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COVID-19: Winners and Losers in Technology and Artificial Intelligence Sectors

by Mohamedai2020
COVID-19- Winners and Losers in Technology and Artificial Intelligence Sectors

By: Dr. Mohamed Abdulzaher
Academic & Artificial Intelligence Journalism Pioneer

COVID-19 pandemic has reshaped the technological world leaving some big winners and losers in technology and artificial intelligence sectors.

Dr. Mohamed Abdulzaher

Who are the Winners and Losers in Post-Covid-19 World?

Do you remember how many times you used Zoom meeting programme before December 2019? Also, how much did you pay per month for video on demand services and movies before December 2019? And, how many times did you use Microsoft Teams before the beginning of 2020?

Many tools and technologies which suddenly popped up during COVID-19 pandemic were being used in home streaming during the world lockdown, and the world still remains heavily dependent on those tools, even after the gradual opening for business and economic activities.

Some of the big tech companies were in the right place at the right time in full COVID-19 lockdown, while others have seen the real-world trade they rely on, shut down completely.
Consequently, Coronavirus pandemic will have many winners and losers, but it already has one clear winner: the Smart big tech. where the  large digital platforms, including Alphabet and Facebook, will come out of the crisis even stronger.

Top Winners

1- Video-Conferencing Platforms

Video conferencing programmes and platforms technologies have become the fastest and safest solution to curb the spread of COVID-19 epidemic. Where schools, universities, companies, and governments have relied heavily on these technologies and tools.
For instance, the big players in Video-Conferencing such as Zoom, Google, Skype, Facebook, they are the winners .

COVID-19: Winners and Losers
Zoom Video Conferencing

The pandemic is also likely to accelerate digital transformations and investments in new technology as those companies that do not have this as part of their strategy are likely to suffer competitively. This is not just in terms of productivity efficiencies, but also in enterprises getting closer to their customers through insights and analytics to generate growth. We are also likely to see an acceleration in the adoption of artificial intelligence, analytics, customer behaviour services, video conferencing and distributed workflow. (Sanlam WealthSmiths Report).

The big winners and players getting affected in the market include 8×8, Inc., Cisco Systems, Inc., Google LLC, Lifesize, Inc., LogMeIn, Inc., Microsoft Corp., RingCentral, Inc., StarLeaf Ltd., Zoho Corp. Pvt. Ltd., Zoom Video Communications, Inc., and so other. These companies are envisaging the pandemic situation as a key to increase their growth and at the same time helping people  during the crisis.

The market players are offering their services for free or at minimal cost to the enterprises and government organizations. For instance, in March 2020, Zoom Video Communications, Inc., a California-based remote conferencing services company, has announced the free access to video conferencing tools for K-12 schools during COVID-19 crisis. Moreover, the company’s stock prices have increased with the last few months as the investors are as certain that the virus could possibly boost the demand for Zoom’s video conferencing products, according to Research and Markets report (April 2020).

2- Media and Content

Global demands of content and Video on demand (VOD) services have been increased due to Covid-19 global lockdown, where the main content streaming players gain billions of dollars.

Video on Demand Providers
Video on Demand Providers

For instance, streaming websites such as YouTube, Netflix, and increasingly DIY video website TikTok have seen a huge rise in usage in recent weeks, likely because more people are at home finding new ways to keep busy and entertained.

As millions of people go online for entertainment and more, total internet hits have surged by between 50% and 70%, according to preliminary statistics. Streaming has also jumped by at least 12%, estimates show.

The world has recorded a big jump  in the number of mobile devices, internet connectivity and digital media players or content providers , where the world’s population is under lockdown in COVID-19 crisis, which facilitated  access to music and video content going forward for consumers, which thereby increased the growth of the content streaming market in the forecast period.

The global content streaming market is expected to grow from $24.8 billion in 2019 to about $50.3 billion in 2020 as people are staying at home for self-quarantine or due to lockdown resulting in a huge surge in subscriptions to audio and video content streaming services. The market is expected to stabilize and reach $34.1 billion at a CAGR of 8.3% through 2023. North America was the largest region in the content streaming market in 2019.

Major winners and  players in the content streaming market are Netflix, Amazon Web Services, Akamai Technologies Inc, Hulu LLC, Apple Inc, Google LLC, Cisco Systems Inc, Walt Disney Company (Hulu), Kaltura, Inc, and AT&T Inc., according to Research and Markets report (May 2020).[1]

3- Video Gaming Providers  

The Video Gaming industry has gained growth this year, as hundreds of millions of people, who were working and staying at home due to the spread of Covid-19.

