Australia: Reviewing Our 2007 Technology Predictions ... And Some Predictions For 2008

Last Updated: 21 January 2008
Article by Paul Kallenbach, Thomas Coghlan and Phillipa Duffy

With 2008 upon us, the time has come to review our predictions for 2007, and make some new predictions for 2008.

2007 prediction: Telstra will be slow to introduce value-for-money 3G services, meaning the capabilities of its 'NextG' network will remain largely untested in 2007. Telstra will nevertheless heavily promote the new network, against fierce competition from Optus. Most Telstra 3G subscribers will be existing Telstra customers, as it is unlikely to woo many 3 or Vodafone customers.

Outcome: In 2007, Telstra's investment in, and advertising of, its Next G network (the name given to its 3G network) was substantial. Telstra claims to now cover 98 per cent of the Australian population and to provide the fastest download speeds of any operator in the country. Its network also offered new content for mobile phone platforms, including coverage of the federal election, Australian idol, and even a live Missy Higgins concert. Despite attracting around 1.5 million Next G customers in2007, Telstra still faced serious competition from Optus, 3 and Vodafone. The growth of Telstra's 3G network also seems to be limited by consumer concerns about the cost of its 3G services. Many commentators believe Telstra's 3G services will only really take-off when carriers and content providers develop capped data plans, so customers do not have to worry about exorbitant bills resulting from excessive data downloading.

2007 prediction: Expect 8 or even 16 core CPUs to be commercially available by the end of the year. This will herald ever more powerful software, for example, automated video editing tools that can create highlights based on visual recognition parameters, such as the viewer's favourite football players. These CPUs will also support the move to parallel computing, where virtual operating systems (think Mac OS X, Windows Vista and Linux) all run simultaneously on a single processor.

Outcome: The rapid move towards multi-core CPUs has continued throughout 2007. While the dual core CPU dominated in 2007, key industry players including Intel, AMD and Sun, released quad and 8-core CPUs, which are likely to increase in dominance in 2008. However, this is only the beginning. Intel has declared as its goal to the release an 80-core CPU by 2011. The development of multi-core CPUs has given more momentum to the move to parallel computing, which looks likely to be used more frequently as processing times continue to shrink with the development of faster and more powerful software.

2007 prediction: The demand for high-quality consumer visuals will ensure that stand-alone graphics cards will live on for at least two more years. Intel and Nvidia (producing CPUs and graphics cards, respectively) will enter a strategic alliance, but will not release a hybrid product in 2007. Ageia will not experience significant growth, and will probably discontinue its PhysX processors, concentrating instead on providing middleware to harness the extreme vector processing power of new DirectX 10 graphics cards.

Outcome: It is widely accepted that the market for stand-alone graphics cards is shrinking, due mainly to the emergence of integrated chip sets. Nonetheless, sales of stand-alone graphics cards remain solid for the moment. Research shows that the market for stand-alone graphics cards increased in the third quarter of 2007, after dropping in the first two quarters. While Intel and Nvidia have an existing patent cross-licensing agreement, and rumours of a graphics alliance arose in June, the two remain in competition with one another as well as with AMD. It remains too early to predict whether the industry will standardise such that Ageia would move to be a middleware company only, although the suggestion remains alive that this will occur. Ageia has persisted with its use of PhysX processors, and has had some success. It has partnered with Dell, Alienware, BFG and Asus, and the technology is being licensed by Sony for its Playstation 3 video game console.

2007 prediction: Prohibitive pricing will see a slow uptake of both HD-DVD and Blu-ray devices in 2007. Blu-ray in particular will suffer from high manufacturing costs, which could give the HD-DVD format a head-start leading into the crucial 2008 year. Regular DVDs will remain the most popular format by far in 2007.

Outcome: While the uptake of HD-DVD and Blu-ray devices in 2007 seems to have been higher than expected, some have considered this to be due to high sales of Playstation 3 units with their integrated Blu-ray player. Moreover, despite the higher price of Blu-ray movies, the Blu-ray format has been outselling HD-DVD. However, it is the recent announcement by Warner that it is dropping its support for HD-DVD (and exclusively supporting Blu-ray) that may signal an early end to the format war. Warner's announcement has also led to speculation that Paramount will drop its exclusive HD-DVD deal, which would then leave Universal as the only studio to exclusively support HD-DVD. Nevertheless, as we predicted, the other result of this ongoing battle between the high definition formats is that most people are sticking with standard DVDs. While sales of high-definition DVDs are certainly growing, DVDs (and DVD burners) remained comfortably the most popular format for 2007, largely owing to their low prices and almost universal capability.

2007 prediction: Major ISPs, longing for the profits of yore, will start to clamp down on VoIP. Packet-sniffing technologies will be trialled in a bid to force users away from cheap services and onto more expensive timed plans. In the short-term, packet-sniffing will fail to prevent users from accessing low-cost VoIP services, but increased research spending could see a successful packet-sniffer as early as 2008.

Outcome: 2007 has seen efforts by major ISPs to diminish the success of VoIP. There have been reports of big telephone companies using patents and lawsuits to destroy VoIP companies. Nonetheless, it is clear that VoIP is continuing to grow, and competition with the major ISPs is on the increase. While packet-sniffing technologies may, to some extent, have the potential to prevent access to low-cost VoIP services offered by non-ISP providers, in 2007, the uptake of VoIP services has continued to grow, and has not been significantly impacted by the introduction of packet-sniffing technology.

