Last week we had the pleasure of being with many of our members and friends, in both the industry and the press corps, for our Second Annual New York Dinner, held on Tuesday at the Waldorf=Astoria Hotel. For those of you unable to attend, just imagine getting off at the fourth floor, laid out in diagonal white and black squares as you leave the elevator, headed for the Conrad Suites. Wheres all that noise coming from ? Must be the reception, and indeed, everyone seems excited to be there.
After the group shares a glass of wine and an excellent dinner, Sharon Anderson-Morris takes the podium to remind us of recent new SNS programs and events, including our new SNS West Coast Dinner, the new SNS Media Page (where this discussion will soon be posted), and our new Ahead of the Curve membership for institutional investors.
When my turn comes, I tell the group that this is actually our third year of making these annual predictions, and that we are running at a 93.5% correct rate for the first two years. Here are my predictions for the coming year:
TEN PREDICTIONS FOR 2007:
1. The first market acceptance of e-phones in the U.S.
Ive been writing about phones that pay for things for almost a decade, but finally its come time when the U.S. market is ready.This is because the RFID and NFC radio technology is ready, together with increased security; because the readers are now entering the marketplace; and because phone operators have finally formed a consortium for accepting and promoting this use.
It will take many years for this to become the final retail payment scheme, but this will be the year when it became possible to pay with your phone in the U.S., and the response will be strong enough to encourage all participants to step on the gas.
2. Authentication Everywhere.
At a time when many have given up on the idea of privacy (Scott McNealy leaps to mind), the prevalence and concern regarding ID theft will force makers of all personal appliances to consider including or strengthening authentication features.Look for finger swipes on more kinds of appliances, as well as increased biometric sensing, including voice.
3. Led by the Tesla, 2007 is the first Year of the Electric Car.
SNSers already know all about the Tesla, which is slated to go into production in 2007: all-electric roadster, 0-60 in 4.0 seconds, 250 miles per charge, charges at home overnight, effective miles per gallon = 139. Why go halfway with a hybrid, when you can go all the way and use the electric grid as your gas station system?
I will also note the release of a study last week by the Battelle Labs (PNNL), with its mind-boggling conclusion: if all 220 million cars in use in the U.S. today were Plug-in Hybrid Electric Vehicles, the current grid would be able to supply 84% of the needed transportation energy.
Read that one twice, and then write to your Congressperson and ask for tax incentives to be moved from 12 mpg pickups to PHEVs and EVs. The incentive will pay for the price difference, and, if everyone moves to this technology, we can kiss the Saudis, Iranians and Venezuelans good-fffing-bye.
Now theres a goal.
Oh, and Vectra now makes a beautiful all-electric scooter.
4. Oil goes up (not down), returning to the $70-80 range, continuing an unmatched global wealth transfer.
Because of this, solar power will go mainstream next year, with multiple state and utility subsidy programs.
5. Online advertising continues its growth, at a 20-30% rate.
I think we will end up at the high end of this call, with online ads overtaking magazine ads during the year. This is what I have been calling the River of Money, which will pay for most of the online businesses, Google and all, over the next decade. Total global ad spending is in the $200B range, with total TV spend in the $60B range.
The rapid movement of this money to the Net will be a primary incentive for new company formation.
6. Dollar falls further vs. euro; yen/dollar will decline to the 105-110 range.
We all know that Japan has long been an interventionist in international currency markets, in order to support its (somewhat artificial and mercantilist) export market. This year, I think Japan will have to spend $500B-$1T in interventions for the year, which will be an all-time record in anyones book.
7. The year when the New Russia emerges, dragging the New Cold War right behind it.
Heres the new handbook for negotiating in Thugland: I give you $5B for two thirds of an oil project (or minerals, or --); you take my money, and immediately demand one third back. If I dont buy in, you burn my refineries, kill my managers, and / or cancel all my drilling permits.
Pretty good deal, eh? No wonder Russians are starting to look on Stalin with nostalgia.
The world wants to believe that Russia is being led by a sophisticated internationalist, businessperson, man of the world.Wrong. Thug would appear to be a better descriptor of Mssr. Putin.
He has re-nationalized all of the key resource industries, made state governors his appointees instead of being elected, taken over all TV stations, eliminated debate in nearly all print organs, and now supports sham parties to make it seem that there is any party beyond his own.
Last week, Gazproms CEO was fired without notice and replaced by an unqualified FSB (KGB) pal.
The world is not even slightly prepared for the New Russia.
8. The year when X,Y Computing takes over.
Weve been waiting forever for things to move into the parallel computing universe on a daily scale, and this is the year when it happens. Sure, weve got duals and quads now in the mix, but this is the year when we never look back again: we turn the computer on its side (therefore X,Y instead of Z), and run many processes instead of trying to cram more electrons into a single channel.
9. The year of the Flash (NAND) Wars.
Its a bit hard to believe, but we are looking at a year when 17 new chip fabs will be coming online, and most of them are in the NAND business. This means flash memory prices take a dive, flash-based computers take hold, and everything that can use memory will, and more of it.
A tough year for the makers, but a great year for consumers. This alone will help to fuel a new explosion in consumer electronics, just when some thought it was taking a pause, with the result of pulling up sales for other chip and component makers, etc.
10. The iPod maintains its dominion in MP3 for the year, but that dominance is increasingly challenged as iTunes slips share.
In most eyes, the Zune will be considered a failure during the year (although Microsoft claims it has only modest sales goals for Year One). However, by the end of 2007 iTunes will be beginning to lose share to other audio and video distributors with more generous Digital Rights Management schemes (play on any/many players, etc.). This could turn Wall St. against Apple, unless there is a new story, like the fabled i-phone.
Bonus Predictions:
11. The EU continues to reject Turkey.
The current requirements for peace and trade with Cyprus are just window dressing, setting the table for final rejection. There will be no Islamic states within the EU - unless you count France and Germany, 20-30 years from now.
12. Chinapan: China and Japan, together, become recognized as the new, integrated manufacturing center of the world.
China is said by the OECD to have just passed Japan in R and D spending, which many inside and outside China doubt, but it tends to make the point that these two countries are going to be wedded at the manufacturing hip, as Japan applies funding and IP, and China provides low-cost labor and a huge market.
13. Segolene Royal becomes President of France.
There is no good reason for this, at a time when the nation is likely to go hard to the right, toward Mr. Sarkozy, over the immigration issue, but - how can she lose with a name like that?
14. One-to-one computing becomes a normal alternative for teaching.
The question no longer becomes should kids have their own computer, but when can they.
15. Boeing leaps beyond Airbus, and books at least 25% more orders.
Boeings new management is as good as Airbus is deficient, and the difference will show.
A few more comments on 2007 are in order.
First, the landscape is obvious, in two separate ways:
The global economics will be led by oil, cheap labor and money - specifically, global liquidity and currency rates.Meanwhile, this will be the Year of Microsoft, as the company releases both flagship products and tries to sell more games than there are birthday cakes. For the second reason, I think the growth rates in technology will be on the high end, perhaps 12-15%; those RVM types calling for 5% growth seem to have forgotten what happens when the Golden Goose drops an egg or two.
Finally, this is a year of transition in too many ways to count, but this also makes it a year of mixed and complex trends.Any pundit or analyst who tries to describe the years potential with a sentence or two will certainly regret it.
Hopefully, youll get it just fine.
Your comments are always welcome.
Sincerely,
Mark R. Anderson
