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The December 13, 2006 Issue Provided by System Dynamics Inc.
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2006 Trend Spotting

We are generally so busy looking at what broadband will mean going forward that we don't have much time for looking back. The end of another year seems to be a good time to pause and think about how effectively we spotted some of the trends over the past twelve months. Since the annual Consumer Electronics Show (CES) is one of our barometers for what's coming during a year, we went back to see what we wrote after last year's show and how those areas have fared over the year. Here's a quick look at the areas we highlighted from last year's CES.

  • Whole home entertainment, whole home networking and networked storage: There has been solid progress in all the forms of home networking designed to move multiple streams of HD around the home. We're now seeing IPTV rollouts based on HomePNA, MoCA and HomePlug. For 802.11n we had warned that although "pre-n" products provided benefits in speed and range, "consumers may be unpleasantly surprised if they try to mix and match different products"--exactly what has happened. As we discussed in the article above, the Wi-Fi Alliance has acknowledged the need for action and is stepping up to the task of certifying "pre-standard IEEE 802.11n" products in 2007. At the application level for whole home entertainment, progress has been slow and steady. Whole home PVR and the ability to see any content on any device are in process, but still need some maturing time.
  • Portable media players and content: This has been an area of enormous growth with video added to the iPOD, video on mobile phones, Microsoft's Zune, and services like Slingbox and Orb bringing user's content from home onto their portable media devices anywhere they have a broadband connection. Portable media is hot and it looks like the growth and innovation will keep coming.
  • Viiv and Vista: We all know what happened with Vista for consumers--it was the 2006 event that wasn't. And although Viiv stickers now abound on all the new Intel-based machines, it certainly has not revolutionized anything. This seems to be an area where the hype has exceeded any short-term reality.
  • Google: From all the focus on Google during 2006 and their many forays into new areas, we were glad we decided to spend our "standing in line time" at CES last January waiting for Larry Page's keynote and not for the one by Bill Gates. (We have only so much patience to spend in long lines and one mega-star talk a year is generally our limit for long lines). Advertising, communications and content were all areas in which Google has had major developments. Google's acquisition of YouTube, their trial with MTV (Google inserts clips from MTV Networks into Google's AdSense targeted advertising system) and their agreement with eBay to integrate "click-to-call" advertising using both Skype and Google globally in each company's shopping and search platforms are but a few examples.

What key areas weren't visible to us last January? Looking back, we missed the rapid growth of Internet video--both the appeal of "user generated content" (and social communications more generally), and the rush by traditional media companies to adopt Internet video as a legitimate way to distribute and gain interest in their content.

As we note below, CES is coming soon, so we'll have the opportunity to see where the signals point for trends in 2007.