Each year at this time, all of us at Pundits are asked for our predictions for the New Year. This marks my 25th year at Creative Strategies and my predictions below also mark my 25th year at sharing my views about the coming New Year.
Here are my predictions for 2006
1- 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.
Side Note- At CES, I am doing a super session entitled “The Battle For Control of the Connected Consumer, on January 5th at 1:30 in room N 257 of the Las Vegas Convention Center.
2- HD Storage Wars vs. On Demand
While there will be a real battle between the HD DVD and Blue Ray camps over trying to get their new HD storage formats accepted by the mainstream public, it will become clearer to them and the industry that the real competition in HD will come from more and more mainstream and HD content becoming available on demand. In years past, DVD’s took off because people wanted to have fast access in real time to movies and other DVD content and could not get that content for immediate use other then buying them or renting the DVD of that particular movie or content. But as broadband becomes more widely available and DRM’s get flushed out in ways that are acceptable to Hollywood and the TV broadcasters, we will see more movies, TV shows, etc become available in on demand formats. This alone should get the two sides to try and work around a single high def recording format for use in HD recorders and work to get the prices down on these systems as fast as possible in order to meet this on-demand threat head on. Although large amounts of content on demand are still a bit into the future, don’t underestimate its competitive impact on the success or failure of these new high density recording devices.
3- Viiv and Vista hype will dominate industry commentary and tech air waves
It will be very clear after CES that for Intel and Microsoft, Viiv (and Dual Core processors) and Vista will be at the center of their 2006 focus. Intel’s Viiv platform is aimed at consumers and at its heart is a new dual core architecture that makes Microsoft’s Media Center PC’s work better. At the same time, this is the year that Microsoft finally releases a new OS that will have major ramifications on future Media Center PC adoption rates as well as giving business and consumers a more stable and easier to use mainstream operating system. Interestingly, Vista alone will have a big impact on PC sales in the coming year. I am already hearing from IT directors that they are factoring in Dual Core and Vista into new purchases in 2006 and although 2007 will be the year when PC sales of advanced systems to support Vista will really be in full swing, there should be a sizable number of PC’s bought next year in anticipation of Vista.
4-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.
5- 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.
6- 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.
7-TFT LCD big Screen TV Go Mainstream
While plasma TV’s are not dead by any means, 2006 will start seeing a real shift towards LCD TFT televisions as the Big Kahuna’s of flat panel TV’s. Prices are rapidly coming down for larger LCD TV displays and Sony will start pushing their Bravia line of LCD TFT sets big time during the coming year. We should see the 40 inch LCD TFT screens well under $2800 by next Christmas. For larger screens, rear projection still represents the best bang for the buck and plasma TV’s are still getting better but competition from LCD’s will have the biggest impact on plasma’s future.
8-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.
9- The Rise of Pre-Paid Rechargeable Gift Cards to Prevent Stolen Financial Identity
I don’t know if Visa or Mastercard understands how important this is but these rechargeable gift cards are a god send for anyone wanting to purchase products online and are afraid of their financial data being stolen. I picked up a Visa gift card recently and put $200 on it. I then used it exclusively to buy Christmas gifts online and since it is tied to a prepaid credit card, it has no personal financial information connected to it at all.
I realize that by using my bank credit card I would have no more then a $50 liability if the card was stolen and used by others and if I lost this gift card I would be out anything left on the card itself. But I believe many people will begin to see these pre-paid cards that are not tied to your personal banking data as a valuable tool and we will see them being used more and more for online transactions.
10- 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.
http://www.csinsights.com/index.php?action=pg_article&id=81
