5 Big Tech Predictions for 2012

With 2011 nearly in the rearview mirror, it seems like a good time to peer into next year's cloudy crystal ball. The technology of 2012 is likely to look fairly similar to what's popular now, but with several notable improvements. There are a number of companies poised to ride a wave of big data to big gains, including several lesser-known players driving this revolution from the inside.

The Internet is (almost) everywhere
The age of dumb machines is nearly over. Ford (NYSE: F  ) wants to sell you a car that's hooked up to the cloud. Microsoft, Apple (Nasdaq: AAPL  ) , and Google (Nasdaq: GOOG  ) are all making serious inroads toward turning your TV into an intelligent entertainment hub. Wristbands can keep track of your health; your coffee pot remembers when to brew; and your refrigerator notices when you're low on milk and places an order for more. That's the essence of the Internet of things, a connected existence that's within the reach of ordinary consumers.

A number of appliances now come with an Internet connection as part of their functionality, and city planning has taken on an increasingly digital tint. While we're not yet at the point where pervasive connectivity follows everyone beyond their cell phones, 2012 should be a major tipping point past which a cell phone and tablet alone no longer cut it. The companies that supply the processing and connectivity hardware should see major growth in this area as traditional computing growth tapers off.

Targeted social advertising booms at the expense of privacy
According to a study released this July, that "tipping point" I mentioned earlier is just over 10% of the populace. By that measure, we've long since passed that point when it comes to giving up privacy for price cuts -- 52% of US consumers don't mind being tracked in exchange for discounts or free swag. That number isn't likely to drop as consumers connect more aspects of their lives to the Internet.

Constant connectivity combined with consumers' willing acceptance of tracking offers major opportunities for companies that have the most options for keeping tabs. Google is embedded in so much of its users' lives that it seems optimally poised to control this increasingly precise flow of information. Its greatest threat comes from Facebook, which could be valued at $100 billion when it goes public next year, but Amazon.com, Microsoft, and Apple also have access to extremely specific user data.

Data analytics becomes pervasive
Wholesale business adoption of analytics has so far been hindered by costs, personnel competencies, and computing capability. Next year could be when these issues are overcome as various analytics operations consolidate under more streamlined umbrellas. IBM (NYSE: IBM  ) is on the vanguard, with several analytics-based acquisitions set to bolster its services in the coming year -- to say nothing of Watson, which has far wider-ranging capabilities than simply schooling Ken Jennings on Jeopardy.

Analytics will be necessary to understand the data flowing out of an ever more connected populace. While some companies now succeed by telling people what they want (think Apple), the majority of future business successes should be highly data-driven, with a deeply statistical and highly granular understanding of their target market.

Mobile data use outpaces carriers' abilities to handle it
Most users haven't noticed this yet, but they will. As of this writing, AT&T, Verizon, Sprint Nextel (NYSE: S  ) and T-Mobile are all implementing plans of varying degrees to throttle or cap their subscribers' data use. The average smartphone user consumed 435 megabytes of data per month this year (well under current data caps), but last year's monthly average was a comparatively minuscule 79 megabytes. This is just smartphones -- each tablet tracked last year used five times the bandwidth of a smartphone. Neither AT&T nor Verizon offers an unlimited data plan for 3G-enabled iPads, and it's easy to see why when you look at the numbers.

What will users do? Boingo Wireless (Nasdaq: WIFI  ) believes many will turn to Wi-Fi connectivity to keep the bits flowing, and with the world's largest hotspot network, it's ideally poised to capitalize. The company points out that Verizon's upgrade to LTE (4G to users) will increase capacity four times, far less than is needed to meet the 39-fold growth of mobile data use over the same time frame.

