We are starting to publish a number of articles about what 2020 was like, what was remembered from devices, events on the market. These are the final materials that, if not draw the line, then fix the main thing that happened in 2020. Without knowledge of the past, it is impossible to form an idea of the future, and therefore these articles will be useful not only as a memory. In the first article of the series, let’s talk about how 2020 changed the world that we knew before. Go!
- A leap year that was not the same as it used to be – a pandemic
- Distance education, internet quality in different countries
- US trade war against China, Huawei and others under siege
- American politicians against IT companies, Europe’s response
- Online, online and online again – virtual world for sale
- What will happen next?
A leap year that was not the same as it used to be – a pandemic
The global recession remained a scarecrow for many, and the markets promised that 2020 would not be a turning point, after all, several years before that countries had successfully swept economic problems under the rug, hiding them from a not very close external view. It was beneficial for everyone to pretend that everything was in order and nothing bad was happening. The very possibility of a recession was denied, and those who talked about it were called alarmists.
The emergence of a new type of coronavirus in Wuhan, China did not initially look like something extraordinary, another virus among many. But then there was a closure of cities with a population of millions, the spread of the isolation zone to other regions. We watched live as the Chinese rush to build new hospitals to accommodate the sick. A picture from Hollywood films, something infinitely distant and incomprehensible to most.
Electronics manufacturers were the first to feel the consequences of quarantine, dozens of factories are located in Wuhan, this is a powerful industrial cluster. The isolation later spread to Shenzhen, and things took a very different turn. In fact, production stopped, as well as research laboratories. Any company directly related to China has experienced remarkable problems. Usually in the spring, at the MWC in Barcelona, we see a scattering of electronics, a demonstration of infrastructure solutions, each of the manufacturers is preparing for this event. Many had new models ready, but there was no understanding when they would go into production. The factories stopped, it became problematic to buy components. The aftermath of China’s quarantine has reshaped the entire electronics market in a matter of weeks. There was a shortage for the most popular goods, those who were quicker and smarter tried to choose everything that was in warehouses, including those outside China.
Apple was the most unlucky with China, production stopped, deliveries of the current lineup decreased. In the spring, Apple was even forced to reduce as much as possible the replacement fund for the iPhone in service centers, as a result of the closed China and the stoppage of conveyors. But most importantly, the development cycle of the new iPhone line was completely disrupted. Usually at the end of January, the company’s engineers go to China to test prototype production together with Foxconn, to finalize certain details. In 2020, this became impossible, Apple found a way out to use cameras, an augmented reality system. This is a forced measure when the company was looking for a way to continue working on projects. Today we already know that the iPhone 12 went on sale a month or more later than its predecessors years earlier. For models of the Pro line, there is still a shortage of components, which was formed due to the pandemic. A difficult year for Apple, as the company is directly dependent on Chinese manufacturing facilities, this crisis showed that the dependence is too great. Therefore, Apple is hastily withdrawing factories from China, asking its partner, Foxconn, about it. Southeast Asia only benefits from this, but China is losing assembly orders, which the country is clearly not happy with.
Quarantine swept around the world in waves, somewhere the closing in the spring was tough, somewhere soft enough, and in Sweden it was not at all. Nevertheless, everywhere purchasing activity dropped to a minimum, the current crisis began to be compared with the times of the Great Depression. But even a direct comparison of economic indicators showed that this crisis was much larger and affected the entire planet. An unprecedented drop in economic activity, a decrease in the number of flights, industrial emissions. An unexpected effect of this was an improvement in the environment, the air was cleared during isolation. In Venice, the canals became transparent, the unpleasant smell disappeared, fish and even dolphins appeared. Nature very quickly began to take its toll.
But for tourism and aviation this year has become disastrous, these industries have suffered more than ever. Our habits have changed, the way we live, and the pandemic has given impetus to changes in culture, medicine, technology. Overnight, the world was completely different.
