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In This Issue     Feature: Top Ten Predictions for 2008   Upcoming SNS Events   In Other House News…   How to Subscribe May I Share This Newsletter? About SNS About the Publisher SNS Website Links Where’s Mark?

Publisher’s Note: This issue may be circulated without restriction.

 

Our thanks to everyone who helped to make the SNS New York Dinner a success. You may see pictures of last week’s event here:

 

http://www.tapsns.com/newyork/2007/Photos.html

 

Our particular thanks to our Patrons:

 

Current

The Parthenon Group

Polaris Venture Partners

Waggener Edstrom Worldwide

And one anonymous Mystery Patron --

 

We invite Participants to use our private mailroom to reach others who attended, as with all SNS events, by clicking here:

 

http://www.tapsns.com/newyork/2007/mailroom.php

 

– mra

 

 

» Top Ten Predictions for 2008

 

We had another great time in New York last week, now our third go-round at turning the Waldorf=Astoria Conrad Suites into an SNS brainstorming event, focused mostly on the next year and technology markets.

 

In doing my own homework on making these predictions, I look around at various issues and landscapes, with the perspective that events don’t devolve in a vacuum, that all issues are eventually global issues, that technology markets are directly affected by political, social, and economic climates, and that accurate predicting requires input from these, and other, levels (such as CEO behavioral profiles).

 

I am not going to repeat the entire speech here, for two good reasons:

 

1. I would rather focus on ten specific results, and

 

2. You can now hear and/or see the speech, via streaming video or MP3 file, at the URLs listed at the end of this letter.

 

Something unusual happened this year, in making these “landscape” projections: I ended up with some predictions that may be more important than those in our Top Ten.

 

The one that may mean the most to people in the tech industry is the one that Steve Lohr of the New York Times picked up from that evening, for his own blog:

 

http://bits.blogs.nytimes.com/

 

The global economy has now essentially “outgrown” the U.S., particularly in IT markets.

 

If this were a question, most economists would answer with an unqualified “No.” But my bet is that, for the first time, IT spending will continue to grow so quickly outside the U.S. that a decline in U.S. markets will not pull down total spending.

 

It didn’t hurt that IBM CEO Sam Palmisano came out with an internal memo saying the same thing within hours, according to Steve’s blog.

 

In other words, in the Information Technology universe, the U.S. matters; it just doesn’t matter as much as the rest of the world.

 

And that, if it turns out to be true, is a first.

 

Most large IT corporations now make more than half of their revenues outside the U.S., and most other countries are showing GDP growth rates that will remain robust, even with a dip in the U.S. China now depends more on Europe than on the U.S. (and, interestingly, Europeans fear Chinese trade policies more than Americans do – 59% to 50%). India increasingly is doing work that may be outsourced, at the very high end (doctors reading medical imaging, engineers reviewing structural requirements), or may be destined for domestic or other non-U.S. clients.

 

Certainly, all of these economies would be hurt by a U.S. recession. But large IT companies, for the first time ever, may be positioned to do better than the original mass IT market.

 

What else is worth keeping in mind as we look forward a year? Here are a few more important landscape calls:

 

2008 is the first year of Rapid Response to the Climate Crisis. Just playing along no longer cuts it; now revenues and profits will begin flowing directly to those who are implementing positive change on this issue. This is the largest-scale trend of the year.

 

Interesting corollaries: the Beijing Olympics will probably create a very unintended anti-Chinese–pollution backlash.

 

Oil will find a new floor at $70, the average will be higher, and we’ll see a second run at $100 at, or just after, next year end.

 

Look at the picture of the Fed raising rates, trying to end inflation, and then coming back down when commercial banks failed to follow. Label that picture “Capitulation,” and file it under “The Fed has lost control of the U.S. economy.”

 

The U.S. real estate markets will hit bottom in 12-24 months.

