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Closing the books on tech’s deceptively good year

Dec 25 2018 16:31
Brad Stone

Through the use of technology, entrepreneurs are able to communicate directly with funders and potential clients. (Photo: Shutterstock)

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The year 2018 will likely be remembered in Silicon Valley and across the tech industry for its attendant controversies: awkward congressional testimony, the first driverless car death, global tensions that forced the sector to balkanize and the privacy scandals that dogged the largest social network in the world.

But tech’s no-good very-bad year was by some measures deceptively good.

Consider: Those little voice-activated smart speakers that once seemed like amusing novelties are now everywhere. In 2016, about 16 million people posed queries to Alexa speakers and their ilk. Next year, according to eMarketer, that number will surpass 74 million—more than one quarter of U.S adults.

Last year, around 40 million people sent money to friends and paid bills via payment apps like PayPal, Venmo and Square’s Cash App. This year there are around 50 million monthly active users, according to Bloomberg Intelligence.

Intel Corp. had one of the worst years in its corporate history, losing both its CEO to scandal and its title as the world’s largest chipmaker, to rival Samsung Electronics Co. But companies are still buying as many server chips as it can make. Intel’s sales will top $70 billion this year, notching a record, while profits will top $20 billion for the first time ever.

In China, the newly public e-commerce services company Meituan Dianping is changing the restaurant landscape. Its users now use their smartphones to get 20 million deliveries a day. Last year, that was 13 million.

Another company we had barely heard of a year ago, Bytedance Ltd., has more than 500 million monthly active users for its short video app, Tik Tok. It was recently valued at $75 billion, up from $20 billion last year, making it one of the most valuable private companies in the world. Yes, the private market for growing tech companies was still hawkish, thanks in large part to the largesse of Bytedance’s main backer, SoftBank.

Even in the public markets, things weren’t that bad for tech. Facebook was the biggest drag on the S&P 500, but Microsoft and Amazon, at least of this writing, were its biggest lifts.

And while Facebook Inc.’s struggles are now legendary, it revealed for the first time that 2.5 billion people use its products globally—including more than 1 billion each on WhatsApp, Instagram and Facebook Messenger.

So here’s a parting thought as 2018 departs. Tech’s scandals are unlikely to go away next year. We will still be fiercely furrowing our brows over whether big tech is too big and powerful. But all these concerns and controversies remain just the undertow on a giant wave—of technology spreading into our personal and work lives, boosting the companies and entrepreneurs who make the right bet at the right time. That, at least, didn’t change at all this year.

This article also ran in Bloomberg Technology’s Fully Charged newsletter. Sign up here.

And here’s what you need to know in global technology news

JD.com averted a crisis. On Friday, authorities announced that the company's CEO, Richard Liu, would not be charged in connection with a rape investigation in Minneapolis.

Facebook is developing a cryptocurrency for WhatsApp. The company is creating a stablecoin, and plans to focus first on the remittances market in India. In other Facebook news, the Wall Street Journal examined conservative Joel Kaplan’s powerful position at the company.

The global drone industry fears retribution after two illegal drones buzzed around London’s Gatwick airport for nearly 24 hours, disrupting travel for about 120,000 people.  

Tech behemoth Huawei is mounting an unusual charm offensive, including releasing a 700-word diary entry titled “There Is Always Good in People!” penned by its CFO Meng Wanzhou, who was detained in Canada earlier this year.

silicon valley  |  tech  |  technology
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