Concerns and Predictions for the Tech Industry and Market in 2016

on December 31, 2015

For the last 25+ years, I have written an annual predictions column and have tried to look forward to what might happen in tech in the New Year. Actually, they were less predictions and more like researched observations about what I expected to happen and, in a lot of cases, I drew my observations from products I saw that would be released in that new year or from being inside tech labs and seeing things companies were working on that I believe would have impact in the upcoming year.

But, this year, I am deviating a bit from this tradition. I want to share a few researched thoughts on potential products that could impact us in 2016 but also share some real of concerns I have for the overall tech market in the coming year.

Let me start with four tech products I believe will be interesting in 2016.

Windows 10: Although Windows 10 did not give the PC market a boost in 2015, it should cause a bit of growth in PC sales, especially in IT, next year. This year, PC sales will be off around -10% but most of the researchers and PC vendors we talk to say Windows 10 is the best OS Microsoft has introduced in 10 years and they are seeing serious interest from IT to start upgrading in larger numbers in 2016. If so, that would mean we most likely will only be off -2% next year. PC vendors have finally concluded PC demand will never grow and they see yearly demand for at least the next three years hovering between 285-300 million sold world wide annually. However, I have talked to some vendors who think that, within three to five years, we may see only about 225 to 250 million sold each year. If that happens, there will be even more industry consolidation and we should prepare for a PC world where only HP, Dell and Lenovo survive.

2-in-1s and convertibles start to catch on: By the end of this year, 2-in-1s and convertibles will account for less then 10% of all PCs sold in 2015. Despite heavy advertising from Microsoft and the PC vendors, products like Microsoft’s Surface Pro and others in this category have been slow to take off. Even Apple getting into 2-in-1s last fall has not helped this segment of the market grow. But that may change in 2016. Both 2-in-1s and convertibles are beginning to make more sense for a lot of laptop buyers since they do add a level of flexibility to the computing experience. Interestingly, if the industry pushed them as “future-proofed laptops”, they would get a lot more attention as people now hold their laptops and PC’s well over four to five years. But vendors would never do a future-proofing campaign as they really want people to buy new laptops every 3-4 years. Although they will still be slow to gain any serious market share, PC vendors have a goal of making 2-in-1s and convertibles account for as much as 40% of all laptops sold by 2018-2019.

Android 2-in-1s and laptops hit the market: Although Google is still trying to push Chrome as their OS for laptops, the tide is turning and, by the end of 2016, we should see many Android-based laptops and perhaps even Android desktops on the market. We know that at least one or two Android 2-in-1s will be launched at CES in January but we are hearing that, by next year at this time, Android fans could have many more to choose from. Android on laptops and perhaps desktops face serious technical challenges that Google must address but we hear that is in the works too. These types of products would especially be attractive to a younger audience who cut their computing teeth on iOS and Android and have little interest in Windows or even the Mac OS as they start entering the workforce.

VR and AR gain ground in 2016: I bought myself the $99 Samsung VR Goggles for Christmas. Samsung’s Goggles work only with a Samsung phone and need special Occulus apps to really work. But I found the experience, even with its limited apps, fascinating. The idea of delivering 360 degree 3D images and 3D videos, even at what I would call an entry level, gives users a sense of how immersive VR can be and how both VR and AR represent the future of personal computing at all levels.

It is very clear to me VR and AR is many years away from delivering a great consumer experience that will have any impact on the way people see and interact with the technology. But, if you do try out the Samsung Goggles, you will get a glimpse of our future. On a personal level, I think VR and AR delivering a more immersive computing experience will be a game changer for the overall PC, CE and communications industries. Once they work well, are easy to use and the software development community embraces these products and creates great apps for them, they could rewrite what the computing experience will be in the next 2-4 years. But in 2016, they will have a minimal impact on the tech scene and VR and AR in 2016 will be one in which more building blocks will be laid for an eventual VR and AR experience that could be very cool for everyone.

Concerns

Increased hacking of IT and sensitive infrastructure: For years, I have been predicting hackers would go after our power grid and other parts of the US energy, banking and communications infrastructure. News last week that hackers in Iran stole plans from a power plant in the US underscores this threat. If you have ever had the power go out for any length of time, you know how serious something like this is to businesses and homes. With hackers stealing personal identities and going after banks and even trying to take down the internet, the need for increased security measures to protect these institutions has never been higher. I talked with a major IT director recently and he told me as much as 20% of his IT budget is now allocated to security and protecting his company from outside attacks.

The US government, local utilities, banks and communications companies need to increase their effort in this area and become much more diligent in their protection of US citizens. This threat will not go away and will only get worse. These folks need up their game in this area.

IoT will remain confusing and stifle market acceptance: I am really concerned that the industry as a whole has no real plan to harmonize IoT in a way that really makes it work for consumer audiences. Today, most IoT companies and products act like islands unto themselves and some treat their products as one-offs or standalone models that only have value by themselves. While that may be true in some cases, most need to talk to each other and work together harmoniously in ways that bring them together to deliver a richer ecosystem of features, functions and services. IoT, as it is designed and marketed today, is just too confusing to a mass consumer audience and, if it is to live up to its trillion dollar potential, industry leaders like Apple, Microsoft, Google, Intel and others need to make nice with each other on IoT and start working together to make their devices, products, and even services talk to each other and deliver to the consumer a much cleaner and easier to understand implementation of IoT across the board.