Forecast 2010: Sunny skies ahead for High-tech

During the past three years, an incredible number of new computer (hardware and software), networking, consumer electronics and communications technologies and standards have emerged, and all are pushing hard right now for market acceptance. While it is too early to pick the winners and losers, some new technologies, products and markets are clearly heading towards Main Street.

One thing that is least difficult to predict is that the Internet is going to be huge, everywhere, no matter what. The impact of the Internet on the global village it is creating is getting bigger with each percentage point of penetration of the personal computer in the consumer/home market. In the United States, PC penetration in the home has reached the 50 per cent level. In most metropolitan areas this is closer to 60 per cent and in Silicon Valley about 85 per cent of households have at least one personal computer, two or three working PCs is a more likely number in most homes.

While elsewhere in the world, the level of penetration is still ramping up, by 2005 the majority of households in the industrialized will have Internet access and most countries will have transformed into the kind of dot-com-oriented society America has already become. The Internet is clearly the "killer application" the computer industry has been looking for to draw in the bulk of mankind. While the percentage of people who need a computer for writing, playing games and balancing a checking account hasn’t changed much, the Internet has added a level of functionality to the computer which has proven too strong for most to resist.

For some it is e-mail that motivates a PC purchase. Others are drawn by the Internet’s ability to instantly find answers to almost any question that can be posed. Still others, especially those in rural areas away from malls and other city conveniences, find online shopping the answer to their problems. Everyone seems intrigued by online flea markets and auctions. The Internet has turned millions into online stock traders and of course all the kids want to download music and chat their fingers to the bone. With more and more consumers and businesses using the Internet to purchase goods, it would seem difficult to fashion any company that would not be offering its wares and services through the online marketplace by the year 2005.

The increasing value of the Internet is pushing more and more consumers to equip themselves with various online access devices, from desktop PCs to Palm devices to cellular telephones. That in turn is prompting more and more online services and shopping sites. This self-propelling momentum probably won’t stop until the number of consumers who own both a television and a computer is about equal.

And the momentum towards an Internet-dependent economy will only gain speed the sooner high-speed Internet access becomes available economically at the consumer level. In America, cable modem and DSL services are being marketed at between $20 and $50 per month. Most believe the average price point will need to come down to around $30 for mass adoption.

No doubt the Internet will continue to evolve with ever more versatility, capability and functionality. Internet-assisted education will be common in the classroom and Internet-based training and learning will be a popular home use. While still embryonic, Internet telephone services, even some wireless, appear a potential strong growth area in the coming decade. Downloadable music, software and video are destined to become mainstream channels for delivering content. Books and magazines will probably follow this path as the industry is getting close to delivering inexpensive devices that match the legibility of the printed page. Microsoft showed off software to deliver highly readable small text, even italic type, at the 1998 Comdex. It should be mainstream by 2004.

With the demand for Internet access devices continuing to boom, the next decade will likely bring continuous prosperity for the personal computer sector. Besides the large number of new computer users that will be added in the years to come, a large percentage of installed base of 300 or so million existing PC users will be upgrading their systems. Personally, I use the "4X" rule, which calls for replacing the current machine when new models become available with 4 times the processing power at roughly the same price. With new 700+ MHz Pentium and Athlon computes heading for store shelves, the current 180 MHz computer is likely to be replaced in the next six months.

The demand for PCs and other end-user products that can hook up to the Internet will provide the resources needed for continued enhancement of basic PC building block technologies, such as semiconductor and data storage devices. Barring severe financial problems, the semiconductor industry will be able to make it through the next decade at pretty much the same Moore’s Law performance improvement ratio it has demonstrated during the past 30 years.

The chip industry is entering the new Millennium only one year into its latest growth cycle, which is expected to last at least three more years. Most of the technologies, production techniques and tools are already in place to produce microprocessors with 20-50 GHz performance, which can be expected by the end of the first decade. And DRAM memory chips with 64-256 gigabit capacity are quite conceivable using extensions of current technologies and tools. With prospects for several years of growth and profitability ahead, the chip industry is likely to match or exceed the current technology roadmaps.

Breakthrough in new IC technologies are also destined to come along in the next 10 years and they will further extend the chip industry’s ability to extend Moore’s Law, under which the number of transistors on a chip is expected to double every 18-24 months. Some of these new chip technologies have actually been developed during the last five years, such as copper-based interconnects, but they won’t have a major impact until 2004 or later. The really exotic stuff, such as single-molecule transistors won’t arrive in commercial applications until very late in the decade if not later.

Copper-based processing will become mainstream in chip production in the next three years. Coupled with the industry’s ability to reduce design geometries to between 0.13 and 0.04 micron during the next decade, performance improvement of microprocessors and other chips will continue on the same breakneck pace. By 2001, sub-$2,000 PCs with 1GHz or better performance will be commonly available at the retail level.

This year, we have seen the first of a new generation of "system-on-a-chip" devices such as the Geod from National Semiconductor. Such chips have been talked about for a long time, but until now, there has been no viable mass market for them. Now, a new generation of Web appliances is coming onto the market that are ideally suited for system-on-a-chip ICs. Most of these devices don’t need a huge amount of computing power. They are relatively simple devices with a limited functionality, ranging from accessing e-mail, surfing the Web or updating calendars and meeting schedules online. By 2006 or so, a significant portion of the population will carry a Web appliance of some sort. The integration of various computer, communications and entertainment functions into one Web appliance would represent a natural migration for this class of products as consumers are likely to resist having to carry more than two systems. Eventually, a single Web appliance will be able to offer phone, paging, surfing, e-mail, calendar and other functions all in one wireless device.

We’ll also see the integration of digital signal processing circuitry with traditional computing architectures. And even GPS (Global Positioning) would be a natural addition to the functionality of Web appliances so you can also use them as navigation devices on the road. All of this will further drive demand in the system-on-a-chip market which will probably balloon into the next multi-billion IC sector.

Some things will not change much in the coming decade. Like the VW Bug, the traditional desktop personal computer will hang around for a lot longer than many forward thinkers have been saying. That’s simply because many, if not most computer users will prefer to have a relatively powerful desktop computer with a large display on which you can have several tasks running in different windows.

What will change is how PCs look. If the trend of the past year is any indication, by 2005, virtually all new machines will have flat screens. And PC are likely to be offered in a greater variety of interesting forms as the iMac design model is likely to gain momentum in the next decade.

Last month’s Comdex show in Las Vegas saw the emerging of a new generation of odd-shaped computers. Eventually, most of the computer, if not all of it, except for the keyboard, will disappear into the monitor unit. At Comdex, start-up Aqcess showed a computer called "The Cube." Essentially it is a tablet-like system that can double as a desktop unit when put on a stand and a keyboard and mouse are attached. The system is only 2-inches thick and the entire front panel is a touch-sensitive display. Users can also carry it around like a note tablet and use an electronic stylus to write notes. It even has a tiny camera built-in for video conferencing.