 

Inflation in the U.S. is running much higher than government-supplied figures in the 2% realm; the real figure is probably 5-6%. (Note: the government subsequently published a high-for-them figure of 4.3% for Q4. They’re starting to get it.)

 

And here is one the crowd seemed to like; it’s totally sincere. Given the recent election of Kevin Rudd in Australia, and his first three official actions (signing the Kyoto protocol, announcing one-to-one computing for all students in K12, and creating a new Cabinet-level position in charge of Broadband):

 

In 2008, Australia will be “The New Canada.” (SNS Members will know that this means “a great investment target.”)

 

With the U.S. economy in struggle mode, Europe faring passably, and the rest of the world growing at record paces, here are my Top Ten calls for the coming year:

 

 

Ten Predictions for 2008

1. The Users Revolt. As advertisers focus in on social networking sites, users revolt against this trend, and power shifts in the worlds of Social Networking from owner to user, on issues ranging from Second Life rules and Facebook privacy to Cellphone Billing. Users will gain new leverage.

 

As Facebook fades with its Beacon Blunder, people realize their private/public spaces are for proactive networking, not advertising and privacy invasion. Social networking sites become the hub of all applications; rules tighten. New sites show increased privacy protection, smaller numbers, and tighter segmentation.

 

 

2. The Phone and Web Worlds Will Merge. Or: Walled Gardens Get RoundUpped. Net Neutrality will prevail; carrier and ISP garden walls will fall. Box guys will win over Pipes guys. Handheld makers will win over carriers, a la Apple and Nokia. Samsung, Microsoft, and Google now join them in control.

 

Tribes move from phones to the Web as part of this merger. Question: How do you carry your tribal affiliations around on the Web? Widgets let you put them in Facebook, but ---

 

3. Content Has No Boundaries. Or: By Expanding, the Web Disappears. Content will be provisioned to every device, making the “Web” seem an outdated idea, like “multimedia.” As it moves onto phones and TVs, it becomes invisible. I want the service; I don’t want its history. The separation between print and Web providers becomes outdated. Everyone distributes everywhere.

 

Serious Segmentation of Online Ad Monies Defines the Spend Trend. Start segmenting by user age: the young are surrounded; the older are less tolerant of the din. Ad money will flow preferentially to luxury online and permission-based marketing.

 

4. High Definition Drives a Reversal in Global Standing for U.S. Bandwidth, accompanied by an extraordinary bandwidth increase. Rabbit ratios (MHz/dollar) jump worldwide, with the U.S. suddenly leading in growth rate. Provision of 5-10 Mbps will not be unusual in the U.S., which will see the most rapid bandwidth takeup increase YTY to date, as users start to demand HD-quality video everywhere. The FCC looks foolish and oh so art deco, again. Australia looks smart.

 

5. Fake Internets Become Serious International Liabilities, as corporations pressure countries to behave according to international business norms – specifically, China, Burma, and a handful of other countries with Fake Internets. Fake Nets imply weakness, government failure, and second-class status for these countries and their citizens.

 

If the Net is the source of intellectual fulfillment and economic growth, exactly which citizens don’t deserve access? Real Net access is on the path to becoming an international human right.

 

6. One-to-One Education Is Accepted As the Global Goal. Three-quarters of U.S. school superintendents are planning for it. Maine, Massachusetts, South Dakota, Michigan, Arizona, Utah; England, Australia, Brazil, Mexico, Singapore, Nigeria, India, and China are implementing it. If your state or country is not planning for this, you will be left behind in the 21st century. Using global digitized knowledge to teach and learn will become the only obvious solution in education; the goal becomes connecting every child to this knowledge via the Net.

 

7. U.S. Healthcare (finally) Gets Diagnosed, as a result of the presidential campaign. Reforming healthcare will challenge Iraq as the primary issue of concern during the year. (In 2009, something gets done about it.)

 

Among the problems we’ll find:

• Doctors report to HMOs (and not to patients).
  
  
• HMOs report to shareholders (and not to patients).
  
