Tech in the time of Trump
#whathavewedone
One of the great ironies of last week’s US election result was felt in Silicon Valley. Some of the Californian liberals most disappointed by the success of The Donald were employees and executives of the very social media platforms that had been so instrumental in the spread of unedited but persuasive messages to millions of disgruntled Americans.
But beyond the echo chambers of Twitter and Facebook it’s worth reflecting on the potential impact of a Trump presidency on the broader technology industry. How will brands and businesses that have grown up in an age of globalisation fare if a more protectionist environment is introduced?
Telephones, TVs and tariffs
In the sphere of mobile devices, consumers from Boston to Bangkok have become used to choices that reflect the few global players in the game. Today’s buyer chooses between America (Apple, Microsoft and now Google), South Korea (Samsung and LG), Japan (Sony) and China (Huawei). Fallen stars of the industry include BlackBerry (Canada) and Nokia (Finland). Tariffs imposed here will not be like those on imported steel or meat. Rather, consumer choices will be very visibly limited or distorted and the consequences on sales, brands and consumer sentiment may be extreme.
The television category is even more concentrated: almost exclusively around a few Korean and Japanese brands. However great the desire to rebuild the local manufacturing base, it’s hard to see US consumers getting a home-grown option any time soon. In a market where many have already made the move to larger internet-connected LEDs with UHD capabilities, TV upgrade is an increasingly discretionary choice. Tariffs here, and associated higher prices in store, will probably just result in slower growth.
And what of the technology brands caught in the cross-fire? Apple’s business is built for a globalised economy with headquarters in Cupertino, production in China and a cash mountain in Ireland. Could their consumers in the UK, for example – already hit with higher prices driven by the declining pound – swallow further increases brought about by a tariff regime? With the brand already losing its sheen as the undisputed industry leader, might this be the beginning of the end for Apple as the must-have marque?
Will the tech giants manage to elude the downside of the trade environment that Trump seems to propose? Is this an industry whose DNA is so intertwined with a globalised world that turning back the clock just won’t work?
Turn on, tune in, drop out
As uncertainty clouds the horizon, where should we look for a silver lining?
One place might be virtual reality. All our recent research for clients in this space has struggled to define compelling use cases. Maybe Trump has provided us with the perfect one: Pull on your VR headset, switch on and let the troubles of the real world slip away…
How will your brand and its competitors cope in a changing and uncertain world? We’d love to hear from you.
