Living on the Edge

By January 25, 2019 Weekly TGIF

The rollout of the next generation of wireless networks, called 5G, is coming this year. The 5G launch is expected to kick start the next stage of the “internet of things.” Devices are going to be faster. Artificial intelligence will explode. How fast you might ask? 5G is expected to be anywhere from 20-100 times faster than the current 4G networks. Downloading a feature-length movie will take less than 20 seconds. That compares to roughly 6 minutes in 4G and nearly 2 hours in 3G.

Chances are, you’re reading this on a 4G phone. The 4G network came out in 2010. 3G was rolled out essentially with the original iPhone at the end of 2007. The 5G rollout is expected to work alongside the existing 3G and 4G networks until full adoption.

Over 5 Billion new devices are expected to connect to the internet this year. Refrigerators, toasters and washing machines will access the web. Over 200 Billion app downloads are expected which should increase mobile based marketplace models for services. China is leading the way here, primarily because of its growing app economy. India is making strides too.

The controversial Chinese company Huawei is a big player in 5G. But its role and alleged agenda have triggered alarm bells for spying and theft. The list of countries calling foul is growing, well beyond the United States. China wants to dominate the Digital Age. 5G is their path of choice. The consequences are massive. The Trade War between the US and China is much more than tariffs. Security and intellectual property is a generational issue. This will be front and center for years, if not decades to come. It could feel like a Cold War in the Digital Age.

AT&T and Verizon are hustling to build out their 5G networks. Samsung and Motorola expect to have a phone in circulation this year. Apple will not. The 5G iPhone is expected in 2020. Blockchain will evolve and likely transform digital payment systems and smart contracts in 5G.

Here comes the Edge. It’s the next stage of the Cloud, and it’s local. Most of the new opportunities for the cloud are believed lie at the “edge.” The Edge is defined as computing which is done at or near the source of the data. This removes the necessity of relying on the cloud at one of the major data centers to do all the work. It doesn’t mean the cloud will disappear. It basically means the cloud is coming to us.

Amazon is believed to be looking to develop its own Artificial Intelligence chips for its Echo device, otherwise known as Alexa. The more processing Amazon can do on a local Alexa, the less it has to rely on the cloud. That means you get quicker replies. It also means Amazon’s server costs are less expensive. A big kicker is, if enough of the work is done locally you could end up with enhanced privacy.

An iPhone is another example of edge computing. Apple’s operating system is a closed network, unlike Google’s Android system which is open architecture. The security and privacy features of an iPhone are well accepted by its customer base. By doing encryption and storing biometric information on the device, Apple offloads a ton of security concerns from the centralized cloud to its vast customer devices. Your password or face provide the security. Apple playfully says, “what happens on your iPhone, stays on your iPhone.”

The launch of the iPhone in 2007 was a game changer for the Digital Revolution. It set up a new age of innovation and Tech Titans, much like the Industrial Revolution a century ago. 5G and Edge computing are the next stage of this powerful movement. Both the US and China have their eyes on the prize. The speed of innovation is spectacular these days. It just doesn’t seem that long ago when microwave ovens hit stores. Remember when phones were phones, there were busy signals and you left messages on answering machines not knowing when a call would be returned? My kids can’t believe when I was their age, there were just 13 channels on television and you had to get up every time to change the channel. It was also a time when Sony and Japan dominated consumer electronics. Times do change. Staying ahead and improving is critical. We are living on the edge of innovation in this Digital Revolution. It’s all very investable.

Have a nice weekend. We’ll be back, dark and early on Monday.

Mike

The BFIC Hat Travels On

The Bedell Frazier Traveling Hat continued on this week to Jerusalem, adding another incredible stop to a long list of amazing adventures. Where it will go next? Who knows?

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