More Tech Predictions for 2015

In last week’s column, I provided my top five predictions for the New Year. What follows are five more around key themes, technologies, and product categories I believe will also be important this year.

Prediction 6: Wearables Will Make Advances, But Remain a Modest Market

The wearable market will undoubtedly make big advances in 2015, but I still believe the overall size of the market will remain relatively modest at around 40 million units. The Apple Watch will likely sell reasonably well (in the 10-12 million unit range), but I don’t expect it to have the same kind of market-making impact as the iPad did in its first year.

The fundamental concerns regarding the wearable market still remain: duplication of smartphone functionality, unproven form factors, small screen sizes, battery life, reliability and accuracy of sensors, and more. In addition, as I’ve discussed in the past, wearables are significantly more intimate devices than anything we’ve used previously. As a result, there are important personal questions that remain about fashion and taste, as well as privacy and security.

Over the long run, I believe there is a much larger opportunity for wearables, but we need to get past thinking of them as simply the next device evolution from smartphones. Ultimately, trying to apply smartphone-like analogies to wearables—for example, focusing on platforms, app stores (or even the app model)—will prove to be flawed as these devices need to offer their own unique form of value. As the next iteration of a smartphone-like mobile device, they’re a solution in search of a problem. But, as uniquely defined devices that offer unparalleled access to real world data from our bodies and the environment around us, they represent an intriguing glimpse into the technology of tomorrow.

Prediction 7: Following Tablets, Smartphone Shipments in Developed Markets Will Decline

Though it likely eked out some modest unit shipment gains in 2014 on a worldwide basis, the tablet market really hit the brakes in the US and other developed countries last year. For 2015, I expect to see a relatively similar phenomenon for smartphones. Smartphone growth was robust in 2014 all over the world, just as tablet growth was in 2013. Now however, much of the US market has already upgraded to bigger phones like the iPhone 6 and 6 Plus, as well as the Galaxy Note and other phablet-style phones. As a result, the need/desire to upgrade is likely to be relatively modest this coming year.

In addition, I believe the growth in larger screen phone sales, in conjunction with many of the new pricing plans offered by US carriers, will also end up leading to longer lifetimes for many smartphones. Given how mature and relatively saturated developed markets already are, these long lifetimes will also act as a deterrent to new phone sales in 2015.

Prediction 8: The Next Version of Big Data Will Be All About You

One of the most interesting outcomes of the new wearables market is the amount of information being generated by and about individuals. Health and fitness-based wearables, in particular, can spew out thousands of data points a day for your viewing pleasure (or sharing pleasure, if you so choose). Combined with the amount of personal tracking of web browsing, online purchases, document creation and editing, social media interactions, and more that’s already going on, and you end up with an enormous set of personalized data that will either make you shudder in fear or giddy with self-realization potential.

Either way, it’s unquestionably fodder for data mining, classification, comparison and more—exactly the realm of traditional enterprise big data. Of course, as with many big data efforts, the analysis results may not always prove to be that useful. Regardless, that’s not going to stop companies from trying to paint interesting new perspectives about you based on all the data now available.

Prediction 9: Biometric Sensors Will Make Passwords Start to Go Away

The security hacks and blunders of 2014 have proven without a doubt basic password protection is well past its prime. The challenge now is to find the right kind of solution that’s both secure and relatively straightforward to use. The obvious answer comes via biometric sensors, which offer uniquely identifiable, effortlessly created bits of digital identification everyone should be able to comfortably use on a regular basis.

There are still some cost and accuracy issues that need to be addressed, as well as tradeoff questions about what types of biometric sensors offer the greatest security versus those that offer the greatest convenience. Nevertheless, I expect to see wide adoption of fingerprint readers, iris scanners, palm vein readers, facial recognition-enabled 3D cameras, and more in a significant percentage of new devices shipped in 2015. This in turn will allow passwords to start fading as our primary means of secure access to our devices and our data, and enable multi-factor authentication methods that use biometrics as at least one of those factors to start rising this year.

Prediction 10: Instant Gratification Web-Based Services Will Consolidate (and Possibly Implode)

Given the apparent “Uber-ization” of the entire world, it may seem ridiculously naïve to question the “sharing economy” and all the other instant gratification services the venture capital world seems so obsessed with right now, but I can’t help feel this emperor has no clothes. Sure, there’s an opportunity to create new 1:1 markets where people can leverage certain assets they own (like cars and homes) and mobile services can bring buyer and seller together quickly and conveniently. However, that doesn’t mean it’s going to radically change everything, especially when some of these services flaunt well established laws and regulations all around the world.

Are there some old school businesses in dramatic need of a refresh? Heck, yes, and there’s no question the taxi business should take some serious lessons from the likes of Uber and Lyft and build an app of their own. But the potential for existing industries to “re-disrupt” the disruptive business models currently being deployed by these hot new startups seems very real. Plus, looking back at something like eBay, which offered similarly disruptive business models about a decade ago (and arguably was, and is, the first “Market 2.0” company), it’s easy to see that one of these instant gratification “sharing economy” companies could survive but it will likely need to swallow up many competitors in order to do so.