The gaming industry has seen sales hit records in the last few months, as millions of people turn to their entertainment and gaming services.

According to BBC, two of the biggest names in video gaming have seen demand jump as virus lockdowns force people to stay at home. The makers of popular games Call of Duty (CoD) and Fifa say player numbers have soared during the pandemic. That’s boosted the financial performance at Activision Blizzard and Electronic Arts for the first three months of this year.

Activision Blizzard, the company behind the CoD series, said an average of 407 million people had played its games online each month in the first quarter of this year.

Meanwhile, the latest CoD game ‘Warzone’ has racked up more than 60 million players since its launch in March, according to BBC research.

Electronic Arts company  said its net income had doubled to $418m on revenue that rose to $1.4bn in the first three months of the year.

Industry giants ranging from Microsoft to Steam have all reported major increases in user numbers, with US video game sales hitting the highest level in over a decade in March.

4- AI and Smart Manufacturers

As COVID-19 has spread, the world has relied on  many technological tools, solutions and artificial intelligence in different sectors:  health care, education, laboratories, hospitals, shopping malls, even in monitoring of streets, airports, and cities during the lockdown.

Artificial intelligence has immensely valuable in helping governments, companies and people adapt to COVID-19 daily issues.

 For instance, the advanced robots have handled operation of factories and other facilities, in more locations and with little added cost, even monitoring streets during the lockdown. 

Also, the 3D printing helped to create new effective masks for coronavirus, and isolation wards for coronavirus medical staff, and patients. Artificial intelligence platforms  helped companies better simulate live work environments and create on-demand labor forces.

The global smart manufacturing market size would grow from USD 181.3 billion in 2020 and projected to reach USD 220.4  billion by 2025, at a CAGR of 4.0%. The estimation for 2020 is down by ~16% as compared to pre-COVID-19 evaluation.

In addition, Factors that drive the growth of the smart manufacturing market include the increasing demand for smart manufacturing products & solution propelled by COVID-19, the importance of digital twin in maintaining operations within the manufacturing ecosystem, and the emerging & expanding role of collaborative robots in healthcare and manufacturing sectors. (Markets and Markets report).

Some of the leading companies in the smart manufacturing market will be the winners, include 3D Systems (US), CISCO (US), Emerson Electric (US), General Electric (US), Honeywell (US), IBM (Europe), Mitsubishi Corporation (Japan), Schneider (Europe), Siemens (Europe), Oracle (US), SAP (Europe), Yokogawa (Japan), and Stratasys (US).

Top Losers

  • Losing companies in the technology industry, those had a decline in using their products and tools because of lockdown and the spread of the Covid-19.

    Meanwhile, many sectors have been affected by the Coronavirus pandemic, especially the travel, tourism, hotel and public services sectors.

    As the COVID-19 pandemic continues, more and more sectors of the economy are feeling the strain. This is reflected in the  technology companies, solutions and tools that serve and contribute to facilitating business in those sectors, and thus the technology companies that share direct revenues from those sectors, where they will gain many losses as well.

1- Tech Middlemen Companies

Middleman companies are working as a provider that facilitates the business relationship between a buyer and a seller, such as: Yelp and AirBnB

For example, AirBnB relies on people paying fees when they stay with ordinary people. And the company has dismissed a quarter of its staff, about 1,900 people. Also, Yelp company has cut a third of its workforce, just a few weeks into the crisis, after restaurants and bars shut their doors.

COVID-19: Winners and Losers
Airbnb, an American online marketplace company

2- Advertising Industry Technologies

The Covid-19 pandemic has hit the global advertising industry, as the big Advertising players have slashed marketing budgets amid deteriorating economic conditions. Advertising industry has faced many problems after a huge nosedive in global consumer spending, and the cancellation of many events and conferences all over the world.

According to Statista numbers, the advertising industry is looking at a $26 billion loss in revenue as of early March 2020 due to the coronavirus outbreak. That’s a 10% decline in revenue and a huge impact on U.S. ad spend. Ad spend declines up to 50% across all channels.  Traditional out-of-home advertising has 51% ad spend decline in March/April. Digital media is hanging around 40%, while the best estimates go to social media and paid search, with 33% and 30% decline, respectively.

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