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Adam's background marries extensive hands on company building experience with a successful track record as a venture capitalist, investment banker and director of both private and publicly-held technology companies across North America. Adam's extensive knowledge of the Canadian technology and... More
  • Five Gadget Trends for 2011: From Content to Devices to 3D Portables 0 comments
    Dec 29, 2010 12:57 PM | about stocks: AMZN, AAPL, BBRY, HPQ, SNE, NTDOY, GOOG, MSFT
    1. Devices move to cloud storage and multiple interfaces as content providers and device makers each look to lock in their positions. The two fronts in this important battle are made up of platform specific manufacturers, such as Apple, who are looking to sell devices and content via device specific storefronts and providers such as Amazon who are looking to sell content through integrated products that support multiple devices.  The iPad and iPhone are examples of the "Apple" approach - where apps and stats run only on Apple devices sold by iTunes storefronts populated by Apple approved vendors.  On the other side we have what I will call the "Amazon" approach which offers content on any device (apart from the Kindle they support Android, BlackBerry, iPhone, iPad, PC and browser based devices) and that allows the user to access data anywhere, at any time, on any device - and to keep the devices syncrhonized with each other dynamically through the cloud based "WhisperNet".  Amazon should look to expand this beyond books to games, music and video. Beyond these platforms, we also see Microsoft focusing on the "Apple" model with Xbox Live (including Zune, Windows Phone 7, Games for Windows Live and the Xbox 360) vs. the Netflix model that is more akin to the Amazon model by supporting all consoles, devices, handhelds and PC's.  On the gaming front we see services such as Valve's Steam service for gaming as the player to beat and while it is presently PC and Mac only - we see an expansion of this to the PS3 and other devices coming for 2011 (because it makes sense!).  We also see a greater proliferation of streaming devices including the OnLive gaming service (perhaps joined at some point by a streaming Steam service).  Ultimately, the platform independent approach is more compelling for the end user and it provides more value for consumers who are increasingly managing more than one device from more than a single manufacturer.

    3. Amazon drops Kindle 3 Price to $99 and launches Color Kindle 4:  While the world seems to be focusing on the sexy but pricey touchscreen tablet devices - Amazon has quickly come to dominate the e-book market by offering a relatively low-tech alternative Kindle 3 for $139.  Since launch, we believe that Amazon has sold over 15 million Kindle 3 devices making it one of the fastest selling consumer devices of all time.  While the Kindle can surf the web, play some basic word games and post comments on twitter and FaceBook - these additions to the core Kindle were defensive in nature, merely talking points to put up against the threat of the iPad.  In the end, price trumps functionality and Kindles went flying off of Amazon's warehouses until there were no more to sell.  The real profit in the Kindle is of course in the selling of the digital books and the content, and Amazon has done an excellent job with the experience.  In fact, by our calculation, Amazon could give the Kindle away for free with any purchase of an annual subscription to the Wall Street Journal (at about $15 per month) and likely break even.  Add in the purchase of even a few more books and subscriptions and Amazon can make money by giving the Kindle away.  Now that's a model!  We don't think that Amazon will go that far, however as tablet devices proliferate (and all will likely be supported by a Kindle bookstore), Amazon will likely reduce the Kindle 3 price to $99 and offer a color version for later in the year for likely less than $200.  Both moves will be defensive in nature - once again talking points to protect the franchise - but we see the Kindle as a major success in the market, a boon to publishers, a win for book readers and a threat to device makers (see point one above).

    5. Nintendo 3DS Launches and Becomes a "Must Have" Device:  You may not be aware of it yet, but come March 2011 your children will be all over you to buy the Nintendo 3DS handheld gaming device.  This glass free 3D handheld device is a major upgrade over the existing DS and DSi products that are presently available and vastly superior to Sony's PSP.  The 3.5" display provides a 3D perspective with images popping out from the screen in beautiful graphics.  It features two screens, an upper 3D screen and a lower touchscreen and it will of course result in a refresh of Nintendo's franchises including Pokemon, Mario, Zelda and Nintendogs.  This device will represent the first consumer level 3D device and its success will lead to the implementation of 3D on other small devices (though perhaps without the same level of success).  In short, the 3DS will be to 3D in 2011 what Avatar was in 2009: a game changer.

    7. Tablet Proliferation:  The BlackBerry PlayBook, HP "PalmPad", iPad 2, Android tablets, Windows 7 tablets and even Chrome OS tablets will battle it out for the tablet space.  Some will fail - my guess is that the HP "PalmPad" product won't do well nor will Windows 7 devices.  The iPad 2 will lead the race while the BlackBerry PlayBook will likely find a solid niche when it is released likely in April or May.  By the end of 2011 the tablet space will be more fragmented and it will not appear to be as "sexy" as it is today.

    9. 3D-Enabled televisions will rapidly decline in price over the year.  By holiday 2011 - the price differential between 3D and HD televisions will be nominal leading to a more rapid adoption of the technology.  In effect - it will be built in for "free".
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