Predictions for 2010: Tablets will fail, Google will pummel Microsoft

Updated: Apple tablet estimated price, AT&T’s projector-phone maker.

After plenty of posts chewing over 2009, VentureBeat is looking ahead with 10 predictions about the year to come, covering tech giants, tiny startups, and of course Twitter. As in the past, these predictions represent the thoughts of individual writers, not the VentureBeat Hive Mind.

Tablet computers will fail to become the Next Big Thing — They’ll get lots of attention, for sure. Apple’s tablet, unless the entire Internet is wrong, will redefine our expectations for the quality of text on a computer display. But a combination of high prices plus lack of a must-have application will keep most consumers away from buying a tablet.

Here’s a simple way to understand it: If you drop your phone and it breaks, you need to replace it immediately. If you drop your $1,000 Apple tablet and it breaks, will you rush out to buy another? (Paul Boutin)

Google will trounce Microsoft in a showdown on multiple fronts — As the search giant’s ambitions continue to grow, it’s not just threatening the startups in its path, but also king of the hill Microsoft. Next year expect to see Google challenge Microsoft’s flagships, Windows and Office.

In 2009, Google finally took the beta testing label of online applications like Gmail, Google Docs, and Google Calendar; it launched a rare advertising campaign called “Gone Google” for those products; and company executives are boasting that 2010 will be the year that Google Apps (the business bundle that includes Gmail, Google Docs, and more) becomes a viable alternative to Office. That doesn’t mean Docs will be a perfect match for Word, but the service will improve enough that Microsoft’s price tag will start to seem mighty onerous. And early versions of an online version of Office are still rough.

Meanwhile, Google’s new netbook operating system, Chrome OS, should be available to consumers by the holiday season, and while it won’t replace Windows anytime soon, you can expect it to make a big splash. And anticipation is building around this week’s rumored launch of the Nexus One, a phone using Google’s Android operating system that the company designed itself, which will probably leave Windows Mobile even further in the dust. (Anthony Ha)

Twitter will launch its own social version of AdWords — And contrary to what chief operating officer Dick Costolo said earlier this year, we’re not sure everyone is going to love it. It will be ground-breaking in its own right though. After rabid speculation during the year that one part of Twitter’s secret business model would be to sell text ads against its real-time search results, the company went ahead and turned on revenue via data deals with Microsoft and Google. Costolo then said in November that the company will launch ads:

You’ll see an advertising strategy from us in the near future. It will be fascinating and completely non-traditional and people will love it. The genius of Google was that when they first rolled [AdWords] out — the ads were what people were looking for. What we want to do is to do something organic, where it’s in the flow and where it matches what people want. It’s going to be really cool.

So here’s a guess at what it might look like. When you naturally converse with friends on Twitter about brands or movies, there might be extra keywords or immersive media attached to the tweet. It will all be opt-in — you have to click through, just the way you do on geotagged tweets to see an image, map or movie preview drop down from the tweet. For example, if you talk about “Avatar”, 20th Century Fox could pay per impression or click for a trailer to be attached to your tweet and your followers would have the option of clicking through to watch it. (There’s more on this “Supertweet” idea here.) Companies would bid to attach rich media to phrases appearing in tweets across the Twitter ecosystem. Clients like Tweetdeck, Hootsuite and Seesmic would get a revenue share from that advertising. Twitter would probably have certain limits for the volume of ads propelled through the firehose, in the way that Google limits the number of text-ads per search, so it’s not too annoying. (Kim-Mai Cutler)

Tech IPOs will boom — If the economy continues to improve as it has been, then technology-related initial public offerings will likely increase. Eight venture-backed tech firms went public in 2009, compared to seven the year earlier, according to VentureSource. Those numbers are small compared to past years, and they’re definitely small compared to the numbers of medical and pharmaceutical companies lining up to go public. Writers such as Paul Kedrosky are predicting a tech IPO boom in 2010. There are dozens of IPOs in the pipeline.

Of course, it’s not the number of tech IPOs that really matter, but the magnitude of each one. If Facebook, Twitter, or Zynga go for an IPO, it could trigger a wave of excitement for the technology industry, similar to how Google’s IPO in 2004 helped turn around the sliding fortunes of Silicon Valley, or how Netscape’s IPO instigated the Internet boom. Meanwhile, smaller companies such as Yelp, which turned down a Google acquisition, and Telegent Systems could also keep the IPO pipeline full. We don’t know exactly how many, but it’s a good bet that we’ll see more than eight venture-backed technology IPOs in 2010. (Dean Takahashi)

Home energy management will be the first cleantech bubble — 2009 was a huge year for the various industries involved in building a cleaner, more efficient Smart Grid. The U.S. Department of Energy handed out $3.4 billion to utilities looking to modernize their systems, and many of them have announced big plans to roll out smart meters and newer equipment to millions of homes. More meters means more data — a trend that has led to an explosion of companies looking to slice and dice home power consumption data into formats easily digested and used by consumers to save energy and dollars off their electricity bills.

Sure, this is a relatively new business, but new startups can’t keep launching forever. There isn’t enough of a market for these services yet. Utilities are far more focused on getting meters installed in their coverage areas than anything else. The only chance most of these services have in this crowded field is to form enough partnerships with either utilities or appliance makers. We’ve already seen a number of these: Tendril scored a deal with General Electric,OpenPeak with smart meter maker Itron, etc. Hohm and PowerMeter are clear exceptions to this rule because they have the backing of internet giants Microsoft and Google. Few will be able to compete.