  
• Insurance companies dictate pricing – often are primarily in the investment business, but don’t share investment profits adequately when they come in, and only report directly to shareholders (not to patients).
  
  
• Government programs are rife with fraud by doctors and institutions.
  
  
• Defensive medicine is practiced at huge cost increase to avoid lawsuits.
  
  
• Over-testing also pays fees to doctors and pays for the equipment, while acting as lawsuit vaccine.
  
  
• There is very little use of IT to reduce costs; the industry can’t even launch proper Electronic Medical Records. Guess what? It makes more money re-creating them each time you switch.
  
  
• No one reports to the patient, and almost No one gets paid for good health outcomes.
  
  

 

Exhibit A: There is no penalty for killing your patients.

 

A few answers: cap legal awards, make doctors directly responsible to patients, and remove HMOs and insurance companies from the mix, since they contribute nothing and take much.

 

8. CarryAlongPCs Become Commonplace. Small personal computers (UMPCs/micro notebooks) gain their own as a category as these new “CarryAlongs” are introduced by major players – a trend expanded by the iPhone and currently best served by the Samsung Q1.

 

9. LEDs See a Meaningful Shift into Industrial/Commercial/Residential Use. Pricing drops aggressively, and new uses and conformations of LEDs become available.

 

10. 2008: The Year of the First Production and Commercial Sale of Alternative-Energy Cars in the U.S. Yes, we had the much-missed EV-1 a decade ago, and lots of golf cart-like things since, but this will be the year of never-turning-back on commercial alternative-energy vehicles. While GM dawdles over the Volt, Honda will deliver the hydrogen-powered FCX Clarity in California. The all-electric Tesla Roadster will be produced and silently speeding down our streets, with more for sale and new orders taken for its WhiteStar 5-person sedan. New electric sports cars from Altairnano, Phoenix Motors, and other California brands will make seeing an alternative-energy car on the road something new, and more common.

 

SmartCars will also be a hit this year, selling out the U.S. allotment, starting January.

 

_______

 

 

 

For those who care about such things, we keep track of accuracy every year. Here are the results since we began our New York Dinners, and our Top Ten Next-Year Predictions: For 2007, 98%; for 2006: 96%; for 2005: 97%.

 

Summary: A cumulative score of 97% since 2005.

 

 

Streaming video of this talk is available at:

 

mms://www.tapsns.com/NY_Dinner_2007_512K_Stream.wmv

 

The MP3 version is at:

 

http://www.tapsns.com/media/nydinner2007/nyd-2007_128K.mp3

 

 

 

Your comments are always welcome.


Sincerely,

Mark R. Anderson

CEO
Strategic News Service LLC              Tel. 360-378-3431
P.O. Box 1969                                    Fax. 360-378-7041
Friday Harbor, WA  98250  USA         Email: sns@tapsns.com

 

» Upcoming SNS Events

 

• Sixth annual Future in Review (FiRe) Conference, May 20th-23rd, 2008, at the historic beachfront Hotel del Coronado, San Diego. Named “best technology conference in the world” by The Economist, FiRe is a unique, world-class source of critical information on major trends in global technologies and markets, discussed by those who make and profit from them. To learn more and to register, go to www.futureinreview.com.

 

Special thanks to Hewlett-Packard and Mohr Davidow Ventures

for their generous support as Silver Sponsors of FiRe 2008:

 



 

 

And highest appreciation to The Rodel Foundations

for their continuing FiRe sponsorship in 2008:

 



 

 

 

 

» Links to More

• SNS New York Dinner Centerpiece: Mark’s “Ten Predictions for 2008,” presented December 12th, 2008, at the Waldorf=Astoria, New York:
  Watch the video (Windows Media), download the audio (MP3), or view the gallery.
  
  
• SNS West Coast Dinner Centerpiece: Mark’s centerpiece comments, presented September 14th, 2006, at the Intercontinental Mark Hopkins San Francisco Hotel: mms://www.tapsns.com/wcdinner2006.wma.
  
