What Will Soar and Fail in Tech and Business This Year
The tech guru whose predictions are closely followed by Silicon Valley luminaries has some thoughts about what to expect in 2015.
This story originally appeared on Fortune Magazine
No one does predictions like Mark Anderson, whose forecasts about the intersection of the economy and technology are closely followed in Silicon Valley. He has a global view of what's the next big thing and place along an eye for hot products and countries that about to take a dive. Anderson is head of Strategic News Service, a newsletter publisher for industry leaders and venture capitalists. It claims a readership that includes Dell CEO, Michael Dell, Tesla CEO Elon Musk and Microsoft's Bill Gates.
Recently, Mark Anderson listed his predictions for 2015 during a gathering in San Francisco. Here are his key points:
- Digital currencies like bitcoin will multiply and go nowhere. Currencies require the economic strength and military power of a nation to garner people's trust.
- Net neutrality, the idea that Internet service providers and governments should treat all data equally, will survive.
- Pattern recognition will become the real goal of big data. A host of new tools and chips will be developed, to let people gather data and pick out trends that they would otherwise be unable to see, setting off a revolution in computing.
- Following the recent series of corporate hackings, security will become a priority on CEO agendas. Companies will reverse the downward spending trend on security as the cost of poorly protected computer systems outweigh the cost of building secure ones.
- Virtual reality will remain the domain of entertainment. Headsets that immerse people in a 3D world will not become a feature of everyday life despite Facebook's $2 billion acquisition of Oculus, a company that makes virtual reality headsets.
- Expect Amazon to stumble. Between the brawl with publisher Hachette over e-book prices, drones, and the Amazon Fire phone's flop, losses are heading Amazon's way.
- Networks for devices connected to the internet (think refrigerators that let you tweet) will get off of their launchpads but remain niche. All people really want is low energy costs, lots of TVs, and one remote. People don't want complexity replacing reliability and dumb things talking to other dumb things.
- Digital payment service Apple Pay will succeed, establishing it's leadership in the market.
- Computer encryption will continue to expand as a major trend.
- Personal health and fitness and lifestyle devices will merge, and there will be a plethora of watches and fitness bands on the market. Intelligent clothing, (think: socks that are connected to the internet and can monitor your blood flow), will stay niche due to price and inconsistency.
- Oil prices will stay low. An increased supply of alternative energy and additional oil supplies from fracking mean oil prices will stay at $50-$60 a barrel, down by more than half from earlier this year. Trillions of dollars that were tied up in energy spending are now available for bridges, schools, and infrastructure. It's a gift to the world.
- China has a lot to worry about. China's economy is driven by politics rather than money. Between fudged numbers in government economic reports, pollution, and the population's distrust of food quality, China's population is unhappy. China's leadership is well-educated and intelligent so they're managing to hold everything together, so it will take years for China to crumble. When it does, the fall will be hard.
- Japan is in a sweet spot. For all the talk about how Japan is in trouble—natural disasters, aging workforce—it is, in fact, doing well. Its business model of high quality exports, a strong global presence with companies like Toyota, and relatively few imports compared to other countries mean Japan's economy is going strong.
- Samsung is in trouble. Samsung's business model is based on selling modified versions of existing inventions like the iPhone rather than inventing. With the rise of Chinese competitors like smartphone maker Xiaomi gaining market share, Samsung is in a tight spot.
- India looks pretty good. The recent visits between US and India mean tighter military relations. US is about to give it's blessing on India's nuclear weapons program, which has already produced nuclear weapons. This will be the basis for a tighter alliance in South Asia between India and the US that will make China nervous.
- The European Union is going through a cultural clash.Germany makes most of the decisions, and the question is how will the rest of northern Europe especially Sweden, Finland, Norway, and Denmark stand for it?
- Australia's not doing great. China owns a large chunk of Australia's businesses. When Australia had the money to spare, it didn't invest in it's own industries and universities. Now, Australia is a natural resource based economy with a sliding dollar at a time when natural resource prices are plunging. Its biggest customer is China, and China is interested in owning Australian businesses.