Friday, December 17, 2010

December 2010 Early Indications: Prediction Scorecard

Last year, on the cusp of a decade, I looked ahead and in essence
asked 24 questions. In some ways, the world did not change enough to
answer these kinds of questions, while dramatic events in other areas
occurred almost on cue. For brevity, the questions are condensed and
rephrased. (The full newsletter is here)

On a brief personal note, warmest holiday wishes to this virtual
community, which celebrated its 13th birthday in October.

Having brilliantly migrated from computers to MPs players to mobile
data devices, what will Apple do for its next adjacent market?

Score: hit. The iPad sold a million units in less than a month. (As
Samsung moved another million soon thereafter, 2010 will go down in
the record books as the year of the tablet.)

What business models, specifically for social media tools, will emerge?

Score: hit. Location-based services Gowalla and Foursquare, not to
mention Facebook Places, all surged in popularity this year.

What will be the fate of the global middle class as counties like
Brazil grow rapidly even as the U.S. is in some ways "hollowing out"?

Score: Too soon to tell.

Is the time ripe for a design renaissance on par with streamlined
toasters, or the neo-Bauhaus movement that poured so much concrete in
the 1960s?

Score: Too soon to tell. Niche products like the Mini Cooper, unique
structures like the Bilbao Guggenheim or Burj Al Arab "sail" hotel,
and well-designed Apple products do not yet a trend make.

How will the U.S. address its drug problem?

Score: Change is afoot. Although California voters defeated
Proposition 19, as of January 1, 2011 possession of less than one once
of marijuana will be treated as a civil infraction rather than a
criminal misdemeanor. California is also supposed to release 40,000
prisoners, and financially challenged states across the nation may use
budget crises as an impetus to revisit sentencing guidelines.
Internationally, Mexico obviously remains a hot spot in this regard,
with presidential elections scheduled in less than 18 months.

Whether in oil prices, coal emissions debates, or nuclear power
lobbying efforts, competition for energy will have geopolitical
consequences, potentially including more armed ones.

Score: hit, if you count lightly regulated deep-water drilling in the
Gulf of Mexico that goes really wrong as a consequence of competition
for energy. Closer to Pennsylvania, gas drilling using hydraulic
fracturing in the Marcellus shale merited a 60 Minutes segment; the
core technology is the subject of an HBO documentary that won an award
at Sundance.

Will texts, Tweets, and web-hosted highlight clips related to
futball's World Cup be a global coming-out party for social media,
just as the 1958 NFL championship game or the JFK assassination were
for television?

Score: Hit. Twitter traffic reached 3,000 messages per second in the
aftermath of Spain's victory; the service's "fail whale" was busy
during the event as servers were overwhelmed. Multiple information
visualizations reinforced the point in clever ways. YouTube video of
the U.S. goal to beat Algeria traveled far and wide.

Can Google expand beyond its core search franchise?

Score: hit, at least in numbers if not revenues. Google recently
reported activating 300,000 Android devices per day.

What will happen with U.S. housing stock?

Score: hit, if "extreme bad news" is news. Existing home sales fell
to a 15-year low in the summer, even with historically low mortgage
interest rates. Housing starts nearly hit a record low in October.
Repossession numbers improved, largely in the wake of voluntary pauses
by several major lenders.

Regarding identity, as more people grow up breathing the oxygen of
online, all-the-time social broadcasting, what will be the unintended
consequences, the business opportunities, and the backlash?

Score: hit. Facebook's change to default privacy settings last spring
was a major event. This visualization made the point forcefully.

Where will jobs come from?

Score: hit. The economic recovery continues to feature high
unemployment, high underemployment, and high numbers of people who
give up trying to find work. The national unemployment rate of 9.8%
only begins to tell the story; part-timers who want full time work and
other categories push the number of people un- or underemployed to
probably twice that.

How much does the Kindle matter?

Score: hit. While Amazon releases no unit numbers, e-book sales
remain strong, and the Kindle constitutes an important piece of the
tablet revolution discussed above.

