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Technology > Tech Biz
Predictions to take to your broker
Our columnist consults tea leaves, palms, and crystal balls to offer up a glimpse of the future.
December 27, 2004: 2:06 PM EST
By Eric Hellweg, CNN/Money contributing columnist

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BOSTON (CNN/Money) - The years, they go by so fast. Just when I was getting used to the currency of the phrase "Boston Red Sox, World Series Champions," the calendar now tells me that I must say "last year" when referring to it. Alas, 'twas ever thus.

In the world of technology, a calendar year almost feels like a dog's year, with so much happening in the span of 365 days. From my perch, blessed as I am to speak with leading figures in the technology industry, I feel uniquely qualified to offer predictions on what may pass in 2005.

Before I do, however, let's look back at how I fared with my predictions for 2004. I didn't do as well as I did in 2003, when I went three for four.

Last year I batted an even .500 spotting tech trends. I was right that voice-over-Internet-protocol technology would explode, and it certainly has, with everyone from upstarts to AT&T offering the service. I was right that offshore outsourcing would become an election issue, although it wasn't nearly as big as John Kerry hoped.

But I was wrong when I predicted that the Nasdaq would finish the year at 2,500, with Google leading the way. Google led the way, all right, but a stop-and-start recovery held back the bulls.

I was also wrong when I said 2004 would be the year of the great digital-music shakeout, with several companies going out of business or consolidating. I still believe that will happen, but 2004 was a little too early.

Without further ado, then, my predictions for 2005:

2005 will be the Year of the Fox.

Fresh from its marketing coup, in which users of the alternative browser bought a full-page New York Times ad congratulating the program's developers on their version 1.0 release, Firefox will make great gains in 2005. I predict it will end 2005 with at least 15 percent of the worldwide browser market.

Why? A couple of key reasons. First, it's a story that journalists like me can't resist: A scrappy, up-from-the-underground technology threatens an established giant. That will garner the browser a lot of free press.

More important, Microsoft still hasn't conquered the security concerns that plague its Internet Explorer. With Firefox built on a more secure foundation, users worried about security will flock to the Fox. I can't wait to see how Microsoft responds.

Netflix, a division of Amazon.

I've been thinking about this since about November, when word of Amazon's interest in the online DVD rental space was confirmed by Reed Hastings, CEO of Netflix. And now, with Netflix trading near its 52-week low and with its market cap around $600 million (compared with Amazon's $16 billion ), the time is right for Bezos & Co. to consider a purchase.

Not only would they be buying 2.5 million new members (with lots of Amazon-related upsell opportunities), but they'd also be buying into a network of nationwide distribution points, which could give Amazon some interesting opportunities to extend the deadline from which it can promise next-day delivery during the holiday season.

Cell phones start to creep into digital-music share.

2004 will likely be remembered among certain crowds as the year of the iPod. On the digital-music front, I think 2005 will be the year when portable music comes to the cell phone in a big way.

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I'm not talking tipping-point-type acceptance, but I think you'll start to see more cell phones shipping with hard drives, meaning that consumers can carry one less device in their pockets. And that always wins.

Motorola announced it's teaming up with iTunes to launch an iTunes-ready phone in 2005, and Vodafone launched Musiwave, a cell-phone-based download service, in Europe this year. Look for more deals like the Motorola/iTunes partnership, and look for people to begin loading their cell phones with digital music.

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