  
• View all SNS media content released to date: http://www.tapsns.com/fire2007-media.php
  
  
• SNS Silver Bullet and Brass Ring Awards: To view a list of recipients, go to: http://www.tapsns.com/members/silverbullet.php
  
  
• SNS Blog: Visit this SNS forum at www.tapsns.com/blog, and add your own comments. If you’re a blogger, email sally@tapsns.com to be added to our blogroll. You are welcome to link to ours.

 

 

 

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» About the Strategic News Service

 

SNS is the most accurate predictive letter covering the computer and telecom industries. It is personally read by the top managers at companies such as Intel, Microsoft, Dell, Hewlett-Packard, Cisco, Sun, Google, Yahoo!, Ericsson, Telstra, and China Mobile, as well as by leading financial analysts at the world’s top investment banks and venture capital funds, including Goldman Sachs, Merrill Lynch, Kleiner Perkins, Venrock, Warburg Pincus, and 3i. It is regularly quoted in top industry publications such as BusinessWeek, WIRED, Barron’s, FORTUNE, PC Magazine, ZDNet, Business 2.0, the Financial Times, the New York Times, the Wall Street Journal, InformationWeek, Reuters, and elsewhere.

» About the Publisher

 

Mark Anderson is CEO of the Strategic News Service™. He is the founder of two software companies and of the Washington Software Alliance Investors’ Forum, Washington’s premier software investment conference; and has participated in the launch of many software startups. He regularly appears on the CNN World News, CNBC and CNBC Europe, Reuters TV, the BBC, Wall Street Review/KSDO, and National Public Radio programs. He is a member of the Merrill Lynch Technology Advisory Board, and is an advisor and/or investor in Ignition Partners, Mohr Davidow Ventures, Voyager Capital, and others.

Mark serves as chair of the Future in Review Conferences, SNS Project Inkwell, The Foresight Foundation, and Orca Relief Citizens’ Alliance.

Disclosure: Mark Anderson is a portfolio manager of a hedge fund. His fund often buys and sells securities that are the subject of his columns, both before and after the columns are published, and the position that his fund takes may change at any time. Under no circumstances does the information in this newsletter represent a recommendation to buy or sell stocks.

» SNS Website Links

 

For additional predictions and information, please visit:

The SNS website: www.stratnews.com

SNS Blog: www.tapsns.com/blog

 

SNS Media Page: www.tapsns.com/media.php

 

SNS Future in Review (FiRe) Conference website: www.futureinreview.com

SNS Members’ Gallery: www.tapsns.com/gallery.php

SNS Project Inkwell: www.projectinkwell.com

Orca Relief Citizens’ Alliance (www.orcarelief.org), a 501(c)(3) non-profit effort to study and reduce Orca mortality rates, supported largely by technology workers. Contributions may be sent to: ORCA, Box 1969, Friday Harbor, Washington 98250.

» Where’s Mark?

 

On January 18th, Mark will give his annual Predictions talk to the Washington Software Alliance TAG group in Bellingham, WA, at noon, at DIS headquarters. (Last year was a record turnout, so sign up early.) On March 11th, he will be keynoting the SVB Financial meeting at the Hotel Sofitel, Redwood City, CA. On March 20th, he’ll be speaking at the fifth annual SNS London Dinner, on technology and the global economy. On April 26th and 27th, he will be speaking at the Building Alliances conference in Dubai. May 20th-23rd, he will be hosting the Future in Review (FiRe) 2008 Conference at the Hotel del Coronado in San Diego.

 

In between times, he will be skiing along the peaks and ridges of his favorite mountains, the Utah Wasatch Range, enjoying family, friends, and the best snow on the planet.

 

 

 

“Strategic News Service,” “SNS,” “Future in Review,” “FiRe,” “SNS Ahead of the Curve,” and “SNS Project Inkwell” are all registered service marks of Strategic News Service LLC.

 

ISSN 1093-8494