Bitcoin, bikes, bots and more: seven of the biggest tech stories of 2017
From the dizzying ascent of bitcoin, the boom-and-bust cycle of China’s bike-sharing market, and the large bets made on artificial intelligence, here are some of the major technology stories this year.
If there is a common thread that weaves through some of this year’s biggest technology stories, it is the inevitability of change and the disruption that follows.
Bitcoin built up interest in the trading of virtual currencies, which was embraced by start-ups as a way to raise funding from savvy investors without being subject to regulation.
Bike-sharing services quickly caught on in China, where pedal power combined with the efficiency of mobile apps and digital payments to create the country’s hottest transport trend.
News on major hi-tech initiatives in Hong Kong and the mainland were typically dominated by Baidu, Alibaba Group Holding and Tencent Holdings – the Chinese internet triumvirate collectively known under the acronym BAT.
The activities of those three companies continued to grab headlines because of the intersecting spheres of interest they have created in the fields of online search, e-commerce, gaming, social media, financial technology, cloud computing and recently, artificial intelligence (AI).
What follows represent some of the most widely read tech stories in the South China Morning Post this year:
Riding the cryptocurrency wave
While stock markets around the world reached all-time highs this year ahead of the US Federal Reserve’s interest rate increase on December 13, their gains were relatively insignificant compared with the performance of cryptocurrency bitcoin.
The world’s most traded digital money, bitcoin has grown in value from about 39 US cents to more than US$18,000 in just eight years, while doubling over December with US$290 billion in market capitalisation.
Although bitcoin has thrived, concerns linger about a cryptocurrency bubble and potential fallout from unregulated internet coin offerings (ICOs). In September, China’s central bank banned ICOs – fundraising through cryptocurrencies – calling the practice illegal. The People’s Bank of China said that 90 per cent of ICOs launched in the country were found to be fraudulent.
“If things were still the way they were at the beginning of the year, over 80 per cent of the world’s bitcoin trading and ICO financing would take place in China – what would things look like today?” central bank deputy governor Pan Gongsheng said earlier this month. “It’s really quite scary.”
The clampdown, however, has not deterred bitcoin investors who have moved their trading to peer-to-peer exchanges.
So expect usual family dinner topics during the Christmas holidays to be shoved aside, as you or your relatives regale each other with real and virtual profits from cryptocurrency trades.
China’s bike-sharing market had been one of the most popular new sectors for private equity firms, venture capitalists and angel investors. It has attracted more than US$2 billion in funding over a 19-month period. Hellobike earlier this month raised US$350 million from investors led by Ant Financial Services Group, an affiliate of Post owner Alibaba.
Intense competition, however, has whittled down the number of operators even as the people who used mobile apps to rent bikes had reached 106 million by the end of June.
From a peak of about 100 bike-sharing service providers competing across the country, there are now just three major companies with deep-pocketed investors – Mobike, Ofo and Hellobike – that can potentially survive another price war, which have steadily decimated the ranks of these transport start-ups.
The latest issue facing bike-sharing firms what happens to the deposits paid by users to providers that have gone under.
Once dubbed “Uber for bikes”, China’s bike-sharing industry is predicted to be worth 23.68 billion yuan (US$3.6 billion) by 2019, according to iResearch.
Beyond rental revenue and prospects for advertising, bike-sharing providers have helped promote mobile payments and gathered plenty of user data that can be analysed for consumer patterns – giving insight to marketers and businesses.
The long march of AI
At the annual meeting of China’s parliament in March, the usual Communist Party agenda of economic growth, social welfare, jobs, health care and pension made way for an unusual addition: a clarion call by some of China’s most influential business and technology leaders for the government to set policies on AI research and development.
The State Council in July laid out goals to build a world-leading AI market in China that it forecast to be worth US$150 billion by 2030. In his keynote address before the 19th National Congress of the ruling Communist Party in October, Chinese president Xi Jinping reinforced that goal with a call to speed up the integration of AI and other advanced technologies into the country’s economic agenda.
Both the public and private sectors in China are digging deep to create a broad-based platform for AI to help drive the country’s economy, such as using robots and other automation tools in financial services.
The BAT companies have positioned themselves on the front lines of China’s AI plans. Baidu has sharpened its focus on leading the global market for autonomous driving technology, while Alibaba plans to invest US$15 billion over the next three years in AI and other cutting-edge technologies. Tencent has also launched an autonomous driving initiative, while quickly establishing AI research laboratories in China and the US.
Tencent enters elite club
In November, Shenzhen-based Tencent became the first Chinese technology company to top US$500 billion in market value, joining an elite club led by hi-tech industry stalwarts Apple, Alphabet, Facebook and Microsoft.
Shares of the Hong Kong-listed video games-to-social media conglomerate rose 4.12 per cent to close at HK$420 on November 20, which lifted its value to about US$511 billion.
Co-founded by chairman and chief executive Pony Ma Huateng in 1998, Tencent has received plenty of investor support, which resulted in its share price soaring as much as 132 per cent since the start of this year.
Earlier this month, Tencent recorded its biggest decline in 21 months – losing US$55 billion in value in less than two weeks – to quickly exit the US$500 billion tech club. Still, that did not diminish the milestone it achieved.
Live-streaming party over
With regulators tightening controls on online content and a marked decline in the number of viewers, the party could soon be over for the domestic live-streaming video industry.
This sector has seen explosive growth in the past two years, with the number of platforms growing to more than 100, while revenue surged to 20.8 billion yuan in 2016 from just 7.4 billion yuan in 2015, according to iResearch,
Chinese authorities have launched several campaigns to clean up the live-streaming industry, targeting “vulgarity”, “obscenity”, and “wrong life values”.
Meipai, China’s popular short video service operated by Hong Kong-listed mobile video-editing app provider Meitu, has banned minors from using its live-streaming service following a scandal involving primary schoolchildren broadcasting nudity online.
Targeting the iPhone X
The most expensive smartphone Apple has released, the iPhone X has helped the US technology company boost its brand cachet in China, thanks to mainland consumers who are willing to spend more on premium merchandise.
But that has not stopped aggressive Chinese mobile phone brands from challenging Apple, with an eye on climbing up to its lofty perch in the world’s largest smartphone market.
Shenzhen-based Gionee has thrown down the gauntlet to Apple by releasing a family of full-screen smartphones, the cheapest of which sells for a tenth of the price of the iPhone X.
Huawei Technologies, the world’s largest telecommunications equipment supplier and China’s biggest smartphone brand, plans to go a step further and compete against the iPhone in the US.
Singles’ Day bonanza
China easily retained its status as the world’s biggest retail e-commerce market when Alibaba smashed its 24-hour Singles’ Day sales tally from last year, notching up a record total worth US$25.3 billion.
“Nowadays in China, the first greeting isn’t whether you’ve eaten, but how many items do you have in your shopping cart,” said Joseph Tsai Chung-hsin, the executive vice-chairman of Alibaba.