When talking about long tails, we clearly have hits and clearly have
infinite markets for niche tastes on eBay, YouTube, and elsewhere.
The question is, can the middle market -- smaller audiences than Harry
Potter or American Idol, more expensive than kittens-on-a-treadmill
videos -- thrive?

Score: maybe. The Hulu experiment, with deepening coverage of back
catalogs, remains ongoing. ESPN's superb 30 for 30 documentaries
would seem to validate mid-market success.

How fast and how momentous is the shift to mobile data?

Score: Really big and really fast. U.S. smartphone market share, for
example, was 21% in Q4 2009; it could be nearly a third by early 2011.
The number of mobile websites increased 2,000% between 2008 and 2010,
for 150,000 to more than 3 million. On Black Friday, mobile traffic
to shopping websites was up 50 times over 2009, much of the traffic
for price comparisons in-store.

Will Google's Living Stories experiment with the NY Times and
Washington Post spawn still more innovation?

Score: miss on Living Stories, which died a quick death. News sources
are aggressively moving content onto tablets, however, often at
ridiculous prices. (See Illustrated, Sports.)

Open records, or open meetings, laws were never intended to broadcast
local, paper-based information to the entire planet. At the same time,
"sunshine is the best disinfectant," as Louis Brandeis so aptly put
it. How and where will different people and groups trade off voluntary
and involuntary exposure of private information for what perceived

Score: Hit: WikiLeaks repeatedly forced this issue, for example.

Will we see new platform wars?

Score: hit. Apple's app store is expanding to tablets and PCs.
Google is bringing out both Android and Chrome, in whatever
complementary or competitive relation to each other. Facebook marches
on, Salesforce is adding database as a service, and cloud vendors
jostle for primacy. Microsoft's Wii-killer (Kinect) sold a million
units in 10 days. So the answer is yes.

How does "real time" filter down to people?

Score: hit. Twitter and the location-based services continue to enjoy
rapid uptake. See here.

In software, who will be left behind? What further surprises still await?

Score: hit. SAP lost a $1.3 billion suit over its use of Oracle's
intellectual property in a support business it acquired. Microsoft
enjoyed considerable success with Windows 7 for the PC, moving 175
million copies in under a year. Microsoft's smartphone hopes,
however, appear to remain in the future, with new Windows phones
selling 2-for-the-price-of-1 soon after release.

Will the Internet of Things continue its low-hype, high-impact trajectory?

Score: hit. The use of smart electric meters in Bakersfield, CA
generated many unexpected consequences, a lawsuit against PG&E among
them. Smartphone-based sensor enablement is accelerating: Amazon and
eBay both released comparison-shopping barcode readers during the
holiday shopping season.

At both public and private universities, the next decade will force
tough decisions to be made.

Score: hit. "Strategic reviews" of programs, majors, campuses, and
funding models are underway at many campuses. New buildings aren't
being built, or are being scaled back. International alliances are
being aggressively pursued, but even these can be problematic:
Michigan State was having trouble filling a class at its Dubai
operation and so offered half-price tuition. Intercollegiate
athletics could be a canary in the coal mine: the University of
California-Berkeley dropped five varsity sports for the 2011 school
year. Rutgers is currently paying off more than $100 million in debt
for football stadium renovations; the team finished 4-8 this year.

Regarding virtualization: just as Descartes split mind and body for
the individual, will some latter-day philosopher distinguish
physically co-located groups and digitally "present" assemblages?

Score: still waiting. Cisco continues to brand "telepresence."
People's identities in Facebook and in Farmville and in Twitter
streams continue to evolve. Most any computing service can be
accessed from a location remote to its origin. But still we lack
vocabulary and deep cognitive understanding of what it means for a
group of people to "be someplace" vs. "be anyplace."

What will we see relative to the need for wireless bandwidth?

Score: hit. A scandal relating to cellular spectrum auctions is
front-page news in India. The FCC is pushing hard to release
additional spectrum in the U.S., but one sticking point among many
relates to rights fees.