[Technology Report]
Megatrends Of The Future Will Feed Off Industry Hype
Industry analysts see key gains in store for several market sectors, thanks to revolutionary leaps in technology.
Afaltering economy hasn’t slowed the electronics industry. According to many independent market research organizations and other sources, most market sectors will experience strong growth over the next five to 10 years.
In fact, what has become a digital universe is expanding more rapidly than any original estimates. Updated projections based on research by IDC suggests that with a compound annual growth rate of almost 60%, the digital universe is ballooning at a faster clip. All told, it’s expected to be nearly 1.8 zettabytes (1800 exabytes) in 2011, a tenfold increase over five years.
This expansion largely will come as a result of worldwide shipments of digital cameras, digital surveillance cameras, and digital TV. Another aspect of this extraordinary growth is all of the digital information generated about the populace on a daily basis, which now surpasses the amount of digital information individuals actively create themselves.
WIRELESS EVERYWHERE Virtually everyone tracking the wireless market sector says that the transition from wired to wireless applications is only beginning. Global mobile phone use passed the 3 billion mark—equivalent to half the world’s population—in 2007 thanks to the booming cell-phone markets in China, India, and Africa.
Meanwhile, the introduction of new models like the upgraded versions of Apple’s iPhone, which accounted for about 10% of total smartphone sales in 2007, and Wi-Fi-enabled digital cameras from Nikon and Panasonic expected to arrive this spring will push the market even higher globally.
Popular online applications, such as social networking, are also going mobile. Nielsen/ NetRatings says that about 45% of active Web users have already visited these Web sites via mobile devices.
Adoption of next-generation specifications is expected to substantially boost the market for wireless multimedia networking, prompting growth in excess of 50 million wireless network devices by 2010, according to Parks Associates (Fig. 1). Parks predicts annual sales of wireless multimedia-capable devices, including home networking gear, personal computers, and fixed and mobile consumer electronics, will grow from 2.5 million units in 2006 to nearly 52 million by year-end 2010, due largely to standardization in the market.
“Multiple factors are driving the move by both manufacturers and service providers in embracing wireless connectivity,” says Kurt Scherf, vice president and principal analyst with Parks Associates.
“Service providers are looking for greater ownership in developing home-networking solutions. Operators need to reduce CAPEX (capital expenditure) costs in deploying home-networking equipment. New content services are on the rise. And, consumers are invariably a factor in eliminating cables,” says Scherf. “These are all positive signs that the IEEE 802.lln and WiMedia solutions— among the many home-networking options—will continue to drive growth in new home-networking applications.”
Infonics Research says worldwide sales of wireless local-area network (WLAN) equipment, including independent and dependent access points and WLAN switches and controllers, hit $1.9 billion in 2007, up 20% from 2006, driven by the increased rollout of enterprise WLAN and an acceleration of upgrades to the IEEE 802.11n standard. Infonics forecasts that the WLAN market will reach $3.4 billion in 2011.
WiMAX also shows good growth, at least outside the U.S. The WiMAX Forum is projecting more than 133 million WiMAX users globally by 2012, a forecast based on the results of an independently commissioned study published in April. Data from the study estimates that approximately 70% of WiMAX users will access broadband Internet services via mobile and portable WiMAX devices by 2012.
DEFINING 4G The biggest transition in wireless will be to 4G, which is only beginning to take shape. The International Telecommunications Union (ITU) is expected to release the official definition of wireless 4G later this year. But In-Stat, another market research group, expects the primary 4G technologies to include Long Term Evolution (LTE), Ultra Mobile Broadband (UMB), and IEEE 802.16m WiMAX.
“Companies are extremely uncomfortable talking about 4G technologies since the ITU has not defined 4G yet,” says Gemma Tedesco, an In-Stat analyst. “However, each of the contending 4G technologies has a cheerleader, with Ericsson touting LTE, Qualcomm preferring UMB, and Intel toting 802.16m WiMAX.”
Much of the wireless boom is being pushed through the incredible growth of consumer electronics (CE). Total U.S. factory-to-dealer sales of CE topped $160 billion in 2007, an 8% increase over 2006, according to the Consumer Electronics Association (CEA), with another increase in CE revenues in 2008 expected to top $171 billion.
“CE industry sales have exceeded our expectations once again, despite a challenging domestic economic situation,” says Gary Shapiro, CEA president and CEO. The average U.S. household spent $1405 on CE products in the past 12 months, $120 more than the year before, according to CEA research.
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