8 Tech Predictions for 2009

From Windows 7 to Apple netbooks, here are eight tech predictions for 2009.
by Tim Bajarin

The current economic crisis makes forecasting much more difficult this year than in the past, yet December still seems like a good time to ponder the year ahead. To that end, I've compiled a list of seven tech predictions—things I believe will happen over the next 12 months, plus one perhaps outrageous bonus prediction that could happen…if the stars align just right next year.


1. Windows 7 will bring tech out of the doldrums. Sales of PCs and other tech will be down in the first half of 2009, but when Microsoft delivers Windows 7 by Q3 (as many expect), it could catalyze the tech economy. This new OS will drive businesses and consumers to new PC and notebook purchases by Q4. Think it's just wishful thinking? In the past when Microsoft delivered a new operating system for mass consumption, sales of PCs and notebooks accelerated dramatically for a period of 24 months. This didn't happen with Vista, but it has happened with many other major releases. Let's hope that history repeats itself.

I'm not alone in this prediction, either; I've talked to several IT directors who confirm this view. Many enterprises balked at buying Vista but are hearing enough good things about Windows 7 to be open to upgrading once it comes out. The big issue will be 2009 budgets, and at the moment, a lot of IT budgets are frozen. Still, IT managers have told me that many of their machines are so old that they have to do some hardware upgrades just to keep their shops competitive.

2. The tech industry will be the first to recover. While the real estate and auto markets will be very slow to come back, the tech industry will recover fastest and be moving forward again by Q3. As stated above, Windows 7 could jump-start things, but technology has become so important to our business and personal lives that the employed will buy new notebooks, music players, and TVs if the economy merely stabilizes sometime in 2009.

3. The unemployed will start small businesses to survive—and will need PCs to make a living. We saw this happen during the last recession and also when some of the big companies downsized. Many of those laid off are professionals who could start specialty consulting services as well as new businesses of various types just to survive. PC technology and communications will most likely be at the heart of their new ventures.

4. Netbook sales will double in 2009. People want cheaper laptops, ones that provide more mobility. Manufacturers should sell about 18 million netbooks this year, and at least another 36 to 38 million worldwide in 2009. These products have driven down the average selling prices of traditional laptops; now full-powered laptops are in the same price range as netbooks. Consequently, users will be faced with a difficult choice when purchasing a notebook in 2009: extreme mobility versus full-powered functionality. But the biggest impact from netbooks will be at the vendor level. These lower-priced models have small margins, and that will impact their profitability in 2009. The drop in revenues will force the major vendors to move faster to create their own ecosystems—hardware, software, and services tied to these netbooks through some type of cloud solution—and use this as a way to develop new revenue streams.

5. Smartphones will gain market share. By 2012, 75 percent of all phones sold in the US will be smartphones. Earlier this year sales of cell phones and smartphones grew, but under the current economic climate, sales for the latter part of the year seem stalled. Still, about 1.2 billion cell phones will have been sold worldwide in 2008. They're simply indispensible tools, and in the next 12 months, smartphones such as Apple's iPhone and the RIM BlackBerry will gain a stronger foothold in the U.S. and Europe. By 2015, smartphones will represent as much as 65 percent of all cell phones sold globally.

6. Android will expand its reach. When we talk about Android today, we mostly discuss its role inside a "Google phone" such as the T-Mobile G1. Indeed, in the near term, Android's focus will continue to be smartphones. But by next holiday season we should see it in set-top boxes, digital televisions, and Mobile Internet Devices (MIDs)—and perhaps even desktop terminals. In fact, Android could emerge as the biggest threat to Linux's desire to make the mainstream, and within the next three years Android could become a major OS in its own right.

For this to happen, Google will need to take a Microsoft-like approach to shepherding Android; the SDK needs to be much more solid, and the company needs to drive open-source components in a way that gives Android a consistent UI across all types of devices. And the Mountain View crew needs to take a page from Apple's playbook and create an easy way for people to get Android apps that are tested, approved, and trusted. If that happens, Android could become a most interesting broad-market OS—and could perhaps take on Windows in the future.

7. Apple market share in PCs and smartphones will grow. Even in a downturn, Apple will grow its market share by at least 2 points in 2009. The ease-of-use message and the complete ecosystem are attracting more new customers to Apple stores, and the company will gain new Mac users at the expense of Windows vendors. If Apple delivers a low-cost laptop sometime in 2009, as some rumors have it, its market share could climb even more than 2 points in the coming year. Also, Apple will continue to innovate around the iPhone and even add some models at lower prices to attract new customers worldwide. Apple knows that it is gaining ground on competitors and will use the competition's struggles in the coming year to its own advantage.

And for my outrageous prediction:

8. Microsoft makes a play to purchase RIM. If the Apple iPhone makes any serious inroads into the enterprise, Microsoft will make a bid for RIM and use it to enhance and solidify the company's enterprise smartphone position. Sure, new versions of Windows Mobile will be much richer in the future, but BlackBerry customers are almost as fanatical as Apple users. Microsoft would love to displace BlackBerry phones with Windows Mobile smartphones, and how better to get RIM's customers than by buying the company? Microsoft could then blend RIM into a service, which is where the long-term money will be someday.
Tim Bajarin is one of the leading analysts working in the technology industry today. He is president of Creative Strategies (www.creativestrategies.com), a research company that produces strategy research reports for 50 to 60 companies annually—a roster that includes semiconductor and PC companies, as well as those in telecommunications, consumer electronics, and media. Customers have included AMD, Apple, Dell, HP, Intel, and Microsoft, among many others. You can e-mail him directly at tim@creativestrategies.com.

SOURCE : http://www.pcmag.com/article2/0,2817,2336693,00.asp