As we begin 2011, optimism is on the upswing. And we’ll need it: The technology industry has a lot of potential, as embodied in these 10 trends we’re seeing, but it will take continued growth — and a lot of hard work — to make them happen. What do you think of our crystal ball-gazing? Vote for your favorite trend in our poll at the end.
1. Apps spread everywhere — Sure, apps were a big story last year. But in 2011, they will be a tidal wave. Apps have become far bigger than the iPhone. Other smartphones have them. So do tablets and connected TVs. The Mac is getting apps, and so is just about every other hardware platform. It’s a shift in how we consume software, since nobody wants to take the time to download applications. People want to use apps on the go and in real time, as they need them. Apps work with a simple tap, not complex commands or a sequence of clicks. They are the quickest way to get things done. As they spread far and wide, we will need something to manage them. Discovering the right app is still going to be a tough problem, as no one has come up with the equivalent of search, which solved the problem of navigating through millions of web sites. As users embrace more and more platforms, they will want their favorite apps to be available on all of them.
2. Touch is just the start of new user interfaces — Gestures and touchscreens have come to the mainstream with products such as Microsoft’s Kinect motion-control system and Apple’s iPhone. New, more intuitive user interfaces are finally breaking the hold of the decades-old mouse and keyboard. Technology is finally adapting to the way humans play and work, not the other way around. In 2011, we can expect the Kinect interface to spread to the PC and the TV control systems. Touchscreens and motion controls will make our mobile gadgets easier to navigate. The user interface makeover will continue through the year and delight us with cool new products. The latest advances in computers that recognize your face and do something with that input have been chronicled in the New York Times.
3. WikiLeaks-style leaks make the world more transparent — The Obama presidency opened with a vow for more transparent government. But the WikiLeaks site gave that a whole new meaning as it leaked hundreds of thousands of documents, from insider tomes on the Afghan war to secret diplomatic cables about China’s suppression of Google. WikiLeaks may or may not survive, given the legal and financial troubles of leader Julian Assange. But it has demonstrated something that hackers have only dreamed of; it can publish whatever it wants and no one can stop it from doing so. State and corporate secrets will become more vulnerable to leaks in the future as more adopt its methods and its mission. For innovators, there are two outcomes. The market will favor tools that can make society more open, and there will be more demand for services that can keep data locked tight. In the words of internet activist Steward Brand, “information wants to be free.”
4. Facebook keeps growing without an IPO — There are other social networks besides Facebook, but Facebook is the one that matters. Mark Zuckerberg had a big year in 2010, scoring big with Time magazine naming him Person of the Year and not so big as the inspiration for The Social Network movie. But Zuckerberg’s fame will likely keep growing in 2011 as Facebook continues to absorb new features and grow toward 600 million users. Although government regulators don’t like it, Facebook has found ways to stay privately held as a company, postponing what could be a very big initial public offering. Facebook will likely defeat any efforts by Google to expand into social networking, and MySpace may find itself under new ownership. But the great social networking wall of China will remain in place, blocking Facebook’s march toward a billion users.
5. Apple still dominates but Android flexes its muscles — Steve Jobs has a lot of momentum as a creator of the iconic products of the digital age. The iPhone and the iPad will likely continue to find favor among developers and consumers alike. Apple’s hot products are likely to get big makeovers, starting with the iPad 2 coming in a matter of weeks. Verizon Wireless could be a big new launch pad for the latest Apple products as Apple finally diversifies beyond AT&T in the U.S. To date, Apple has been fighting with one hand tied behind its back. Android products will finally catch up and provide credible competition, but don’t expect that to put a dent in Apple’s profitability or its revenues anytime soon. Apple expects to ship 21 million iPhones in the first quarter alone.
One big question is whether Jobs can figure out how to make apps on the TV work via the company’s Apple TV platform. The digital living room is one place where Apple has to catch up. And the big question after that is whether any of Apple’s success in these new platforms will rub off on the time-worn Mac platform. Apple will likely increase its market share for the Mac, but the numbers still aren’t that impressive. Apple’s toughest problem will continue to be sharing. If it doesn’t learn to do it well, rivals such as Google Android and Facebook will likely teach it a lesson or two.
6. Mobile devices push the wireless networks to the breaking point — As more people get smartphones, the data traffic on the networks will produce lots of headaches for users and operators alike. Other gadgets will also tap mobile networks, from eBook readers to connected cars. The arrival of 4G networks using LTE technology will help alleviate the growing bottleneck problem, but wireless operators will have to turn to Wi-Fi networks to offload data traffic so they can support the increasing volume of telecommunications traffic. You can expect a lot of innovation to focus on making the most efficient use of the available spectrum. The government may set aside more spectrum for wireless services, but don’t expect that to happen soon.
