predictions 2014

A few months ago, Shane, Kelvin and myself, along with Carl for a little bit, found ourselves in a bach on Waiheke island. It was lovely and sunny, the beach was about 100m away, so we stayed inside all day and talked about just about everything. And of course, predicted the future.

A quick summary of our predictions, so we can check these in 2014 (these are 5 year predictions).*EDIT* It should be pointed out that… we didn’t exactly agree on all of these. I’ve indicated the ownership and agreement/disagreement *EDIT*. In no particular order:
1. Obama gets 2nd term.
2. Stagflation period in the US, ie, recession coupled with inflation (Kelvin, I didn’t know what stagflation was…).
3. Digital camera market tanks, subsumed by cellphones.
4. PC Hard drive market vanishes, subsumed by flash memory (Shane partially disagrees, argues HDs will continue in big servers etc. Greg thinks big servers will also use flash memory to save power).
5. Android (or similar open platform) dominate mobile space (Kelvins, Greg disagrees)
6. Apple licenses Mobile Mac OS to drive people to ITunes (Gregs prediction)
7. Oil > $80/barrel
8. National second term, introduces a capital gains tax on property (Gregs, Shane disagrees).
9. Xero returns to market for funding in 2009 (looking like a pretty certain bet!). CORRECT.
10. One I forgot, Apple branded PCs have share of PC market > 20%!!! (Gregs, Kelvin disagrees and Shane 50/50)
11. Michael Jackson returns with a bigger album than Thriller (Ah, Kelvin. Greg and Shane…er… well… yes. That Kelvin…) As Shane said in comments, the odds of this one happening now are… slim.

The longer range forecast includes Shanes prediction of true machine intelligence within 20 years. It might be best to hope he is wrong about that!

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predictions 2014

26 thoughts on “predictions 2014

  1. Peter S says:

    9. Xero returns to market for funding in 2009.

    I would have agreed with you 3 months ago.

    But now I believe break-even is sub 14 months away and the recent current customer base growth has extended the runway…

    10. Michael Jackson returns with a bigger album than Thriller

    haha yeah right!

  2. Well, bear in mind that we made these calls about 2 months ago, right before they started all the announcing of record sales! Dammit!

    They are doing exceptionally well with the growth of the customer base, just having passed the 6000 paying customers mark. Now, thats a damn fine effort, and it may indeed stave off the necessity of heading back to the market, a move which would wreck their share price in the short term.

    I guess everyone will be waiting for their may reporting date with baited breath. Waiting, while listening to Thriller 2, the next gigantic hit from the king of pop!

  3. Well, one correct prediction so far is a good start!

    I don’t remember agreeing that National would put a property capital gain tax in place. That seems unlikely to me as it would piss off too many of their support base.

    I would also water down “PC hard drive market vanishes”. I think it will still exist, but it will go from core PC component to an optional component. But yeah, essentially the consumer PC end of the market will tank.

    Do we have prediction 2 true already? Inflation in the US is still positive:

    http://inflationdata.com/inflation/Inflation_Rate/CurrentInflation.asp

    And GDP growth is negative. I think the official definition is 3 quarters of negative growth? We have had two so far and I guess the first 2009 quarterly results will appear soon and will be also negative.

  4. Greg, with prediction 10, are you counting only Apple branded PCs or are you also counting any PC running the Mac OS? If it is the former, then I think the prediction may need a “(Greg’s prediction)” following it. The major points of difference we had in making the predictions seemed to center around the future dominance of Apple. I believe that Apple’s strength is also its weakness. By building closed products without any requirements for interoperability, they are able to use small iterative design steps to produce products with consistent design. However, by being closed and failing to leverage the possibilities that interoperating with other future products brings, is Apple’s weakness. That is the basis for my belief that Android or some other open system will become dominant over Apple’s iPhone. It is also the basis that I question prediction 10 that over 20% of future PCs will be Apple branded.