Futuristically Foolish final thoughts
I have no way to be certain that all these predictions will be true, but they're likely to bear out sooner rather than later. All of these thoughts are based on technology we have right now, which has been progressing toward mass adoption for some time. Tomorrow's great technology already exists today; it's just not mature yet. In that spirit, The Motley Fool has just released a brand-new free report on the companies driving the mobile revolution forward. Their hardware's found in the hottest smartphones and tablets and is likely to play a critical role in powering the Internet of things. Join the thousands who know every detail, and request your free copy now. It's not just for smartphones any more.

Fool contributor Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter for more news and insights. The Motley Fool owns shares of Amazon.com, Apple, Ford, IBM, Google, and Microsoft. Motley Fool newsletter services have recommended buying shares of Google, Apple, Ford, Microsoft, and Amazon.com and creating bull call spread positions in Apple and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 17, 2011, at 11:25 PM, conradsands wrote:

    Sprint is the only U.S. carrier to offer new and existing customers the iPhone experience with unlimited data plans starting at $79.99 per month. Sprint has been recognized as a J.D. Power 2011 Customer Service Champion — one of only 40 companies to have earned this distinction this year. To qualify for inclusion on this elite list, the companies must not only excel within their own industry, but also stand out among leading brands in 12 major industries evaluated by J.D. Power and Associates.

    Consumers are finally noticing that AT&T and Verizon = The Most Expensive Wireless Plans in America. We know where Verizon and AT&T (both in the top 5 for corporate lobbying) get all that money to run commercials 24x7, pay out huge “fat cat” executive bonuses and hire armies of lawyers and lobbyists to push the U.S. market into a wireless industry duopoly -- the American consumer. This is how AT&T and Verizon fashion themselves as brilliant … with their political use of money.

  • Report this Comment On December 17, 2011, at 11:50 PM, conradsands wrote:

    It must be nice to be a deep-pocketed duopolist in this economy. According to the report “Corporate Taxpayers & Corporate Tax Dodgers 2008-10,” two of the 25 companies with the largest total tax subsidies were AT&T at #2 ($14.5 billion) and Verizon at #3 ($12.3 billion). Also, there were 30 corporations that paid less than nothing in aggregate federal income taxes over the same period. These 30 companies, whose pretax U.S. profits totaled $160 billion over the three years, included Verizon. The report states the laws that allow this were not enacted in a vacuum, but rather were adopted in response to relentless corporate lobbying, threats and campaign support.

  • Report this Comment On December 18, 2011, at 6:14 PM, XMFTheGuruEbby wrote:

    Mention Sprint, here come conradsands.

    Great article, Alex!

  • Report this Comment On December 18, 2011, at 7:59 PM, 11Below wrote:

    Even though the marketing departments will try to drive the engineering departments to build 'smarts' into every device we buy, consumers will recognize the costs outweigh the benefits and reject many of these over-engineered devices.

    Take the Nest thermostat (http://www.engadget.com/2011/10/25/ipod-fathers-unveil-their..., please. Programmable thermostats have existed for years that cost one fifth the Nest, plus have much lower operation costs. Yet, they will perform as well, if not better, than the Nest without putting information about your comings and goings in the 'cloud'.

    I don't want to have to 'go off the grid'. I just want to be able to buy devices that perform their primary function and will not report my every move to some marketing department. Especially when it will cost me more so they can do it.

  • Report this Comment On December 20, 2011, at 4:27 PM, Avvasi wrote:

    Kudos to Mr. Planes for recognizing the importance of data analytics. In order for businesses—especially CSPs—to succeed, understanding their network data is key. Analytics enable CSPs not only to understand the network impact of new devices and subscriber usage patterns, but also to plan and dimension network expansion and optimization solutions, while reducing subscriber churn and maximizing revenue. In addition, CSPs can use real-time analytics solutions to ensure good customer QoE and identify opportunities for monetization. But CSPs are going to need more than just analytics to deal with the increase in mobile data consumption. Service providers, content providers, aggregators and advertisers need to work together to deliver an end-to-end QoE consumers are willing to pay for. When revenue sharing is sustainable and fairly allocated, the market will be able to deliver an acceptable QoE.

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