7. Quality wins — When it comes to digital entertainment, quality wins. That’s the way it has always been in the content business. The next Harry Potter movie coming in 2011 will be a blockbuster, because it’s based on a great story. The Call of Duty video game coming in the fall of 2011 will hold gamers spellbound. While these reliable entertainment properties aren’t original anymore, consumers embrace them because they know that the brands have come to mean a rollicking good time. Whenever a company wants a new technology to take off, it can’t forget about the quality of the content that it will enable. If you want to launch a great game console, you have to make great games. This makes plenty of sense, but it’s easy to forget about the quality of content when there are so many other things to worry about, like technology, distribution, business models, and marketing. Netflix may be riding high now, but it won’t last if it can’t get access to the best movies. The Xbox 360 is doing great, but where will its big hits come from if Microsoft allows the best developers — such as Halo creator Bungie — to leave the fold? Another implication of quality is that it will not only help with acquiring new users, it will also help retain them. In 2011, this trend will rule as consumers sniff out the good stuff.
8. Shopping gets more fun as e-commerce is reinvented — The first generation of e-commerce sites were all about functionality. Amazon.com and eBay made it easy to start buying and selling things online. But now is the time for shopping to get fun, according to Jeremy Liew, a managing director at Lightspeed Venture Partners. That’s where social shopping comes in. Groupon’s popularity and its big market value (it turned down a $6 billion offer from Google) show that electronic commerce isn’t a moribund market. We just saw a record-setting holiday online shopping season where consumers spent $30.8 billion in the U.S. But that’s nothing compared to what could happen as more innovations hit the market and make shopping more fun. From gamification to changes in user interfaces, there is still plenty of innovation that could happen in the e-commerce market to transform online shopping into a more interesting and addictive experience.
9. Cars drive themselves — For those of you who always wanted a car like David Hasselhoff’s smart car, KITT, from 80s TV show Knight Rider, your dream may be getting close to coming true. Google has already tested a driver-less car that is driven completely by a computer. More players will likely enter this fray as the technology gets better. Eric Schmidt, chief executive of Google, correctly observed that the worst problem with driving cars is human error. Computers don’t send text messages while driving, nor do they drive under the influence or get distracted while listening to the radio. Computers can use radars to sense traffic ahead of them and react faster than a human can when it comes time to slam on the brakes. Humans may be afraid to trust their computers to drive, but it can’t get much worse. More than 1.2 million lives are lost in road accidents every year. If Google doesn’t launch these cars, somebody will.
10. Tech for aging boomers takes off — Baby boomers are just starting to turn 65. Logic suggests that products designed specifically for the tastes of baby boomers will take off. This means that all sorts of technologies that cater to older or retiring consumers will have a natural market. This could mean everything from more use of large buttons on smartphones to technologies that make it easier to track the health of seniors from afar so they can reside in their own homes instead of hospitals. You can laugh it off as geriatric tech for old timers. But those who take it seriously will be laughing their way to the bank.
And here are a few honorable mentions:
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Cloud computing goes big — Cloud computing services are likely to grow from $68.3 billion in 2010 to $148.8 billion in 2014. That means everything from OnLive’s cloud gaming service to Amazon’s EC2 web hosting service will become a lot more popular. The cloud makes it convenient to launch new businesses, ride a big growth wave, and adapt to change.
Cyber warfare erupts across the web — Just as WikiLeaks promised it was just getting started with document leaks, cyber warfare is also in its infancy. The attacks on Google China and the sparring over WikiLeaks were small examples of what could happen as governments and hackers square off against each other. Cyber warfare will likely hit an even bigger scale in 2011.
Wintel falls apart — As Intel moves into software and Microsoft embraces other chip makers, the marriage of Intel chips and Microsoft Windows, known as Wintel, will slowly unravel into a marriage that is no longer convenient. The partner-swapping and backstabbing will continue until the companies are in a state of warfare.
Emerging markets drive tech adoption — The days are long gone when users in emerging countries embraced older technology. With growing middle classes in Brazil, Russia, India, and China — and plenty of wealth in other regions has well — the demand for tech goods will continue to expand. That trend has been driving sales in tech for some time — 80 percent of Intel’s sales are overseas now. But it will also happen with web services such as social network games. Accel and Tiger Management’s recent $30 million investment in Vostu shows that the Brazilian social game market has a lot of potential. Success in an emerging market can generate the growth that a startup needs to get to critical mass.
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