Distance education, internet quality in different countries
The pandemic imposed one of the main restrictions, people had to be isolated in their homes. For a full-time education system, this meant a radical change in all principles of work. The possibility of distance learning is described not only by the availability of devices for this at the schoolchild or student, but also by the capabilities of the educational institution to conduct such classes. In the spring, the demand for computers, laptops, accessories for them skyrocketed in all countries of the world. Corporations and ordinary people bought equipment to secure jobs at home, and students did the same. The surprise of this year lies in the fact that the electronics market, instead of falling, showed a steady growth in certain categories of goods, computers have become the magic wand that has supported many companies. We can also say that the increased influence of computers, their importance, forced many players to reconsider their strategy. A striking example is Samsung, laptops of this brand were available only in a number of certain markets (South Korea, USA), the brand left most markets with this product category. In 2020, it was decided to return computers to certain markets, including the Russian one. In the spring we will see laptops return to store shelves.
Our homes have turned not only into offices, but also into gyms, a place where we spend all our time. For now, let’s focus on the workplace aspect, as there are many non-obvious implications. In 2020, sales of work chairs, furniture for furnishing a workplace at home increased, these products have experienced an unprecedented rise. Those who previously worked only in the office suddenly found that things are not so at home and many opportunities are missing. Something that previously suited or seemed unimportant became annoying, so changes were required. And there were a lot of such changes.
The first and key change was the need to get fast internet in the place where you live. The workload during the daytime has shifted from office districts to sleeping quarters, it suddenly became clear that the good old provider and tariff plan no longer meet the requirements of the time. For operators of the last mile, this was a golden age, as customer needs increased and they began to switch to expensive tariffs with faster network access. Not all providers could provide the capacity of the network, so there were customer transfers from one company to another.
Many moved from the city to country houses, which also pushed up the demand for the Internet, including mobile. The number of those who purchased unlimited tariff plans has sharply increased. This partially offset the losses of operators from roaming, as well as the lower activity of part of the audience, but could not fully cover their costs (including the need to maintain large retail networks).
For the first time in several years, operators experienced peak hours at local points, people loaded their networks to the maximum. Therefore, good operators were considered those that could provide quick access throughout the day, without any differences. Communication costs have grown among consumers around the world, somewhere this growth was noticeable, somewhere sparing, as in Russia.
In Europe, the Internet turned out to be a weak link, officials asked a number of services to lower the video quality to HD-resolution, as the network load was growing before our eyes, and did not allow comfortable use of certain services. In Russia, the networks turned out to be ready for peak loads, there were no problems. And this made it possible to transfer both schoolchildren and students to distance education (it is also important that there are IT systems in schools, electronic diaries for this). When Russia is praised for something, many have a strong rejection, because we cannot have anything good, we sit in a swamp and slurp soup with bast shoes. In fact, the pandemic has shown that telecom companies in Russia are much better prepared for the crisis, there is no need to deteriorate the quality of services. We can also say that IT services for training do not just exist with us, but work. This is not ideal, as a parent I have a lot to complain about, and certainly face-to-face training is much better. But in a crisis situation you do not have to choose, we coped with this test with honor, and students received knowledge at least in this format. In Germany, full-time education, for example, became a necessary measure, since this country could not provide distance learning for everyone. And this, for a moment, is the strongest economy in the Old World.
US trade war against China, Huawei and others under siege
Throughout the year, the US has been building up pressure on China in the trade war. The active phase of the trade war began at the end of 2018 with the detention in Canada of Huawei’s CFO, she is also the daughter of the head of the company. Before that, there were sanctions against ZTE and billions in fines, to which this corporation agreed.
The task for the United States looks very simple: the country needs to maintain technological leadership in all areas, primarily in 5G, where America is far behind China in all aspects. The key corporation for the development of 5G in the world is Huawei, the company has the largest number of patents in the field of infrastructure, and therefore the sanctions against it are so aggressive and cover all areas of activity. This topic never left our pages – dozens of materials, constant references in Spillikins, an attentive reader could form a complete picture of what was happening.