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Bob O'Donnell

Bob O’Donnell is the president and chief analyst of TECHnalysis Research, LLC a technology consulting and market research firm that provides strategic consulting and market research services to the technology industry and professional financial community. You can follow him on Twitter @bobodtech.

19 thoughts on “More Tech Predictions for 2015”

  1. Isn’t biometric sensor ID more a standards issue than a hardware issue ? My authenticated, bluetooth-enabled smartphone has been laying within range of my bluetooth-enabled PC for the better part of 10 years now, yet my PC and its apps still want me to login. To each and every one individually.

  2. “Wearables are a solution in search of a problem.” I’ve always thought this was the fundamental truth about wearables, but manufacturers keep producing an endless stream of products that even the few people who buy them soon put in a drawer and forget. Has Apple identified an actual market need for this concept? I guess we’ll know soon enough.

  3. #6 and #9 point towards contradictory outcomes. I firmly believe that the killer app for wearables is protection from identity theft through biometric authentication. Maybe the tech still isn’t there but once it reaches a workable level, wearables will explode. Even folks who hate wearing a wrist device will get one if their banks and credit card companies tell them that they won’t eat losses from fraud if you don’t have one.

      1. Not very convenient though if you have to pull out your phone every time you need to authenticate your identity. I’m talking on-the-fly authentication so you can just walk through without presenting a barcode when you enter a concert hall (or jetway), or a real-time verification request whenever a large transaction is being attempted by someone claiming to be you.
        Right now, my credit card texts my phone when a card-less purchase is made (not attempted). I would want that process to be made more secure so that the purchase doesn’t get approved without my authenticated clearance. That would be unwieldy if I have to scan my thumb each time. A watch would already have my identity authenticated, I would just need to tap on it to signal approval.

        1. That would be cool. Now if we can only do that without being LoJack’ed. I was referring to much more mundane applications like picture, fingerprint, and iris readers on laptops and such.

  4. “There’s a potential for existing industries to “re-disrupt” the disruptive business models.” Not Uber. They are so aggressive they make Amazon look like Tony Timid and Travis Kalanick will make the first trip to Mars before he’ll allow anybody to disrupt Uber.

    1. Uber’s business model is based on generating profits by evading the taxman, the safety inspector, and the insurance underwriter. These are three people that you cannot hide from forever. Once Uber is forced to comply with these there gentlemen’s demands, especially the one about properly licensed and insured drivers and vehicles, then they’re just a cab company with an efficient cab hailing system. A system that some smart fella can duplicate for old-line cab companies.

        1. Haven’t you seen enough tech bubbles in your lifetime? I would never base a start-up’s chances of success on the ‘valuation’ placed by early investors. The incentive to ‘accidentally’ overvalue a start-up’s worth is just too great.

    2. Taxi transportation is a commodity business, which means that it always results in fierce price competition that prevents drivers from making a living wage. In practice, that is usually avoided by erecting (artificial) barriers to entry that result in very high medallion prices. If Uber succeeds in destroying the barriers to entry in order to get into local taxi markets, then that means that the next guy (Lyft and others) can also get in.

      There are many other risks for Uber:
      1) the vested interests may strike back (taxi commissions, tax, safety, insurance)
      2) Uber’s service and app may not be sufficiently differentiated to demand premium pricing and to be safe from copycats
      3) the premise that the US/world is one taxi market with one winner may just be flawed
      4) Uber’s aggressive legal strategy may run into the sand because of adverse publicity (i.e. they seems to be losing the benefit of the doubt)
      5) the “Robin Hood” narrative — they’re about returning money to the public — does not make sense in the light of a $41bn valuation (which is all about keeping the money)
      6) Uber would need a strong brand to become a truly valuable business, instead their brand is getting tarnished by abrasive business tactics towards drivers, passengers and authorities
      7) the element of surprise in Uber’s business tactics is rapidly disappearing and their future adversaries will be better prepared that their past adversaries

      For Uber to be worth $41bn, an awful lot of things need to go right and I’m not sure they are heading in the right direction.

  5. I think the real potential for wearables is in the digital ID field. It is digital ID that is out and always ready. Combine a passcode on the watch, with a known fingerprint from a paired smartphone, that could be pretty decent two factor authentication. So long as you are wearing your watch, doors unlock, lights go on, computers unlock, etc, etc.

    1. Better yet, authentication through some type of bio scan performed by the back of the watch. Don’t know if that’s possible now, but I bet some smart people will come up with it soon.

      1. Looking at the sensor Apple has put on the back of the watch, it appears to be pretty high end. I have not seen such a sensor on pictures of other watches. So, maybe?

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