2013 Was a Lost Year for Tech Innovation

All in, 2013 was an embarrassment for the entire tech industry and the engine that powers it—Silicon Valley. Innovation was replaced by financial engineering, mergers and acquisitions, and evasion of regulations. Not a single breakthrough product was unveiled—and for reasons outlined below, Google Glass doesn’t count.If it’s in the nature of progress to move in leaps, there are necessarily lulls in between. Here are all the reasons 2013 was a great big dud for technology as a whole.

Mobile phones stagnated

2013 was the year smartphones became commodities, just like the PCs they supplanted. Even at the high end, Apple and Samsung’s newest flagship phones weren’t big leaps ahead from previous versions. The most that Apple could think to do with the new, faster processor in the iPhone 5S was animate 3D effects that make some users feel ill and a fingerprint sensor that solved a problem that wasn’t exactly pressing. Apple’s new iOS7 mobile operating system, which felt “more like a Microsoft release,” crippled many older iPhones and led to complaints of planned obsolescence.

Samsung’s update to history’s best-selling Android phone, the Galaxy S series, delivered on the technical specifications but continued the line’s “unpleasant, cheap design.” Packed with new features like touch-free gesture control, the phone also has an “easy mode” in recognition that many will want to switch them off, and suffers from an interface that stutters at odd moments despite its powerful electronics. Meanwhile, Google’s mysterious superphone turned out to be the Moto X, which is a nice Android phone but hardly revolutionary.

The one good thing about all this commodification is that smartphones are cheaper than ever—in 2014 they’ll cost as little as $20 in China—just like high-end televisions. Prices for good tablets have similarly collapsed.

Wearables were a letdown

The tone-deaf design of Google’s Glass headset—which to anyone but its user is a head-mounted video camera without the tiny light that all other video cameras have to tell you you’re being filmed—made the device such anathema that one pundit wondered whether he should be ashamed to wear it in public. Sergey Brin’spersonal campaign to make wearing Glass look normal couldn’t hide the fact that Glass is a technology in search of an application—unless that application isinvasions of privacy.

Smart watches were easily the biggest letdown of the year. Despite the fact that nearly every big electronics manufacturer is working on one, the battery and display constraints have stumped designers. Again and again, reviewers have declared existing models unfit for widespread adoption, with both Sony and Samsung unveiling devices that failed to make a compelling case for themselves.

Former giants continued their inglorious decline

Microsoft lost nearly a billion dollars on the Surface RT tablet, which was to be the device that pole-vaulted the company over Apple’s iPad and the dying PC industry. Insiders revealed Microsoft’s ruinous internal culture, fostered under a leader who probably never should have been CEO, leading those same insiders to conclude that the only solution is a breakup of the company.

The outlook wasn’t much better for Intel, not because the company hasn’tcontinued to innovate, but because people don’t need as many of its microprocessors, and the ones they do need are less profitable than ever.

BlackBerry, which investors once thought might be broken into smaller businesses with some latent value, proved to be a near-total loss. And while Hewlett-Packard has put the disastrous acquisitions and rapid-fire leadership changes of recent years behind it, the best that can be said so far is that it’s gracefully managing its own decline.

M&A replaced innovation

Microsoft bought Nokia‘s devices business, which would have been an astonishing turn of events a few years ago, but now felt like a lurch into an unsure future in which Microsoft remains an also-ran in mobile devices. Most big news about Apple was about the company’s tax-avoidance techniques and general failure to deliverany new products of note. (It still isn’t making phablets, though they’ve been hugely successful for other manufacturers.)

Google killed its much-vaunted 20% time—the policy of allowing engineers to spend a portion of their working time on their own projects—while insisting it hadn’t, leading to a furious (and public) debate among its employees about whether or not the company is still friendly to bottom-up innovation.

The arrogance of technology’s ruling class increased

Even as one entrepreneur declared that Silicon Valley should be a separate US state, economists made the case that much of what the internet has accomplished in the past 20 years is the impoverishment of the majority of Americans. While there isn’t much manufacturing left in rich countries to automate, it appears that robot baristas could threaten jobs in the service sector as well. Some in Silicon Valley even made explicit their goal of eliminating workers and their labor protections. And Uber’s CEO alienated customers by insisting that exorbitant “surge pricing” was nothing more than a way to ensure supply at busy times.

Meanwhile, American tech firms flocked to Ireland in order to avoid regulation, while companies like Uber and AirBnB made it apparent that their business model is dependent on avoiding regulations in the states.

Social media became profitable, if not compelling

We became more tired of social media than ever. Twitter filled up with machines. Facebook’s response—to mess with the algorithm that determines what’s in your feed, called Edgerank—made the site less appealing to many.

Facebook did crack the code on how to increase its revenue and boost its share price back to the levels of its 2012 IPO. Unfortunately, those methods includedobnoxious video ads. Twitter’s IPO, meanwhile, suggested that the company will have to follow in Facebook’s wake—more, and more intrusive, advertising—in order to justify its share price.

Media ravenous for stories bought into techno-hype

The value of bitcoin increased at least 10-fold in 2013, thanks to heavy investment—by the media, which helped talk it up. Managing “big data” became the growth plan of companies like IBM, despite the fact that most companies aren’t handling data that’s anywhere close to “big.”

Amazon scored a huge PR coup when its “surprise” announcement of a new drone program gave the company a boost in visibility worth millions, just ahead of thebiggest online shopping day of the year. Amazon competitor FedEx and just about everyone else who knows something about drones maligned the plans as a publicity stunt.

The NSA spying scandal put a chill on the biggest technological shifts of coming years

As more and more revelations emerged from the documents Edward Snowden lifted from the US National Security Agency, observers seemed numbed by the sheer scope and audacity of the agency’s domestic and foreign internet surveillance. The fallout for the tech industry has just begun: US companies must now prove, especially to foreign customers, that the move to cloud-based services, which necessitates sending all their data through the very same communication nodes to which the NSA has access, won’t put all of their secrets in the hands of US spymasters by default.

The effects are already being felt. Cisco blamed a poor quarter on deals in Russia and Brazil soured by fears about the NSA. Cisco also warned that this will affectmany other US firms, and that it threatens the future of the internet of things—fitting, since the implications of a world in which every gadget is a potential mole sure are scary.

And as is the case every year, tech pundits made countless dubious calls for whichthey will never be held to account.