  5. I’ve updated the predictions to indicate a bit more who thought what.

    re: Apple, I think Apples strength is… well, Apples strength. I’ve realised that I’m a lazy consumer, and I don’t actually see a whole heap of advantage with the world of choice that springs from an open platform. I suspect laziness will rule!

    re: Hard drives, I was reading computerworld today, and theres an article that headlines “Sun says future of servers is in SSDs”. Now, a more interesting article might be “Does Sun even have a future”, but the article basically said Sun will use SSDs to reduce power consumption and increase performance, because they can be located closer to CPUs. So perhaps server farms will move to SSDs, primarily because of the lower power consumption…

  6. Oil is already over $70 a barrel… which rases a question: are we predicting that oil will be over $80 a barrel in 2014, or at we predicting that this will happen sometime before or during 2014?

    Oil prices are amazing. Compared to a year ago they have halved. Compared to six months ago they have doubled! Now that’s crazy.

    I thought I had a prediction saying that people would have games steamed to their homes via their internet connection. I.e., no machine at home, just a controller and display with the servers existing at some central location. It must have been an idea I emailed to you guys last year but we didn’t put on the list. Anyway, I just read that people are busy trying to do this:

    http://www.cnbc.com/id/31331241

    1. Oil has been crazy. Its dropping again because everyone seems to be swimming in oil. Not sure Id be speculating on oil right now.
      That streaming game technology looks cool. Im not quite sure how well it will work out, since it must be dependent on bandwidth and latency.
      But it definitely links to the concept of localised clouds which I think you mentioned at Waiheke, and I think will be the natural progression of cloud computing.

      not sure if this will be the driver of localised clouds, but cloud computing in general will hit some sort of performance issue sooner or later.

  7. Number 2:

    The US has had a recession since Q4 2008 so we got that part right. Maybe slightly positive GDP growth now. What about inflation at the same time? Inflation was positive Q4 of 2008. Yay, stagflation, as we predicted. But… since then deflation rather than infaltion!

    So… a very generous interpretation would say that we were right. But, by a “period of stagflation” I think we all had more than a quarter in mind. True? Thus, overall, I’d say we got this one wrong… but we weren’t too far off.

    Number 11:

    With MJ dead I think we can close this one 🙂

    1. I don’t think we can conclude that the stagflation prediction has been successful. I’ve investigated the Wikipedia definition of stagflation: “Stagflation is an economic situation in which inflation and economic stagnation occur simultaneously and remain unchecked for a significant period of time.” I assume that the transitory inflation along with the recession isn’t “a significant period of time”. My original thoughts were that if the US economy was shrinking while they also had inflation, then the Federal Reserve would be more likely to worry about stimulating the economy instead of controlling the inflation, and that this would over time resolve the housing bubble problem as worldwide over-priced houses will be inflated away. I still hold that this prediction could eventuate, with the foundations for it building up currently.

      On number 11, I note that the album ‘This Is It’ is currently number one in the charts. See the following article: Michael Jackson hits number one with ‘This Is It. The prediction was just that Michael Jackson would return with an album bigger than Thriller. It was never stated that this required him to still be alive. I think this prediction is still in play 🙂

  8. Yes, I thought the period of stagflation would be more pronounced. I think I recall when Kelvin originally proposed a stagflation period, he was predicting that Chinese demands for commodities (especially oil) would increase inflation. Not sure we have seen too much evidence of that. Still, we have 4.5 years to go!

  9. Oil is almost $83 a barrel. Our prediction of oil being >$80 in 2014 might have been a bit of an under estimate…

    Hard disks are hanging in there with SSDs not dropping in price for the last year and not expected to for at least another year.

    Apple’s worldwide market share is still below 5%. They’re going to have to do a lot of work to get to 20% !

  10. re: Apple, I will be extremely interested to see the iPads effect on market share, over an extended period. I believe thats a game changer (as I wrote previously), and will be adopted by the masses (ie, me!). Earnings announcement today might shed some light.

