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12 internet predictions for 2012
1. 12 Internet Predictions For 2012
Yes, predictions are hard, especially about the future. But they're fun!
And, sometimes, they can even be useful. They're rarely correct but, perhaps, they help
clarify and hone one's thinking about the future.
And so, in the spirit of enlightened thinking about our industry, here are Business Insider
Intelligence's 12 Internet Predictions For 2012:
Google Will Release A $200 Tablet
Amazon's Kindle Fire changed the tablet game, largely thanks to its price, way below the
competition; It looks like it's going to be a holiday blockbuster;
Meanwhile, Google is fighting a platform war with Apple and has been humiliated on the
tablet front, with high-priced, lower-featured Android tablets getting clobbered by the iPad.
The way Google can grab tablet marketshare, which it needs to do, is to imitate Amazon's
strategy of selling a radically lower-priced tablet at a loss. And, for the first time, it can do
that, since it's in the process of buying tablet-maker Motorola.
Facebook Will Grow Faster Than Anyone Thinks And Hit
1 Billion Users
Facebook already has 800 million users, and many people assume that its growth is hitting a
wall, as it reaches dominance in the big developed markets and it's locked out of markets like
2. China and Russia. But, there is still a lot of room for growth in places like South-East Asia,
India and Brazil, and Facebook's network effect is a powerful thing.
Twitter Will Build A Huge Business
A lot of ink is being spilt on Twitter's product, Twitter's executive turnover, Twitter's usage--
and these are all noteworthy topics to cover. But while all this is going on, Twitter has been
quietly building a huge business.
In the past year or so, Twitter has been tentatively experimenting with various ad formats,
and now it's found the formats that work for advertisers and consumers. 2012 will be the year
when Twitter really scales it up and starts generating very serious revenue.
RIM Will Sell
It's over for RIM. The company's the walking dead. We all know that. The market now has
realized it. At some point someone like HTC or Nokia or someone else will snap it up for its
patents and its enterprise business. (Maybe even ZTE, the Chinese mobile OEM that is trying
to move up the stack and become a consumer brand.)
Apple Will Boringly Grow In Line With Analysts'
Estimates
Apple has had an uncanny
ability to explode past most analyst estimates, as this great chart at right from Asymco's
Horace Dediu shows. This was due to two reasons: analysts underestimated Apple, and Apple
grabbed on to two huge rocketship markets with the iPhone and the iPad.
These two problems are being solved. The iPhone is hitting a natural limit as Android
swallows the market, and while the iPad is ushering in the post-PC era, its growth is probably
3. steadily predictable. And while Apple is likely to come out with some sort of amazing
revolutionary new TV product next year, that's not as big a market as phones and tablets, so
even if it does very well it won't supercharge Apple's top and bottom lines, at least not in the
first year.
This boring prediction is actually risky: over the past few years, the "safe" bet has been that
Apple would overperform, and Apple fanboys have had a lot of fun quoting industry analysts
predicting the demise of, you name it, the iMac, the iPod, the iPhone and the iPad. And
maybe we'll look this foolish a year from now. But we think Apple is in "cruise speed" and
expectations have caught up to this superbly-run and innovative company. So we think Apple
will grow fast and be in rude health in 2012, but, for once, won't deviate much from the
consensus forecast.
Nokia Will Do OK
Many people are expecting Nokia to be the next RIM--an ignominious collapse. And indeed
it has slid a lot. But Nokia is much bigger than RIM and, unlike RIM, its execs aren't asleep
at the wheels. They are pumping out good phones with a good software platform, into one of
the world's biggest phone distribution channels. It will take many years before we see if
Nokia and Microsoft will become a strong player in mobile, but next year Nokia will neither
do outstandingly nor collapse, but do OK.
Amazon Will Post Serious Losses And Outstanding
Revenue Growth
As the price of a Kindle goes down, Amazon's revenue and losses go up
After years in "harvesting" mode Amazon is back in "investing" mode. Jeff Bezos, the most
long-term thinking entrepreneur on Earth, realizes he is looking at some massive
opportunities: building a complete digital media distribution ecosystem; building the biggest
cloud platform of the 21st century; and, last but not least, eating retail.
4. All of these opportunities require upfront investment. But because Bezos has been at this
before, they will pay off. All of the things that Bezos is investing in--below-cost tablets, perks
for Amazon Prime subscribers, data centers for Amazon Web Services--show up as more
revenue and less profits. We think you will be surprised next year by how big the losses will
be and how fast the revenue will grow.
The New Breed Of Vertical, Entertaimnent-Focused
Ecommerce Companies Will Get Huge
With the internet now reaching over a billion people, plenty of vertical markets have reached
a tipping point, becoming big enough to support massive companies focused on one product
category. Examples include Gilt Groupe for fashion, Warby Parker for glasses, One Kings'
Lane and Fab.com for home decor, and others. With these pioneers leading the way,
investment and value creation in this area will proliferate. (Thanks to Silicon Valley demigod
Marc Andreessen for reminding us.)
2012 Will Finally Be The Year Mobile Advertising Really
Take Off, With At Least One AdNet Going Public
Where usage leads, dollars follow...
Mobile advertising is still tiny compared to internet advertising, let alone all advertising, but
it won't stay that way forever: smartphones are proliferating, outselling even PCs, and will
soon reach a scale unseen in the history of computing. This isn't a bold prediction. What may
be bolder is that some mobile ad companies will finally grow huge this year, with a mobile ad
network, probably either InMobi or Millenial Media, going public. Mobile isn't yet taking
over the world, but it's now big enough that some companies are now generating serious
revenue and we'll see more of that.
Rovio Will Open At Least One Store In The US
5. Rovio is (or at least wants to be) the next Disney: it makes money not so much through the
products it's known for (movies for Disney, games for Rovio), but through tons of
merchandise connected to the magic brands these products popularize. Accordingly, Rovio
has an ambitious retail strategy of opening amazing Angry Birds stores, and it will probably
open one in the US in 2012 (though Europe and China are first).
This Year, Enterprise-Focused Startups Will Blow Up
"Enterprise is sexy." You're about to hear that phrase a lot. The stars are all aligned for
enterprise startups. Companies are sitting on tons of cash, not knowing what to do with it,
because of the economy. Trends like the consumerization of IT, the proliferation of new
mobile devices and the cloud have converged, giving a serious opportunity for newcomers to
displace the incumbent enterprise software players. 2012 will be a year of big IPOs (like
Workday) and big financings (Yammer, Box.net) for ambitious enterprise startups.
You Will See A Ton Of Hype Around "The Internet Of
Things"
"The Internet Of Things" is a catchy term revolving around the idea that most everyday
objects around us will be equipped with internet-collected electronics, and this will open up
new applications. This goes from novelty items like scales that tweet your weight
(encouraging you through peer pressure to watch it) to ambitious visions like Jawbone's steps
toward wearable computing. We're not yet sure if The Internet Of Things will be a huge
business or a passing fad, but we're willing to bet you'll be hearing a ton about it in 2012.