The Cracked Crystal Ball Prediction Roundup

Ah, yes, here we are at the end of another year… and what a doozy it was. I don’t need to tell you about the pain and suffering that marked the year for the biz. If you’re still here and didn’t cash in your chips during the boom, you probably know the story all too well. But why look back? The New Year begins on Wednesday and I’m sure we’re all dying to know what’s in store for us. So, before you head out tomorrow to kill a couple of million brain cells with your cronies, why not gaze with me into the cracked crystal ball provided by so many hard-working analysts. Let’s take a gander at the big predictions for 2003.

Now, mind you, these aren’t predictions I’m making — I’ve got more sense than that. What is now laid before you is a compendium of 14 recent prognostications. Are these predictions any good? Who’s to say? I just figure if I gather enough of them, one will turn out to be true. Right?

Yeah. Right.

Now, without further ado, the predictions:

  1. B2B spending to rise: eMarketer predicts global B2B e-commerce spending will rise to $1.4 trillion by the end of 2003, with growth increasing to $2.4 trillion in 2004.
  2. Music subscriptions to continue to grow: Informa Media says online music subscription services will be worth $2.4 billion by 2007. The first big jump is expected to happen next year.
  3. Wireless banking to gain foothold by 2005. GartnerG2 expects there will be 7 million wireless banking users in the U.S. by 2005, up from 500,000 in 2001. In 2003, 1.2 Americans are expected to be using wireless banking.
  4. Globally, there will be 120 million broadband users by 2005, according to In-Stat/MDR, which predicts there will be 46 million broadband subscribers by the beginning of 2003, and that number will grow to the 120 million two years later. Not to be outdone, the Yankee Group foresees broadband revenues will top $33 billion by 2006 in the Asia-Pacific, European, and Latin American regions.
  5. We’ll see HDTV in 15 percent of U.S. homes by 2008. Strategy Analytics predicts that HTDV-capable TVs will be in 29 million U.S. households by 2008.
  6. More wireless camera phones than digital still cameras will be sold in 2003, according to Strategy Analytics. The research firm also says that 147 million camera phones will be sold worldwide by 2007.
  7. Media spending will increase, along with the Internet’s share of the pie. For a bit of nice news, Global Insight predicts that overall media spending will grow 6 percent by the end of 2003, a big turnaround from 2001’s 6 percent decline. The researchers say the biggest growth between now and 2006 will be in radio, cable TV, and the Internet, with the Net growing a dramatic 16 percent each year.
  8. Online content sales will rise. IDC says we’ll see 47 million consumer buyers worldwide in 2002, and that number will rise to 128 million by 2006.
  9. Classified ads will be a “key driver” in 2003 online ad growth. Jupiter Research (the parent company of this publication) predicts that classified ads spending will top $1.4 billion in 2003. Overall, Jupiter expects 10 percent growth in the online ad market for 2003.
  10. Broadband costs will hinder adoption in the United States. In-Stat/MDR says the high cost of broadband service will hinder growth, with one third of current dial-up subscribers saying broadband is “too expensive.” The challenge, according to the researchers, is for broadband providers to provide Internet users with compelling reasons to switch.
  11. Prognosticators are still bullish on mobile Internet revenues. Frost and Sullivan foresees revenues generated from mobile Internet use hitting $24.6 billion by 2008. The researchers also think that this year will wrap up with over $2.7 billion having been brought in by mobile Net services.
  12. Online fraud will soar to near $500 million dollars this Christmas. Gartner Group says U.S. online retailers will lose about $160 million this holiday shopping season due to credit card fraud. Additionally, researchers say more than $300 million in potentially legitimate sales will be rejected because of wrong suspicions.
  13. We’ll see nearly 1 billion Internet users globally in 2005. eTForecasts predicts that 2003 will open with 665 million Net users worldwide. The researchers also foresee China topping Japan in its number of Net users over the next year, while the U.S. falls behind in per-capita usage. It’s currently ranked as seventh in the world in Internet usage per capita.
  14. Rich media to rise. Jupiter Research foresees rich media ads accounting for up 22 percent of the total ad spend by 2007.

What do all these mean? Dare I make observations? Sure. Why not?

Overall, it seems like most analysts are counting on 2003 to be better than 2002, at least in terms of ad spending. The forms ads take may change (see the predictions on classifieds and rich media), but overall the forecasters see spending trending up. People will continue to adopt cutting-edge technologies, though cost may be a factor when it comes to home broadband adoption. For U.S. companies, one trend to watch for is blindingly obvious — U.S. users aren’t going to continue to dominate the Web in the future. Might we even see a decline in usage in the U.S.?

Overall, the prognosticators aren’t foreseeing anything too surprising — though I’m not sure I really buy the mobile Internet predictions or the ones on online music subscriptions — unless “mobile” includes 802.11b (“WiFi”) in its numbers. Overall, it seems clear that currently (until the next killer app comes along) the Internet is entering a “mature” phase, with growth curves flattening as it becomes just another part of the lives of many people in the world.

Happy New Year!

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