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In-Stat: High-tech Industries will Reshuffle the Deck in 2011
In-Stat 2010/12/15

It may be a bold prediction, but the writing is on the wall, 2011 is likely to be a year that sees the beginning of the end of several technologies and high-tech companies. Despite the economic and industry rebound in 2010 from the depths of recession in 2009, economic and industry growth is likely to be subdued in 2011. While the wallets of consumers and businesses alike are open once again, there are fewer new ones opening. In addition, the pent-up demand caused by the recession has been satisfied and what is left is demand driven by market growth. While this is not a doom-and-gloom prediction, it will spell the end for some in the industry as the world deals with more moderate and sustainable growth. Those that do survive will go on to be the key players through the next few market and economic cycles over the next decade. It may be a bold prediction, but the writing is on the wall, 2011 is likely to be a year that sees the beginning of the end of several technologies and high-tech companies. Despite the economic and industry rebound in 2010 from the depths of recession in 2009, economic and industry growth is likely to be subdued in 2011. While the wallets of consumers and businesses alike are open once again, there are fewer new ones opening. In addition, the pent-up demand caused by the recession has been satisfied and what is left is demand driven by market growth. While this is not a doom-and-gloom prediction, it will spell the end for some in the industry as the world deals with more moderate and sustainable growth. Those that do survive will go on to be the key players through the next few market and economic cycles over the next decade.

"The segments of the high-tech industry that are likely to see the greatest impact are those that have experienced the greatest change and/or the highest number of new entrants," said Jim McGregor, Chief Technology Strategist. "Some key examples include communications, handsets/smartphones, and mobile OS. The push toward 4-G, or more appropriately named IP-based WWAN communications, like LTE and WiMAX has generated a plethora of new entrants ranging from baseband chipsets to network architectures to wireless service providers/carriers. In the chipset segment, we have already seen Intel gobble up the wireless group from Infineon and Broadcom acquire Beceem. And with regard to carriers, several carriers are eyeing expansion, acquisitions and strategic mergers. In addition, Clearwire is on the ropes, and high flying Russian carrier Yota has indicated future support for LTE, neither news is good for the future of WiMAX."

While it is clear that smartphones and tablets are the direction for mobile devices, the vast number of new devices introduced this year and next year is likely to lead to stiff competition that ultimately comes down to price, services, applications and features. Microsoft and Palm, at least as an independent entity, already stumbled in 2010 and more are likely to follow. The prospects for failure in mobile OSs is even higher as 2010 was the year of new mobile OSs, including Samsung’s bada, Microsoft’s Phone 7, and Palm’s WebOS, just to name a few. If history is any indication, only a few OSs are likely to survive. And the list goes on to include many segments of the high-tech industry.

As a result, In-Stat predicts that 2011 will be a year that determines many of the winners between competing technologies and solutions, and new company and technology start-ups will struggle as the industry leaders put their hoards of cash on hand to work for strategic positioning and growth.

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