Wednesday, December 28, 2005

Tim Bajarin: Predictions for the New Year

Tim Bajarin at Creative Strategies pens his predictions for 2006 at Technology Pundits. Below are his mobile-related ones:

  • There will be a Stronger Focus on the “Connected Consumer
In last year’s predictions column, I suggested that there would be a strong emphasis on the digital living room, and as you know, this has been a big issue over the last 12 months. All of the big PC and CE players have taken aim at the home and especially the digital living room and the cable and telecom companies have also made this a major battlefront in their quest to deliver new products and services for the networked home of the future. However, I now see a bit of a shift in thinking from all of the major players in these key industries from the digital home to instead, the connected digital consumer. Don’t get me wrong here. The battle for control of the digital living room is far from over, but it has dawned on a lot of the players that perhaps the biggest prize is not the ownership of the digital living room but instead, ownership of the “connected consumer."

Apple already has a major position here and ironically, will use this “connected consumer” via the iPod to give them a solid place in the living room at some point.
But 2006 will see a real move towards exploring what it means when a consumer can be connected at all times to information, services and personal content and we will begin seeing a lot of discussion around this issue heat up in 2006.

  • Smart Phones gain larger percent of market
One trend in 2006 is that even low cost cell phones will get smarter. However, I also believe that what we define as true smart phones will become a larger part of the market for cell phones in the next few years. In fact, my recent forecast is that by 2010, 15-17% of all cell phones sold WW will be what is defined as smart phones. I realize that a smart phone definition today is all over the map, but in my description, these are phones that have at least a 2 inch screen and can handle email, full web browsing and have an OS included that supports third party software and applications. Although plain cell phones that strictly do voice, pictures and perhaps even simple instant messaging will have the lion’s share of this market, I believe demand for products like Palm’s Treo, Rim’s Blackberry and Microsoft Windows Mobile platform, as well as smart phones that will be Linux and Symbian based will become a larger mix of phones sold over the next five years.

  • Podcasts and Audio Blogs add Video
I have become a real fan of audio blogs or podcasts and next year video blogs will gain some strength. Of course, it took Apple’s addition of Podcasts to iTunes to really kick start audio blogs and this has enticed many to create not only audio but video blogs as well. Of the few video blogs available today, Rocketboom and HIT stand out as being well done, but I have seen some semi-professional VLOGS that are in the works and they should debut in Q 1 of 2006. I also expect to see some of these audio and video blogs move to a subscription model to help defray costs and some may even get advertisers to back them as well. But expect 2006 to see a plethora of VLOGS coming to iTunes and other music stores and gain some serious followers in the coming year.

  • Mobile and Wireless
This is an area that will see continued growth in 2006. New innovative mobile phones are headed for the market and more and more people around the world will buy cell phones. Current estimates are that 800 million cell phones will be sold next year and well over 1 billion will be sold by 2010. And laptop sales will continue to be strong. By late 2004, laptops surpassed desktops in total YTY sales and we see this trend continuing. The addition of new dual core laptops will help fuel even stronger growth in portable computers in 2006 and although ultralights represent the smallest category of laptops sold, new wide screen ultraportables with DVD drives in them could push demand for these smaller and lighter mobile computers in the coming year.

  • The Tech Economy Stays Hot
2006 should be a very good year for the Tech Economy. With Vista pushing demand for more powerful systems and laptops gaining more popularity, PC sales should see at least 7-9% growth in the New Year. At the same time, we see strong demand for digital cameras, HD televisions, VOIP related products and mobile audio/video players. Altogether, they should keep the tech economy humming in 2006.

  • Apple Starts Official Trek towards Becoming a Powerful Consumer Electronic Company
Although Apple is still a computer company, their success of the iPod has shown that they can be potentially stronger as a CE vendor. But they have an interesting dynamic that will make them the only PC Company who I think can transition into a powerful CE company as well. Apple’s edge is that they not only have PC and CE devices, but they also have the content tied directly to these products and in essence are creating a total ecosystem where all are linked together easily and seamlessly into a single solution. I fully expect Apple to extend their reach into the living room at some time in 2006 and by the end of the New Year we should have a real strong understanding of how Apple plans to “own” the digital home of the future. My best guess is that Apple will lay out a more detailed plan for their approach to the digital home at their next developer’s conference mid year.