News Column

Top Trends

May 2004, HISPANIC BUSINESS Magazine

Scott Williams


Amid renewed corporate and consumer investment, analysts are predicting a wave of innovation and growth in the technology arena this year that could continue to reshape the face of the future.

Spurred by signs of increased spending, particularly for computer hardware and network equipment, the Department of Commerce early this year revised upward its numbers for 2004 business investment in information technology, and Forrester Research projected growth for IT spending to hit more than $775 billion. Meanwhile, consumer spending on electronics continues to grow, pushing new innovations and competition in the industry.

While key tech trends are always difficult to predict, Forrester Research early this year surveyed more than 500 technology experts and found a broad range of projections, including continued momentum in corporate offshore outsourcing, an increased focus on technology to measure corporate performance, more use of wireless networking, and consumer advances in areas including laptops, PCs, and mobile phones.

To help you keep pace and position, Hispanic Business has compiled some of the hottest trends that are likely to affect you and your business in the not-too-distant future.

Sales of laptop computers will increase and claim an ever-larger share of the PC-buying dollar, says Christopher Ireland, principal and CEO of Cheskin, a consulting firm in Redwood Shores, California. Last year, the dollar sales of laptop computers surpassed that of desktops among U.S. retailers at a time when retail computer sales overall jumped 13.6 percent over the previous year, according to The NPD Group, a market-research firm based in Port Washington, New York.

In January 2000, laptops represented less than 25 percent of sales volume. By May 2003, laptops accounted for more than 54 percent of the nearly $500 million in retail computers sold, and some analysts predict demand will increase by 30 percent over the next two years.

Improvements in technological efficiencies and the increased corporate and consumer demand is driving laptop prices down, and that drop in prices is making them even more attractive. Fully functional laptops can now be found for less than $1,000. And as they become less expensive, consumers are snapping them up for new uses: Sales in recent years, for example, have jumped in the summer months as back-to-school shoppers plop down money on laptops for their children.

Increased convergence the technology that combines different types of equipment into a single multifunctional unit has been predicted for years. But the prediction is expected to move closer to reality with the introduction of home entertainment equipment called media centers, media gateways or digital libraries.

Given the fact that an estimated 80 percent of U.S. homes have at least one computer, it's no surprise that manufacturers are looking for ways to diversify, says Stuart Perry, director of electrical engineering for Design Continuum, an international consulting firm in West Newton,
Massachusetts. "There's a lot of energy in hardware manufacturing in trying to get the next big thing inside a home that doesn't look like a PC, but has a PC inside it," says Mr. Perry.

Such systems would be able to share CDs or MP3 files among several computers in a house, along with videos and pictures. An NPD Group survey released in January found that consumers who want to create a home network linking their TVs, DVD players, audio systems and PCs do so primarily to share movies, music and photos.

The trend toward increased wireless access is one factor driving laptop sales, and laptop sales are helping to drive the wireless trend. Already, a wireless home network is fairly inexpensive to set up, requiring nothing more than high-speed Internet access, a computer with wireless capability, and a router, which can be purchased for around $100, says Ms. Ireland. A growing number of executives also want wireless Internet connections when away from the office to transfer data from laptops and hand-held devices to desktops and peripherals.

Bluetooth Wireless Keyboard

By the end of 2004, more than half of all professional laptops will have wireless capability, predicts market research firm Gartner Inc., which estimates the number of users worldwide will total 30 million this year, up from 9.3 million in 2003. Insight Research Corp., which reports on the wireless industry, predicts that $163 billion will be spent worldwide on WiFi services and equipment this year.

Eddie Tapiero, an analyst at Strategy Analytics Inc. in Newton, Massachusetts, sees wireless technology eventually being applied across all fields. The technology is now entering its third generation, he says, which means it will be possible to access data such as streaming video at very high speeds.
So far, Bluetooth, a form of wireless technology designed to allow devices to work together at very short distances, has been used to connect devices like a computer and its mouse or a cell phone and a headset. But soon, makers will start shipping computers with built-in Bluetooth keyboards and mice. And Mr. Tapiero says a recent survey of 1,000 computer users found strong interest in the technology: 54 percent said they were interested in Bluetooth technology and 22 percent were interested in Bluetooth headsets.

On another wireless front, radio frequency identification the attaching of electronic tags to inventory and tracking them with radio and wireless technology has become a growing corporate trend as businesses increase efficiency with just-in-time shipments and lower manpower costs. The technology already is in use at toll booths and gas pumps, and the Wireless Data Research Group, based in San Mateo, California, predicts the market for RFID hardware, software, and services will increase 23 percent from more than $1 billion in 2003 to $3 billion by 2007.

Security and privacy concerns, however, have hindered widespread acceptance of wireless technology, particularly in the workplace. IT managers continue to report that security remains a top challenge as computer viruses, worms, and other malicious attempts to steal data from Internet users increase.

Sony Fingerprint I.D. Kit

Symantec, a technology security firm that tracks data from its thousands of customers and sensors worldwide, said more than half of those it monitors reported a serious security breach in the last half of 2003, up from only one-sixth reporting such problems in the first half of the year. In response, companies are boosting spending on data security, and hardware makers are developing new protections, including biometric applications traditionally limited to facility entrance and exit controls. Sony, for example, has a fingerprint identification unit that can be used to secure access to networks.
Ms. Ireland says more developments also can be expected in options for eliminating the invasion of privacy and lost productivity brought by junk e-mail. "That's a very hot area right now where consumers are so fed up with the levels of spam they're getting at work and home they're actually considering alternative mail providers, and alternative software that blocks it," she says.

Paul Gustafson, senior partner with Computer Sciences Corp. of El Segundo, California, says the Internet community is fighting back with services such as Cloudmark, which allows subscribers to flag spam e-mails so that when it's sent to other users it's automatically discarded.

Cell phones, PDAs and other handheld devices will continue to morph into single units offering even more services. Nextel, for example, the first wireless provider to offer a walkie-talkie in a phone more than a decade ago, recently took its Direct Connect program nationwide, and now offers users the ability to communicate in less than 1 second with any other Nextel user from coast to coast and to Hawaii. The company expects to announce International Direct Connect expansion, which will allow Nextel users in the United States to connect with other Nextel users in Mexico, Argentina, Brazil and Peru, or with users in Canada.

Meanwhile, Nokia in March introduced its Nokia 7610, a phone with a 1 megapixel camera that gives quality prints, and can take up to 10 minutes of video recording with editing capabilities. And, of course, the Nokia phone also offers wireless Internet access. Market research firm ON World, based in San Diego, predicts that 85 percent of mobile phones will be WiFi enabled by 2008.
Not only will phones act as cameras and Internet servers, Mr. Tapiero says eventually handsets will provide access to such services as work data files, video and music downloads, and global positioning system technology.

Challenges that must be overcome, however, include limitations of current cell phone models (requiring users to put the entire screen to their ears), difficulty inputting data (models now require using a 12-number input keypad), limited screen size, and limited data storage. Mr. Tapiero says removable memory sticks and software that predicts what data you're going to enter will make handsets easier to use.

Improvements to screens will not only make them easier to view, but will increase battery life by using less power, adds Mr. Perry. In addition, while most improvements to battery life have come through improved design of integrated circuits, Mr. Perry says a new technology called Organic Light Emitting Device (OLED) will emerge in the near future. OLEDs are self-luminous (they don't use backlighting, or the power to generate it), thinner, offer a higher contrast between colors, and are easier to produce, Mr. Perry says.


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