In less than a decade, Tel Aviv has become the second biggest start-up hub in the world. Now it’s poised to take on Silicon Valley in the quest for the next big thing in high-tech, writes ARTHUR GOLDSTUCK.
The line-up at last week’s Digital-Life-Design (DLD) innovation festival in Tel Aviv was as astonishing as the high-tech explosion that has placed the city at the epicentre of the information revolution.
The inventor of the USB flash drive, the founder of global navigation app Waze, and a former president of Israel who won the Nobel Prize and helped inspire the electric vehicle revolution all shared their visions of the next big thing.
But it was Steffi Czerny, who founded DLD in Germany, who offered the overriding perspective on the significance of the event: “If you want to see what’s next, come to Israel,” she told an audience that included delegates from several dozen countries.
The event attracts start-up entrepreneurs, high-tech giants like Intel and Microsoft, and government trade representatives from countries like France and the Netherlands. Two start-ups from South Africa, WhereIsMyTransport and Funda, were there as regional winners of a global startup contest.
All delegates were alert for either the next big investment opportunity or the next big thing in technology. Most of all, they were on the outlook for the technology that will shape the future.
As a result, it is not only the new ideas and apps that make an impact at DLD, but also the ideas that will shape the future. Ironically, many of these ideas come from arguably the oldest man at the event: 91-year-old former Israeli president Shimon Peres, a Nobel Peace Prize laureate and one of the main drivers of Israeli investment in research and development for the past 50 years. His passion for electric vehicles has been an inspiration for research into battery technology and the electric grid.
His thoughts on what it takes to predict the future in themselves help to understand what will be important in the future: “We can predict things up to a point,” he told the audience. “To do that we need maximum information. And for that we need a combination of a human being with imagination, and infinite patience.”
Asked to make three predictions for the next big area of technology breakthrough, he had no hesitation: “The first domain will be about medicine. The second will be about sharing; instead of having our own houses and car, we will share most things, as we do with shared rides and accommodation today. It will change our assumptions of capitalism. Then I can see a third change that is particularly important: robotics.”
He struck a cautionary note, however, warning against an obsession with technology for its own sake.
“We invest so much in robotics that is not being invested in human beings. The human being produces thoughts, which means the human being is superior to the robot. Why make a better robot instead of a better human being?”
His conclusion: “The human being has a long way to go.”
Not that there was a shortage of start-ups and established companies trying to show the way. Tel Aviv has the distinction of having more startups per capita than any economic hub in the world outside Silicon Valley. Of around 3400 startups in Israel, 972 are in Tel Aviv. With 40 per cent growth in number of tech startups since 2012, some suggest it may even overtake Silicon Valley.
The city also hosts 49 research and development centres for multinational organisations like Google and Facebook, and 58 co-working spaces and startup accelerators.
Those may sound like mere numbers, but they add up to an equation that begins to explain Israel’s impact on the high-tech world. One of the smallest yet most revolutionary technologies originating there, the USB flash drive, was invented by Dov Moran and his company, M-Systems. It’s $1,6bn sale to SanDisk in 2006 still ranks as one of the biggest ever acquisitions of an Israeli high-tech company
“It’s about opportunity,” Moran said in a panel discussion at DLD. “It grows and grows and grows, and every success brings us new entrepreneurs who then know what to do next.”
He, too, offered a forecast for the next huge thing or two: “The industry of self-driven cars, and the effect of genome research on health, are going to change the world.”
A slightly different perspective came from Shahar Waiser, founder and CEO of Israel’s answer to Uber, a taxi app called Gett that is now also available in New York, London and Moscow. Revenue has been growing at 300 per cent a year for the past three years, and it is likely to be one of the next “unicorns” – startups with a valuation of $1-billion a year.
The one area where we won’t see a unicorn, said Waiser, was telecommunications. Quite simply, the big unicorns like WhatsApp and Facebook have cut short the meteoric growth in profits we once saw from telcos.
But it goes beyond just the industry sector, he said: “It’s very difficult if take something with both a digital and offline component and scale it. There is no company with a telecommunications component, where it has more than $100-million in revenues, that keeps growing at the kind of 300 per cent growth we are seeing.
“Food research is one area where we may see unicorns emerge. Transportation is another.”
In short, sectors that address urgent human needs.
And it means that, from food to medicine to the sharing economy, the DLD festival put several signposts on the roadmap to a future that will confirm one of the oldest rules of innovation: “Necessity is the mother of invention.”
Rain, Telkom Mobile, lead in affordable data
A new report by the telecoms regulator in South Africa reveal the true consumer champions in mobile data costs
The latest bi-annual tariff analysis report produced by the Independent Communications Authority of South Africa (ICASA) reveals that Telkom Mobile data costs for bundles are two-thirds lower than those of Vodacom and MTN. On the other hand, Rain is half the price again of Telkom.
The report focuses on the 163 tariff notifications lodged with ICASA during the period 1 July 2018 to 31 December 2018.