The history of confrontation between the United States and China will not remain this year, it will last for many years, if not decades. And this is not only Huawei, a number of corporations from China that create advanced technologies fell under the sanctions. Among those that are heard, you can recall the drone manufacturer DJI.
For Huawei, there is no question of survival, but the company lives in a difficult environment. It was decided to sell Honor (a subsidiary of Huawei, which produces smartphones and smart devices). This move allows you to take the company out of the blow and save the work team. How successful such a move will be is unclear, it all depends on American politicians. They are the ones who determine today’s agenda. But thinking about selling Honor will give you an idea of the evils Huawei has to choose from.
China cannot be called helpless in a trade war, the state allocates trillions of dollars (this is not a typo) to replace American technologies so that the country has its own production base. Within the framework of such programs, it is planned to create their own factories for the production of microcircuits (initially, using old technical processes, two factories have already been built). By their actions, the United States awakened the giant from sleep, even if it lags behind in the race here and now, but in 5-7 years it is able to catch up and overtake America. US politicians tried to solve the main problem – to weaken their direct competitor on the world stage, but achieved exactly the opposite. We weakened China in the moment, but laid the foundation for the creation of technologies that will not be controlled by America.
The possible purchase of ARM by NVidia caused a sharp reaction not only from China, but also from other countries. The purchase itself has been postponed indefinitely, as there is no clear desire inside ARM to sell itself to an American corporation.
This deal can only be considered from a political point of view, business here fades into the background. The fight for ARM is far from over, one way or another, they will try to absorb the company as a key player in the electronics market. But since the market value of the ARM architecture is enormous, most countries will oppose and restrict such a deal.
It’s too early to say that the US hegemony in the field of IT-technologies has cracked, but a start has been made. I would not be surprised if in five to six years, in addition to Silicon Valley, we will talk about the Beijing IT cluster as a place where world-class technologies are developing. They already exist in China, but there will be even more of them, and they will begin to determine the development of technology for the whole world.
American politicians against IT companies, Europe’s response
Beat your own so that strangers are afraid. Perhaps this is the saying that American politicians are guided by. In 2020, they launched a crusade against the American IT giants: antitrust cases, investigation of business practices that violate competition laws – claims poured in as if from a cornucopia. All significant companies were targeted – Apple, Amazon, Google, Facebook, Microsoft and others. Accusations have already been brought against several, and the same Facebook faces the forced sale of WhatsApp, Instagram. Another question is that such cases have been going on in the courts for years, one cannot expect an immediate result.
The hearings in the US Congress came out very hard, I highly recommend that you remember how it was. Below are a couple of links to refresh these developments.
But Donald Trump’s attack on ByteDance and their social network TikTok was filled with special meaning. America’s president has engaged in government racketeering and has publicly demanded that the Chinese giant sell TikTok to American companies. The sale did not happen, nor did the US lockdown, but read how it happened.
Suddenly, the social network became a threat to US national security, which caused bewilderment among many. But the main thing is that this story is not over yet and will become a legacy for the new president of America. Donald Trump showed that the state can take away someone else’s property, hiding behind its strength. This is a bad example for other countries, they will repeat such exercises and nod to the United States, which put this know-how into circulation.
The discord between the US and Europe over IT companies has been growing throughout the year. The Europeans increased pressure on American corporations and introduced additional taxes. America responded with taxes on cheese and wine and other goods. The exchange was unequal, Europe continues to press and impose new restrictions. The same Google cannot lose this market, therefore it tries to comply with all laws. But this is another front in the struggle against America’s leadership in the IT sphere, the pressure is growing, as well as dissatisfaction with the current state of affairs. Can America Stand Against Everyone? Doubtful. Changes in this area are inevitable.