2007 prediction: The iPhone will integrate tightly with the popular iTunes online music service, and will see Apple quickly gain ground in the mobile phone market. Due to its proposed cost, and exclusive tie-ups with specific telecommunications carriers, the iPhone will not achieve the same dominance as the iPod, so this lucrative sector will remain hotly competitive for some time yet.

Outcome: Apple's iPhone has gained rapid ground in the mobile phone market. In the US, for instance, Apple sold its one millionth iPhone just 74 days after it went on sale on June 29. In the UK, it has already become the most searched for mobile phone. Despite its rapid ascendance, the iPhone is very unlikely to achieve the same market dominance as the iPod. The market that the iPhone needs to crack is far more crowded and competitive than the portable music player market was when the iPod achieved dominance. The relatively high cost of the iPhone is likely to discourage many people. Further, the iPhone's alignment with specific telecommunications carriers also restricts its access to the market. In the US, Apple is committed to the Cingular network, which limits its potential customer base to 60 million. Nonetheless, the iPhone has managed to achieve a level of hype not dissimilar to the iPod, and has significantly increased competition in the mobile phone market. The iPhone is due for release in Australia in May 2008.

2007 prediction: Windows Vista will fail to achieve significant sales in its first year of release. Businesses, content with their current configurations, will see little reason for the costly hardware upgrades required to switch to Vista. Software released exclusively for Vista will be rare, as developers will be commercially unable to forego the substantial Windows XP user base.

Outcome: There have been mixed reports on Windows Vista's first year of sales; however most commentators have generally considered them to be above expectations. Sales started rapidly, with more than 20 million licences sold in the opening month of Vista's availability. Sales have since slowed, but remain steady, and are widely tipped to increase over time, as teething problems with the OS are addressed. Large-scale success of Vista seems, to some extent, to have been inhibited by businesses being content with Windows XP and reluctant to incur the costs associated with an upgrade to Vista. Many potential home users also seem to be questioning whether an upgrade to Vista is, at this stage, either necessary or worth the effort, given the widely-held perception that Windows XP is solid, tested and works satisfactorily.

And here are our predictions for 2008 ...

Cheap Computer Clash: Eee Laptop Vs XO Laptop

In late 2007, we witnessed the introduction of two super low-priced laptops: the One Laptop Per Child project's XO laptop and Asus's Eee laptop. Both laptops cost less than $500 and offer a range of basic programs that enable the user to email, surf the web, create word processing documents and play music and videos. Additionally, through some promotions, an XO laptop is donated to a person in the developing world when you purchase an XO laptop for yourself.

2008 prediction: Expect the Eee laptop to dominate in the developed world with the XO laptop taking off in the developing world. Sales of the Eee laptop in Australia will soar due to Eee's lower price and superior capabilities, namely its ability to run Linux or Microsoft operating systems, its light weight (0.09 kg) and its greater memory capacity (4 GB). Other laptop companies will drop the prices of their basic laptops to compete with the Eee laptop.

Expanding Opportunities With Virtual Worlds

Virtual worlds, such as Second Life, Active Worlds, ViOS and There, are cyber-based environments in which users interact through virtual everyday activities. Users (called 'residents' or 'citizens') interact with one another through three-dimensional characters (called 'avatars') and in the process socialise, participate in individual and group activities, and buy and sell goods and services.

2008 prediction: The number of people using virtual worlds, especially Second Life, will dramatically increase in 2008. With this growing popularity, companies will continue to raise their online profiles through virtual stores and advertising. Some will follow Westpac's lead by developing their own virtual worlds for meeting, training and knowledge-sharing purposes.

Businesses Avoid Windows Vista

As predicted in Technology News last year, Windows Vista failed to achieve its predicted sales. New features such as the Aero interface and Windows Mail, along with improved security and safety technology, have failed to convince CIOs that there was a robust business case for upgrading.

2008 prediction: Expect to see Windows Vista deployed in some large companies, especially on new hardware, with Windows Vista uptake sitting at 10 per cent of the market by the end of 2008. However, the large majority of businesses will delay migration to Windows Vista because of concerns that Windows Vista Service Pack 1 will not address all of Vista's glitches, and that present hardware will not have the processing power required for Windows Vista. Smaller companies will avoid deploying Windows Vista until Microsoft ceases to support Windows XP.

3G Wireless Technology Preferred Over WiMax

WiMax (Worldwide Interoperability for Microwave Access) provides data wirelessly over long distances. The bandwidth and reach of WiMax gives it the potential to provide greater coverage than WiFi and more cheaply than current 3G wireless technology. In 2007, Big Air announced deployments of fixed WiMax networks in Sydney and Melbourne, while the Federal Government agreed to invest $358 million in a WiMax network to address coverage in rural areas.

2008 prediction: While there will be some increase in WiMax use, do not expect any dramatic uptake of WiMax until 2012-2013. With WiMax technology currently not built into many laptops, 3G wireless networks will still be an attractive option for rural and urban users alike.

Touch-Screen Phones Will Dominate

Since June 2007, Apple's iPhone has been available in the United States, with over 1 million phones sold in the United States by 10 September 2007. Apple's competitors have already launched similar touch-screen phones in the United States with some degree of success.

2008 prediction: In 2008, mobile phone providers such as Nokia, Motorola, Samsung, BlackBerry and Sony Ericsson will launch touch-screen phones in Australia to compete with the iPhone. With the 3G version of the iPhone likely to be delayed until the end of 2008 or beginning of 2009, other vendors' touch-screen phones with 3G technology will dominate in Australia.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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