers to spend their money on connecting their homes, as well as overcoming any technological issues. We think take up will be slow and players need to be realistic. Consumers will start with smart meters and remote controls, upgrading and investing when the benefits and usability become clearer – and not before.

Over half of people within the 25-34 age group would pay to make their home smart

52% 35%While UK consumers showed an overwhelmingly positive response to the idea of a fully-connected smart home, only 35% said they would be willing to pay to make their homes smart.

Source: GfK UK smart home survey, 2014 GfK Germany smart home survey, 2014

SMART HOME, SMART CITY

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The data divide

encryption services such as Blackphone that stop unwanted monitoring. But this won’t be a big data utopia where the information held on consumers is equal. We believe personal data management will become an increasingly polarized area, with the tech savvy, affluent customers controlling access to their information, while others struggle to organize how their data is used. The key here – and to the future – is to give consumers the information, tools and power to be in control of their own data.

Drivers in Western Europe are happy to have telematics tracking installed in their vehicles.

As we look ahead, we see a future where more and more data is captured and mined for information on individuals – from their purchase behavior to their health, household bills to their driving style. The question is – who owns this data and how might consumers manage it?

There’s no question that people care about their privacy. Teenagers tell us they are already very careful on social media – our global consumer trends data shows that 48% of 15-19 year olds agree with the statement “it is important to actively manage my online ID and information”. But they are unclear how their data might be used in the future, and just like everyone else, not all are equipped to navigate privacy.

However, there is a value exchange. In GfK’s Global Young Shopper Survey run at the end of 2014, consumers aged 16-21 put customization high on their list of expectations for future retail experiences. 47% of 16-21 year olds in the US want to buy products unique to them, and 42% want the store to “talk” to their mobile phone to tell them about products that match their needs. It’s not just young shoppers that are willing to trade their personal information where they see a direct benefit to them – this result was mirrored across all consumer groups.

Where the benefit is clear, data worries fade into the background. For instance, drivers in Western Europe are happy to have telematics tracking installed in their vehicles to save money on their vehicle insurance premiums, and there are clear indications that health insurers are investigating a similar

approach. But brands must be careful not to go too far – as soon as the “data divide” is breached, privacy concerns come into sharp relief. Fitness trackers, smartwatches and health-related apps all have access to unprecedented insight into an individual’s behavior – and this will only increase as the Internet of Things becomes more accepted. Any ill-advised use of personal data (such as misplaced ads on social media sites) or unmet guarantees of information security will inevitably result in loss of trust. The nirvana will be a point where consumers feel “the more I give, the better the service I get back”.

For brands and businesses, privacy management will become a point of differentiation, where consumers choose to deal only with those companies they trust to treat their information with respect. As people become more aware of what they can control, a whole new sector will blossom: we’ll see an increase in the use of ad-blocking software as some consumers react to personalized ads, of apps tracking apps, and

In the US, 47% of 16-21 year olds want to buy products unique to them

47%

Brands that push the boundaries will quickly fall out of favor.

Our analyst, Norbert Wirth, says:“Social media has given consumers the power to name and shame brands that undermine trust in how their personal

data is used or exploit their personal details. Brands that push the boundaries will quickly fall out of favor. However, a compelling proposition can encourage more risky behavior. For example, some free mobile app downloads will allow the collection of personal and identifiable information without the user’s knowledge. Consumers are currently vulnerable to being exploited in situations like this, making the need for the industry to adopt best practice critical, before breaches of personal data security lead to the enforcement of stricter rules.”

Source: GfK’s global young shopper survey, 2014 GfK’s trends and forecasting data

THE DATA DIVIDE

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Security

7 8 9

4 5 6

1 2 3

Our analyst, Ranjiv Dale, says:“Cyber security can seem a threat that doesn’t impact people directly, with financial institutions, companies or governments often footing the bill when things go wrong. However, as viruses have affected users’ computers in the past, leading to investment in anti-virus software, so we also expect a change in consumer attitudes towards the use of connected devices in the future. Rather than using a wide variety of security solution providers, consumers are likely to migrate to a handful of trusted companies to address their security concerns. Companies that are trusted to develop secure applications, or proactively protect consumers from external threats, will be the main beneficiaries.”

We’ll see an exponentialincrease in the attack surface available for cyber criminals.

How will consumers’ views towards security change in 2015 and beyond? What does the Internet of Things mean for digital security? Which companies will benefit in the future?

2014 was blighted by the much-publicized cyberattack on Sony Pictures Entertainment’s infrastructure, and the Russian hacking gang CyberVor stealing 1.2bn usernames and passwords. With global media coverage of these issues, consumers are aware of how vulnerable corporations are to hacking – even the largest ones, and how exposed they are to cybercrime.