“It seeks to ensure that there is retail price transparency within the electronic communications sector, the purpose of which is to enable consumers to make an informed choice, in terms of tariff plan preferences and/or preferred service providers based on their different offerings,” said Icasa.
ICASA says it observed the competitiveness between licensees in terms of the number of promotions that were on offer in the market, with 31 promotions launched during the period.
The report shows that MTN and Vodacom charge the same prices for a 1GB and a 3GB data bundle at R149 and R299 respectively. On the other hand, Telkom Mobile charges (for similar-sized data bundles) R100 (1GB) and R201 (3GB). Cell C discontinued its 1GB bundle, which was replaced with a 1.5GB bundle offered at the same price as the replaced 1GB data bundle at R149.
Rain’s “One Plan Package” prepaid mobile data offering of R50 for a 1GB bundle remains the most affordable when compared to the offers from other MNOs (Mobile Network Operators) and MVNOs (Mobile Virtual Network Operators).
“This development should have a positive impact on customers’ pockets as they are paying less compared to similar data bundles and increases choice,” said Icasa.
The report also revealed that the cost of out-of-bundle data had halved at both MTN and Vodacom, from 99c per Megabyte a year ago to 49c per Megabyte in the first quarter of this year. This was still two thirds more expensive than Telkom Mobile, which has charged 29c per Megabyte throughout this period (see graph below).
Meanwhile, from having positioned itself as consumer champion in recent years, Cell C has fallen on hard times, image-wise: it is by far the most expensive mobile network for out-of-bundle data, at R1.10 per Megabyte. Its prices have not budged in the past year.
The report highlights the disparities between the haves and have-nots in the dramatically plummeting cost of data per Megabyte as one buys bigger and bigger bundles on a 30-day basis (see graph below).
For 20 Gigabyte bundles, all mobile operators are in effect charging 4c per Megabyte. Only at that level do costs come in at under Rain’s standard tariffs regardless of use.
Qualcomm wins 5G as Apple and Intel cave in
A flurry of announcements from three major tech players ushered in a new mobile chip landscape, wrItes ARTHUR GOLDSTUCK
Last week’s shock announcement by Intel that it was canning its 5G modem business leaves the American market wide open to Qualcomm, in the wake of the latter winning a bruising patent war with Apple.
Intel Corporation announced its intention to “exit the 5G smartphone modem business and complete an assessment of the opportunities for 4G and 5G modems in PCs, internet of things devices and other data-centric devices”.
Intel said it would also continue to invest in its 5G network infrastructure business, sharpening its focus on a market expected to be dominated by Huawei, Nokia and Ericsson.
Intel said it would continue to meet current customer commitments for its existing 4G smartphone modem product line, but did not expect to launch 5G modem products in the smartphone space, including those originally planned for launches in 2020. In other words, it would no longer be supplying chips for iPhones and iPads in competition with Qualcomm.
“We are very excited about the opportunity in 5G and the ‘cloudification’ of the network, but in the smartphone modem business it has become apparent that there is no clear path to profitability and positive returns,” said Intel CEO Bob Swan. “5G continues to be a strategic priority across Intel, and our team has developed a valuable portfolio of wireless products and intellectual property. We are assessing our options to realise the value we have created, including the opportunities in a wide variety of data-centric platforms and devices in a 5G world.”
The news came immediately after Qualcomm and Apple issued a joint announced of an agreement to dismiss all litigation between the two companies worldwide. The settlement includes a payment from Apple to Qualcomm, along with a six-year license agreement, and a multiyear chipset supply agreement.
Apple had previously accused Qualcomm of abusing its dominant position in modem chips for smartphones and charging excessive license fees. It ordered its contract manufacturers, first, to stop paying Qualcomm for the chips, and then to stop using the chips altogether, turning instead to Intel.
With Apple paying up and Intel pulling out, Qualcomm is suddenly in the pound seats. It shares hit their highest levels in five years after the announcements.
Qualcomm said in a statement: “As we lead the world to 5G, we envision this next big change in cellular technology spurring a new era of intelligent, connected devices and enabling new opportunities in connected cars, remote delivery of health care services, and the IoT — including smart cities, smart homes, and wearables. Qualcomm Incorporated includes our licensing business, QTL, and the vast majority of our patent portfolio.”
Meanwhile, Strategy Analytics released a report on the same day that showed Ericsson, Huawei and Nokia will lead the market in core 5G infrastructure, namely Radio Access Network (RAN) equipment, by 2023 as the 5G market takes off. Huawei is expected to have the edge as a result of the vast scale of the early 5G market in China and its long term steady investment in R&D. According to a report entitled “Comparison and 2023 5G Global Market Potential for leading 5G RAN Vendors – Ericsson, Huawei and Nokia”, two outliers, Samsung and ZTE, are expected to expand their global presence alongside emerging vendors as competition heats up.