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Summary:

Everybody else is making predictions for the new year that is just around the corner so I figured I’d better jump in with my own. This year has seen some real advancements in both the hardware and software used to power mobile devices and I believe […]

Everybody else is making predictions for the new year that is just around the corner so I figured I’d better jump in with my own. This year has seen some real advancements in both the hardware and software used to power mobile devices and I believe we will see the fruits of these advancements start to appear next year. Here are my predictions in several categories in no particular order.

Notebook computers

Next year will be the year of the notebook computer with dual-core processors. These processors will begin to appear in volume in devices that will be released by major OEMs like Lenovo, Dell and Gateway. These laptops will run faster, cooler and use less power extending the ability of notebooks to be true desktop replacements. Expect product announcements early in the year.

Vista will be released late next year and we will see a number of innovative notebooks that offer media center and Tablet PC functionality all rolled into one device. OEMs will begin putting touchscreens on full sized notebooks now that Microsoft has allowed them to be used with the Tablet PC bits of the OS. The addition of media center capability will turn the notebook into a total entertainment center for many consumers and a hub for multimedia entertainment, especially for apartment dwellers.

Ultra-portable computers

While there have been several attempts to produce full-featured handhelds that are true laptop replacements only the Sony Vaio U series reached the mark. Several companies are working on similar products that should start to appear in 2006. The keys to the success such UPCs need to garner in the consumer space are two-fold. A UPC must be a full, no compromise Windows computer that will fit in the hand. This means an intelligently designed dock will be the “make or break” feature determining the success or failure of these gadgets. Consumers have gotten used to laptop computers that will do anything they need and they will expect the same capability of these new handhelds. Consumers have proven repeatedly they will not pay a huge premium for a subset of their other computers and this will be a big challenge for the OEMs in this space. The other sticking point will be price. Consumers have a difficult time justifying paying over $1,000 for a device that won’t be used as their main computer and it’s a slippery slope for OEMs to balance the two consumer requirements. I believe next year a few devices will be released that will begin to address both these consumer requirements and this market segment will begin to take off. Once mainstream purchasing of these gadgets takes off you will see an explosion in the UPC space.

Smartphones

With several new smartphones due to appear early next year with new features and cool appearances we should see this segment start to take off. The upcoming Treo 700w running Windows Mobile will see brisk sales exposing the technology to consumers who have never seen them before. This will escalate sales even further and other smartphones like the Motorola Q will be well met by computers. Carriers will continue to add download services offering all sorts of video and music that will make the smartphone fill a larger role in the consumer’s daily life. When you add easy photo sharing of photos taken with integrated cameras that offer good quality images into the mix I think you’ll see sales in numbers bigger than ever. Price concessions will need to be made by the carriers to bring the price point down low enough to generate mass market sales.

Portable music players

This one will be a no-brainer, Apple will continue to dominate as the iTunes Music Stores continue to enjoy record sales globally. Competing music stores will begin to get very creative to try to grab some iTunes customers to switch, and I think we will see at least one of iTune’s competitors take a risk and give free or very low cost players to new customers. These will be full-featured like iPods and it will be interesting to see how consumers react to such an offer.

DRM will continue to plague consumers and I don’t think we’ll see this change next year. The RIAA will continue to bully the little guy while professional thieves will not be deterred even slightly in the distribution of illegal music and video files. The assumption that all consumers are thieves will continue to be shared by content providers.

PDAs

This category is a tough one. We should see a lot of new Windows Mobile 5.0 devices start to appear next year but adoption will be slow. Most of the advancements in Windows Mobile 5.0 are “behind the scenes” and consumers may be disappointed at the apparent lack of new features. Developers are taking a long time to release WM5 versions of their software and this will slow adoption even further. Palm will continue to release cheap PDAs at major retail outlets while Windows Mobile devices continue to be available online only. The PDA segment will continue to be hammered by portable music and video players that are getting cheaper all the time and smartphone sales will eat into the PDA sales even further. PDAs will become even more of a niche product next year extending the trend of the last two years.

Tablet PCs

Next year will be an exciting one in the Tablet PC segment as Vista is released and new features enable users to tailor the ink experience to fit the way they want to work. We will continue to see the notebook and Tablet converge as the major OEMs continue to offer convertible notebooks with swivel digitizer screens. The hybrid Tablet with a detachable screen will likely disappear completely with convertibles becoming the standard. Slate OEMs will continue to innovate to appeal to consumers and vertical markets who want to shed the keyboard.

Smaller Tablet PCs will begin to appear in number and prices will significantly drop for these devices. If this happens early in the year these mini-Tablets will begin to penetrate the mass market with big sales numbers, thus cementing this segment for some time to come. A lot of these devices will have passive digitizers (touchscreens) to keep costs down and increase usability in the field. I predict we will see the first mini-Tablet PC with integrated EVDO or EDGE for “always connected” utility. All of these events will offer consumers more choices and sales of Tablet PCs should shoot up as a result.

  1. Interesting predictions. I’m not too sure I agree with the “PDA” projection. I’m leaning towards PDA becoming more powerful and actually becoming merged as “the” Ultra Portable PCs. (e.g. the DualCor cPC). I also believe (or hope) that PDAs will gain more memory (Flash and hard-drive based) that will provide better options for people to do more. Also, I believe Intel is planning a new Pentium 4 for the PDA and that will be a huge buzz for the market. The Palm OS may make a huge come-back, which may keep the Windows Mobile 5.0 sales down.

    Smart-phones will still have a lot of competition from the increasingly more functional (and cheaper) cell phones from Motorola, Nokia etc, that allow persons to browse the web, take pictures & video, check e-mails, provide bluetooth and not be a “taco” against the ear.

    (This may be for the MOTR show…)
    Any predictions for the Xbox 360 vs the PS3 and Revolution? My projection is that Xbox 360 sales will drop after the holidays and remain low until the PS3. The PS3 will then dominate the gaming market and remain >70%.

    Otherwise, have a Merry Christmas!

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  2. Eh. Does anyone other than the PPC cultists care about PPC or WM5? I saw last night rhat Office Depot has dropped PPC.

    Interesting speculations about UPCs.

    No mention of the Nokia 770 or even Nokia phones? Tch!

    Tapped on a Nokia 770 given to me for free by Nokia.

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  3. I hope you are right about the price drop at the tablet market, this prediction was repeating itself throught the last four years now.

    Happy holidays!

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