Online, online and online again – virtual world for sale
The pandemic factor changed our perception of the world around us, we were forced to spend more time behind screens. All changes in the way of life became possible due to the quarantine, so I want to end this text with a few examples that were difficult to imagine a few years ago. But I will emphasize that everything that appeared today existed yesterday, it is another matter that it did not enjoy such popularity.
Sitting at home led to the change in the scenarios of our vacation. Earlier, coming home from work, people switched to household chores, watching movies, or spending time at the computer. From now on, the computer has become a part of life, which is always with us, the paradox of the situation is that at first they won not at all those services that seemed to be beneficiaries.
For example, in cloud gaming, which has appeared relatively recently, the number of players has increased. You don’t need a powerful computer to play any toy at maximum settings, there is support for TVs and mobile devices. But before the pandemic, people played after work, children came home from school when they were left without parental supervision. In isolation, everything changed, the rhythm of life changed. Parents did not allow their children to play at normal times, and the school stretched out for long periods of time. The adults were so tired of the computer that they wanted to switch to something else. At the moment, the number of cloud gaming users has grown, but their use cases have changed. Those who used the services of such services before were lost against the background of newcomers, but the wave quickly subsided. As soon as the voluntary confinement ended, there was a decline in users for any entertainment services – from cloud gaming to online cinemas.
Common sense dictates that all online-oriented services should benefit from isolation, but not everything is so straightforward and obvious. For example, for Netflix and similar platforms, the creation of original content became a problem, which stopped the launch of new shows, limited the possibilities of streaming platforms. Many serials ended in the middle, were not continued (as an example, the same “Billions”). Therefore, we can say that the pandemic for online services was both beneficial and harmful. It is impossible to say unequivocally that it led to an increase in income and had no flaws.
Virtual excursions to other cities have always been a kind of attraction for local guides, advertising their own services. Closed borders made this format the main one, tourists moved to the same Instagram, where they bought tours to other cities. With nostalgia, we looked at the streets, listened to stories and wondered when they could go to other countries themselves and whether they could. At the same time, the demand for domestic tourism increased, which instantly brought down the flow of tourists on the heads of certain regions, exceeding the number of local residents. Prices for almost all services naturally went up. Residents of Russia discovered Baikal, Chukotka, the Caucasus, Kaliningrad, not to mention other traditional destinations, for example, the same Sochi and Krasnodar Territory. Nothing has developed domestic tourism like the closing of borders and the desire to relax, switch from the familiar picture that tires the eye.
Online has become a part of life for everyone, including the elderly. It was extremely difficult to order a pass to leave the house using a push-button telephone, many of them switched to smartphones, and so they stayed on, it turned out to be not as scary as it looked. The distribution of QR codes was not ideal, but the “State Services” was fully revealed, the service showed its suitability for life when the MFC is closed, and you still need to receive certain certificates and services. We are quickly moving into the virtual world, everything is ready for this.
There are also unpleasant moments, people have learned to fire people remotely, without much thought.
What will happen next?
And then there will be a whole series of articles in which we will look at the market of laptops, accessories, e-books, smartphones and other devices, talk about operators and their achievements, as well as the retail market. In each separate article, we will pay attention to the most important thing that happened in the market, how it changed in 2020.
Surprisingly, many people perceive the outgoing year as unusual, and they want it to end sooner. Despite all the problems and irregularities, unusualness, I can say that the year was not so bad as one might expect. We did not cope with the pandemic, but we hope that things will go well. The way of life has changed, but it is impossible to say that now it will always be just this way and nothing else. We turned out to be ready to change our lives and at the same time not experience serious restrictions. Complaints that everything went wrong and not that way are understandable. But you must agree that what is happening cannot be compared with the cataclysms of the past – wars, natural disasters affecting vast areas. At the moment, we got off with a slight fright, and life for many has returned to a measured channel, in any case, people themselves convince themselves of this.
Within the framework of a short article, it is impossible to focus on all the events, therefore, I selected only what describes our 2020, characterizes it as fully as possible and gives a sense of what is happening. Happy next year and don’t miss the other articles in this series.
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