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Zombie Steve Jobs, and other 2013 tech predictions

Three crystal ball predictions for the technology sector in the year ahead

It’s an annual tradition at IT World Canada for the editorial staff to pause before Christmas and offer up its predictions for the world of technology in the year ahead. Usually we argue it out in a boardroom, subjecting our predictions to the abuse and the mockery of our peers. This year, we’re inviting our readers to join in too.

So in that spirit, here are my three tech-related predictions for 2013. Fire away.

Apple will rejoin the ranks of ordinary companies

While the reports of Zombie Steve Jobs sightings are interesting, the fact is the late Apple (NASDAQ: AAPL) visionary is gone and unlikely to return to this mortal realm (although reincarnation is always a possibility). Until such a day, the bloom is coming of Apple’s rose I believe it’s time for Apple’s return to the ranks of ordinary companies.

It will be a long-overdue return to Earth for a company that seemed to be coasting on past glories even while Jobs and his reality distortion field were still around. And with each successive lackluster iPhone and iPad refresh, the Jobsian hype reservoir is further depleted. Foul-ups like the Apple Maps fiasco don’t help either. Meanwhile, a growing ecosystem of Android hardware partners are releasing ever-more impressive handsets and tablets, like Samsung’s Galaxy S3, which are generating significant market buzz. And hey, maybe Research in Motion will get it right with BlackBerry 10 (they are due, after all).

Now, I’m not saying Apple’s market share is going to tumble or its stock will crash. Apple will remain a dominant force in the technology market. Its magic touch is gone, though. Its product releases will no longer crash live-blogging servers, and it may actually have to be nice to the odd journalist. Nothing lasts forever.

Microsoft will bring Surface to the channel

When Microsoft launched its Surface RT tablet in October along with its new Windows 8 operating system, it was a double channel annoyance: Microsoft (NASDAQ: MSFT) would be competing with its hardware ecosystem partners that manufacture their own Windows 8 tablets, and it would be taking the tablet direct: you can only get the Surface in Microsoft stores or on Microsoft’s web site, not through its retail or reseller partners. The same will apply to the upcoming Surface Pro, the more business-friendly version that runs the full version of Windows 8.

Unsurprisingly, sales of the Surface have been less than hoped for. In Canada, for example, the vendor’s first Microsoft store only opened last month. Analysts have pointed to lack of distribution as a problem. Indeed. As one observer dryly noted, if only Microsoft had some sort of channel that could help them…

I predict that in 2013, they’ll remember “hey, wait, we actually do have something like that” and will release Surface to the channel. While the Surface RT can be left to the retail channel, the Pro would be a good fit for Microsoft’s resellers to position as a business-friendly tablet compatible with their client’s business applications.

Wanting to promote its fledgling retail arm is one thing, but Microsoft isn’t known as a company that leaves money on the table. And if they don’t want resellers to position the Surface Pro as a business-friendly tablet offering to their clients, there are plenty of other hardware manufacturers that are.

We’ll see contraction in the PC business

The PC business is an increasingly difficult business in which to make a buck. Margins are increasingly shrinking, meaning massive volume and efficiency of manufacturing are the only ways to be profitable, and the only way to make real money is by bundling higher-margin peripherals with each PC, plus service and support plans. It’s a high-cost business, requiring heavy investment for minimal return, which is why market leader Hewlett-Packard Co. considered selling its PC business for a fortnight, before beating an embarrassing retreat.

It’s also an increasingly competitive business. Lenovo is biting at HP’s heels for the worldwide market lead, and Dell, Acer, Asus and Apple are all strong players. Add everything up, and it’s a market that’s right for consolidation.

I predict that one of the key players will look to exit the PC market this year, take that cash, and invest it in more profitable, higher-margin businesses. HP didn’t necessarily have a bad idea – it worked for IBM, after all – but they executed it poorly, triggering a stock free-fall and partner backlash. The fundamentals are still there though. Dell is another company that has moved away from its PC roots in recent years, with a heavy emphasis on cloud computing and enterprise services and storage.

There’s an obvious company looking to acquire some PC business as well – Samsung. As a giant manufacturing multinational basically responsible for South Korea’s GDP, Samsung has a fledgling PC business it wouldn’t mind building. It also has the breadth, scale and manufacturing capacity to squeeze as much efficiency – and profit – out of a PC business as possible.

So look for Samsung to buy a PC business in 2013. No reasonable offers refused.

What are your predictions for 2013? Let us know in the comments.