Tech Trends to Expect in 2009

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Mark Anderson predicts the year's coming developments, from expanded home entertainment to voice recognition to new, lightweight netbooks

Don't be surprised if during the course of 2009 you opt for a bigger TV screen because you're playing more video games and going to the movies less often. You won't be alone, says a longtime watcher of tech trends in his predictions for the coming year.

Mark Anderson is chief executive of Strategic News Service, a newsletter circulated to C-level tech executives. Each year he makes prognostications concerning technology and the economy. Last year he predicted a breakout year for ultramobile PCs, and he said Apple (AAPL) would launch one. The computer maker's MacBook Air came close. In late 2006, Anderson predicted the launch of the first PC with solid-state hard drives, which happened in 2007.
Here's a rundown of his expectations for 2009:

More Screen Time at Home
With consumer spending on entertainment slowing down, consumers will happily spend more to improve their at-home entertainment experience instead of splurging on outings to restaurants, movies, and weekend getaways. That means bigger TV screens to connect to video game consoles for family rounds of Rock Band on the Sony (SNE) Playstation 3, Microsoft (MSFT) Xbox 360, or Nintendo (7974.T) Wii. "People have been investing in bringing these screens into their homes for years, but very few of them are fully gamed up," Anderson says. "So I think there will be a lot of spending by people to get extra entertainment mileage out of those screens at very low cost."

Tight budgets also will foster the proliferation of free or low-cost mobile-phone applications. Case in point: Apple's iPhone App Store on iTunes, where most applications are free—and those that aren't usually sell for $10 or less. Consumers also can get cheap online software for Research In Motion's (RIMM) BlackBerry and phones running the various mobile operating systems backed by Nokia (NOK), Microsoft, and Google (GOOG). "In terms of innovation and investment and purchase, phone applications are it for 2009," Anderson says. "Apple has already made it clear, and it's going to move out to other smartphones, and it's going to be a huge market."

Smartphones are not only going to be running more applications, they'll also be capable of handling ever more complex tasks. Voice recognition will become both powerful, accurate, and common among mobile-phone applications, Anderson says. "After 150 years of waiting, we'll get voice recognition everywhere," he says. Such companies as Vlingo and Nuance (NUAN) will extend their technology into many applications. "By the end of the year, more than a third of mobile users will be using voice recognition without thinking about it," Anderson says.
Personal Assistance

How will tiny cell phones handle all those new tasks? The short answer is they won't. New tools called Internet assistants will help wireless devices send demanding computing tasks via the wireless Web to other computers or to servers—off in what's known as "the cloud." "Someone is going to design a personal assistant—by that I mean a suite of services, customized just for you, that exists on a server farm," Anderson says. Mobile applications such as AroundMe on the iPhone are already pointing the way. "You already see concierge services that tell you, when you land in a foreign city, what the cultural events are in that city, and get tickets for them, and things like that," he says.

Anderson says the assistant technology would combine with tools that track consumer preferences to know what you need, such as preferences when you travel, all triggered by short messages from the user saying something like "business trip, Los Angeles" or "family vacation Miami." "You might have it rent you a midsize car when you travel alone on business, but when you're traveling with the family it might rent a minivan," he says. "You would say, give me a business visit, give me a fun visit, give me a family visit, and it would know what that means." And it all could be done from your mobile phone.

Anderson is also predicting that the wireless industry will coalesce around a new standard known as LTE, or Long-Term Evolution, as it moves to develop faster wireless connections to the Internet.

Mobile PCs will continue to evolve, too, Anderson says. Netbooks, the popular new class of lightweight computers, will grow into an important market segment. "If you're looking for growth rates, the strongest will be in this category, and it will be beyond debate," he says. "Until now, it's been debatable. Everyone will have one. The only question will be what color it is."

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Nokia CEO to favor profit over sales targets

HELSINKI (Reuters) - Nokia will focus on profit development amid a falling cell phone market in which many competitors are cutting prices, Chief Executive Olli-Pekka Kallasvuo told the Financial Times.

"We will continue to combine market share and margins in the right way in order to maximize the bottom line," Kallasvuo was quoted as saying in an interview. This in stark contrast to some of its smaller rivals, like LG Electronics, who have said they will do anything to reach their sales targets.

Nokia lost some market share in the second half of last year as it shied away from some fierce price battles.

Cell phone market is expected to see its weakest year in 2009, with analysts forecasting on average for a 6.6 percent fall in sales volumes.

Nokia expects to weather the fall better than some rivals.

"When times are tougher, people who have stronger positions fare relatively better than the competition . . . So, overall, I believe many of our competitors will have limitations here in terms of their ability to do things," Kallasvuo told the paper.

Nokia has said it aims to increase its cell phone market share in 2009, helped by consumers' appetite for cheaper models.

"The fact that we are commercial in all price points will give us the possibility, if the trade-down happens, to sell another device, which is not always the case with competitors who have a more limited portfolio," Kallasvuo said.

Nokia has bought a dozen companies -- including an $8.1 billion acquisition of mapping company Navteq -- to jump-start its Internet business as growth in the cell phone market stalls.

Nokia has said it was looking for smaller acquisitions to strengthen its Internet services offering, and Kallasvuo told the paper the company does not have "any big pieces missing" in its services portfolio.