Dominic Yang
Word count: 1165 PIN: 10601
Finding the Next Wave to Ride The Digital Industry in a Changing World
Dominic Yang
This essay defines a trend as the tendency of the majority of consumers to shift their preferences in favor of certain new products, or for businesses to shift the conduct of their affairs in line with innovative new practices and technologies. While businesses often are forced to react to trends, they should not simply reproduce the specific product or practice that defines a trend, but rather should continue to innovate. Several trends have found expression in recent business developments, and continue to drive innovation. Among these, this essay will focus specifically on trends in the digital industry: the content, skills, and services that attempt to integrate and deliver text, images, audio, and video in a digital format. Digital industries include, among others, telecommunications (text messages in cell phone), computer-based game applications, digital multimedia products (playing TV or music on computers), digital publishing (e-book), and online learning. One major trend affecting digital industries is that they produce merchandise that serve multiple purposes. Ten years ago, people would not have expected to be able to watch TV shows on their cell phones, but recently have come to expect such devices to be capable of integrating various services. For example, today’s video game consoles, such as the Xbox, do much more than simply allow gamers to play cartridge- or discbased games; they now also allow individuals to connect to the internet, where players can download music, play games with their friends online, and communicate with other players. Some systems even double as DVD players. In these and other ways, digital
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Dominic Yang
industries are attempting to maximize the capabilities of their products to suit the evolving technological preferences of their customers. The importance of meeting the needs of potential customers has also led the industry to increase their efforts to engineer products that are compatible with a wide array of other popular technological products and systems. The iPhone is perhaps the most outstanding example of this trend. After the iPhone became popular, many companies began to develop internet-related products that could integrate with that item. For example, Blackboard is one of the major online learning companies in the United States, allowing, among other things, for educators and students to access information pertaining to their academic courses. In light of the popularity of mobile devices, Blackboard has arranged for iPhone users to receive notifications of important information, such as grade changes, whereas students would previously have received this information through their regular e-mail providers. Many internet applications demonstrate the direction of moving from information exchange toward an emphasis on social interaction in today’s society. For example, the number of active users of the popular social networking site, Facebook, has exploded from 120 million in October 2008 to over 175 million as of February 2009. This trend has been aided by the broadened base of interest. Social networking has become popular for a diverse array of age groups; according to statistics provided by Facebook, more than half of its users are now 30 years old or older. The widespread social networking phenomenon has further influenced the consuming behavior of the public. For instance, many people tend to draw upon internet expressions of popular public opinion as guides to their own potential consumption preferences, such as when an individual seeks out reviews of
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Global Initiatives Symposium in Taiwan 2009
products or services posted by other consumers. As a result of the increased availability of such word-of-mouth publicity, businesses should be more concerned than ever about providing efficient services and useful, popular products. The popularity of social networking sites has lead to the widespread proliferation of social networking applications. Users can sign up for applications that offer everything from a “word of the day” to up-to-the-minute stock quotes. One may thus anticipate that more products will emerge that will take advantage of this application craze and to maximize their marketability. These applications come with risks, however. Despite the attraction of social interactive features, many current applications require individuals to release personal information that would otherwise not be available to the public. Thus, while attempting to create a greater sense of community among consumers and ease interpersonal communication, companies are inadvertently creating an environment conducive to identity theft. Facebook applications have already come under fire as potential risks because they are created by third-party developers, some of which actively seek to steal personal information. In allowing iPhone users to utilize Facebook applications, it remains unclear as to whether such risks have been removed, or if these businesses are perpetuating the problem for the sake of market success. Recent developments have shown that the integration of services represents but one component of mobile services’ rise to prominence as one of the major factors driving growth in digital industries, a trend that will see significant growth through the next decade. One indicator of this is the fact that the number of cell phone users has dramatically increased over the past five years. According to a recent United Nations report, 46% of the world’s population owns a cell phone, with China, by far the largest
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Find the Next Wave to Ride On - New Business Strategies in the Changing World
Dominic Yang
world cell phone market, having more than 600 million subscribers as of mid-2008. Although most mobile broadband subscribers may be found in industrialized regions, many developing nations, especially Indonesia and the Philippines, have started third generation (3G) networks. Also, the Asia-Pacific region’s continued development of its broadband market – the largest in the world – is likely to further increase the demand for, and production of, higher quality digital content and equipment. In addition, the digital era has increased the number of competing businesses by equalizing access to the market and making effective business strategies more affordable. In the global market of previous decades, only large companies were capable of opening branches, subsidiaries, and factories in foreign countries. This granted to these corporations advantages which smaller businesses simply did not have. Namely, the latter have the ability neither to produce in countries with more favorable tax policies nor to produce and sell goods in the target markets, thereby avoiding export costs. Recent developments in technology and communication, however, now allow small- and midsized companies to conduct business abroad both conveniently and affordably. Ecommerce has decreased the cost of managing a far-flung enterprise while enhancing the ease with which businesses can access the global pool of potential consumers. In addition, other factors which determine the success of digital industries will depend on the extent to which companies continue to improve upon their current products. Due to the continuing rapid evolution and development of consumer technologies, customers have increasingly higher expectations of what their products should or must provide to meet their needs. However, as normally happens with a trend, many digital businesses hopping on the bandwagon decide to produce products that mirror the popular
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items of the day and that share similar features. In order to attract more consumers, future digital products need to continue to innovate, providing new special features and, thus, increasing their competitiveness. Moreover, successful digital products must be compatible with an increasing number of other systems and products.
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Find the Next Wave to Ride On - New Business Strategies in the Changing World
Dominic Yang
Global Initiatives Symposium in Taiwan 2009