When maintaining a level of security online, the challenge is to constantly stay ahead of cyber criminals’ evolving methods. This was a topic of discussion at the International Consumer Electronics Show (CES) in 2015, where for the first time a significant group of 82 exhibitors focused on security.

The proliferation of smartphones, third-party apps and cloud services has created a treasure chest of personal data and passwords that attract criminals. To remain appealing and competitive, some apps have been launched too quickly, with chinks in their armor. In the rush to release contactless and mobile payment apps, some providers may be compromising security, including sensitive financial data. Others may even have been developed by the criminals themselves and contain Malware. Some have already boasted of compromising iCloud services. Easy-to-crack passwords are a big risk. According to Digital Shadows, “2015 is

likely to be the first year when passwords start to be phased out in favor of a number of multi-factor options. Next year may well be the first year of multi-factor by default.”

The next big concern is the Internet of Things. We have already seen one site accessing personal webcams and broadcasting the content. Consider the possibility that connected cars could be compromised, even whilst in transit, or that hackers gain entry to homes with connected entry systems. Jamison Nesbitt, founder of Cyber Senate, a community of global cybersecurity businesses, has gone as far as to say that “(the IoT) is the main cybersecurity risk for 2015. It presents unique security challenges in terms of the number of connected devices present…there are millions of hackers out there that could compromise these interconnected systems. We have sacrificed security for efficiency.”

The general consensus is that along with the growing number of devices, applications and ‘Things’, we’ll see an exponential increase in the attack surface available for cyber criminals. Security is going to be a key issue in 2015.

1.2bn2014 was blighted bythe much-publicized cyberattack on Sony Pictures Entertainment’s infrastructure, and the Russian hacking gang CyberVor stealing 1.2bn usernames and passwords.

SECURITY

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Augmented reality

in conjunction with the Internet of Things, where many companies will vie to combine the physical with the virtual.

Amidst this crystal ball-gazing one thing is certain: we live in the real world and want to experience the physical objects that are part of any augmented reality experience. Indeed the Skylanders game, programs and collectible characters are evidence of this fact. Companies that will lead the way in augmented reality development will not only find a way to enhance the physical experience, but will also ensure that people stay grounded in the world around them.

Retailers are already leading the way using augmented reality technology that allows consumers to visualize virtual objects in their real worlds.

Augmented reality looks ready to add a virtual layer to the physical world – from museum visits to shopping, medical procedures to education. Indeed there are a myriad of opportunities to inject virtual objects into physical reality, as well as to harness the data generated by this virtual layer to meet emerging consumer needs.

Look beyond its gaming applications and we can see augmented reality (AR) increasingly becoming more of a fixture in the future. Retailers are already leading the way using AR technology that allows consumers to visualize virtual objects in their real worlds – to help consumers make up their minds. Specifically, by replicating their homes using a camera and screen from a mobile device, IKEA’s augmented reality app allows people to place items from the retailer ’s catalogue into their own living rooms. Online clothing retailer ASOS’s Fashion Finder AR technology allows shoppers to upload their photos to try on different styles in a virtual fitting room. Going one step further, Swedish start-up Volumental is aiming to “bring your body online”, experimenting with 3D printing and imaging to create designer clothes precisely tailored to customers’ bodies. In a more general sense, CAD software and Oculus are increasingly being used to design store layouts as well as to mock up prototype products in near real-time.

Augmented reality takes on a new meaning with big data. Wearables

will provide a hands free overlay of information such as navigation and notifications. Layering Google Now, with its predictive search based on geolocation, browsing activity and email content, will allow wearables to provide information such as flight times and delays when an email containing a boarding pass is sent to a Gmail account. With AR available across mobile, tablet, browser, glass, smartwatch, etc., Google’s ubiquity creates an opportunity to provide a constantly present layer of information for those deeply embedded in its ecosystem. While Google would seem to have an upper hand and be a potential leader, the vast number of connected devices and services that will provide the ability to gather and feedback data on our behavior and preferences. This will happen particularly

With real-time big data analytics, players will be able to provide consumers a more engaging augmented reality experience.

Our analyst, Kevin Taylor, says:“Virtual and real worlds are moving closer together, enabled by an ever-growing amount of data flowing in both directions. As more devices come online

and the Internet of Things becomes a reality, players will have the opportunity to leverage real-time big data analytics to provide consumers a more useful and engaging augmented reality experience. This is when AR will have a real chance to reach its potential. Now is the time for brands to get creative and find ways to utilize the power of data to create amazing augmented reality experiences.”

AUGMENTED REALITY

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