Our prediction is that Tendril will become the most formidable startup in the space due to its generous funding, strong leadership and on-point PR strategy. The other contenders seem more like acquisition bait. Itron could easily snap up OpenPeak. Google could acquire AlertMe or The Energy Detective — it has partnerships with both. Newer entrants probably won’t fare as well. (Camille Ricketts)

Facebook will enable location in its mobile apps –The world’s biggest social network has so far kept its powder dry as tiny location-based social services like Gowalla, Rummble, Foursquare and Loopt duke it out for mass user acquisition. We think that time is coming to an end. The company changed its terms of service this fall to allow for location sharing, and the market has changed. Growing penetration by smartphones has made consumers comfortable with revealing where they are for socializing and startups like New York-based Foursquare have pushed the popularity of “check-ins” over persistent location-sharing.

The big question is how the company will implement it from a privacy perspective. Will Facebook turn it on and set the default to completely private, allowing you to choose a close cohort of friends to share location with? Or will the default be more inclusive than that, open to any Facebook friend who is in serendipitously close proximity to you? (Kim-Mai Cutler)

The venture environment will heat up, but many web startups will be left cold — After 2008’s financial crash, venture investments for web entrepreneurs plummeted (along with everything else), and have been recovering more slowly than newer sectors like cleantech. We’ll see plenty of Internet fundings in 2010, but I expect investors to continue to use a more skeptical eye than they did during the heyday of Web 2.0 when they consider “me too” companies and entrepreneurs with a “We’ll figure out later” business plan.

As venture investments increase over the year, web investments will lag. Lower returns and a shrinking industry won’t help. Web 2.0 to go from being Sand Hill Road’s focus to just one of a number of investment areas. (Anthony Ha)

Games, social and otherwise, will continue to take over the world — Social games took off on Facebook, MySpace and other platforms in 2009. Games like FarmVille gathered tens of millions of users who played for free and paid only small amounts if they wanted to buy a virtual good like a better tractor. Zynga, Playfish and Crowdstar rode this juggernaut, adding millions of users every day for games that were simple, social and casual. In the meantime, hardcore console games were in the doldrums for much of the year and revenues are likely to come in flat compared to 2008 once December sales are counted. The logical conclusion is that during a recession, people will opt for free or cheap games instead of expensive ones.

But it’s good to keep these markets in perspective. While social gaming is less than billion dollars, console game hardware, software and accessories will likely top $20 billion in 2009. We expect social games to grow at fast rates in 2010. The growth will likely spread to other web-based and mobile-based platforms as well, with social gaming gathering momentum on the iPhone and Android platforms.

The hardcore game industry will likely bounce back as well in 2010. If the economy improves, the console games will benefit. Also, there’s a lot of pent-up demand for some of the big titles coming in 2010, which include Starcraft II, BioShock 2, Mass Effect 2, MAG, World of Warcraft Cataclysm, Metroid Other M, and God of War III. All of these games are potential blockbusters that will make it much easier to top 2009 growth figures. On top of that, Sony and Microsoft will launch gesture-control systems that could bring new users into gaming just as the motion-sensing Wii remote from Nintendo has done.

In short, games will continue to grow in all directions. (Dean Takahashi)

The hottest phone feature of 2010 will be tiny projectors — For example, there’s the LG eXpo, coming soon from AT&T. The few lucky gadget gurus who’ve had a chance to bring one to a party all report the same thing: The projector drives people wild. Never mind how many pixels it does or doesn’t have. Lighting up the nearest wall with a video clip projected from your phone will make your friends forget about their touchscreens. (Paul Boutin)

The Chevy Volt will launch … and disappoint — General Motors recently announced that it will definitely be launching its much-anticipated plug-in vehicle in 2010, first in California and then elsewhere. The company increased its marketing for the car to a fever pitch this year, kicking off a major campaign based on its ability to get 230 miles per gallon (with a driving range of 300 miles).

But not everyone is so enthused. Some analysts are saying that the 230 figure is misleading. Others are saying that its lithium-ion battery technology will already be out of date by the time it launches. One of the most compelling arguments is about how much it will cost. The estimated price tag is $40,000 before a $7,500 rebates. That’s still pretty pricey for a commuter sedan and won’t easily be afforded by middle class consumers who would otherwise be interested. General Motors seems to have accounted for this, planning only to produce 8,000 to 10,000 of the cars in its first year, and 50,000 to 60,000 in the year after that. But considering the state of the economy, the rate at which average people buy cars, the general unpopularity of GM following its bailout, and the serious doubts some have raised about the Volt’s specs, it seems like it’s more poised to fizzle out than become a wild success.

If this happens, it could have some serious ramifications for the plug-in vehicle market overall. Sure, companies like Tesla Motors and Fisker Automotive have attracted attention with their swanky and exorbitantly priced luxury EVs, but they aren’t being targeted at the general public. Companies like Nissan and Mitsubishi, planning to release their own, more practical green cars after the Volt’s debut could suffer if EVs have already gotten a bad rap, or even if they just seem like no big deal. Excitement over plug-ins will probably spike again when Toyota comes out with its new iteration of the Prius in 2013, but the Chevy Volt could very well hear crickets when it goes live sometime in the next several months. (Camille Ricketts)

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