    Oil… mm. Well, it might have seemed dramatic when we made the prediction, but I think we weren’t clear enough there. Is that a point-in-time price, or an average price?

    still a long time to go… 🙂

    1. Yeah, but that’s just among portables. Still, that’s a big chunk of the total PC market, so I’d guess they are around 8% in total. They might make it to 20% in time.

  11. Just over half way through the prediction period! How are we doing? For things that having happened I’ll put in my current estimates of the probability (for my prediction in each case).

    1. Seems about 60% probable to me at the moment.
    2. I say we get 1/4 of a point for this one. Yes there was a period of no growth in the US combined with some inflation, but it wasn’t 3 quarters, which is the standard definition, plus I don’t think it was as dramatic as what we had in mind when we made this prediction.
    3. Seems to heading this way, but I haven’t seen any hard numbers. I’ve read that some camera companies are in financial trouble. 75% ?
    4. Clearly hasn’t happened yet. Ironically, part of the reason seems to be that the prices of Flash RAM have been kept up due to strong demand for this for smartphones, tablet, etc. My guess is that my version of the prediction is probably where we’re heading for early 2014. (70% for my version)
    5. Seems on track, if by dominate you use the obvious definition of market share. (75%)
    6. Still seems very unlikely to me. (90%)
    7. About $100, so looks likely to come true. (90%)
    8. This is actually two predictions. First seems very likely at the moment. Second continue to look rather unlikely to me. (85%)
    9. Correct. I didn’t really make much of a prediction this one, but I think I agreed with the reasons you guys gave so I’ll go with it 🙂
    10. Apple still seems to be generally gain, but it depends on how we want to count market share. Is an iPad a PC? Is an Android netbook a PC? Which market are we talking about? US or World? I’m not sure how to score myself on this one. You might interpret my 50-50 prediction as being that Apple will have a market share of between 15% and 25%, hence the 50% chance of crossing the 20% mark? In which case I think I’m something like 75% likely to be right.

    If I put in my current probabilities for things than haven’t happened yet, and take my own predictions (given that we didn’t all agree on each point):

    0.6 + 0.25 + 0.75 + 0.7 + 0.75 + 0.9 + 0.9 + 0.85 + 1.0 + 0.75

    Which, by my current estimates, gives me a predicted 75% average at the moment.

    As for true machine intelligence by 2029. Yep, I still think this is fairly likely.

    1. Re: Android versus Iphone… the way we’ve set the question up is a bit flawed. Android (software) dominates mobile space. Does that mean “All mobile devices running iOS compared to all mobile devices running android”? So basically including ipod touches and tablets in the mix? Or just phones? Or non-tablets, so including ipod touches? Its a bit tricky to decide what market share of mobile space is.

      Similarly the mac > 20% market is a bit flawed too. For convenience, lets choose the US market, and lets not include tablets. Its a bit unfair (primarily to apple) but I can’t see a way to avoid double counting.

      As for true machine intelligence… hmm. I’m on a silicon-free diet from now on, so all you other (soon-to-be)people-burgers will just be a bit tastier!

    2. I agree, we haven’t had prediction 2 yet. Still possible though since my reasoning is still the same. I imagine that if inflation crept higher while the economy was contracting, that the federal reserve would be more concerned about creating growth than fighting inflation. Still have over 2 years for this one.

      Yes, prediction 8 is really two predictions: that A and B will both occur. Since National is polling well and Labour is the party proposing a capital gains tax, it appears that we will definitely get either A or B but not both.

      I’m not sure if we’re measuring anything worthwhile with a measurement of 75% prediction accuracy (which is actually a prediction of the prediction accuracy!) My concern is that it is easy to benchmark it against an accuracy of 50% and feel good about it. But we’re not considering the likelihood of the predictions when they were originally made. For example, if we made predictions such as “In 5 years time we’ll still be driving cars” or “In 5 years time computers will be at least twice as fast as they are now” then we would get a high prediction accuracy without really having much prediction skill. However, if we made predictions such as “In 5 years time we’ll discover a cure for all types of cancer” and “In 5 years time Palm will dominate the mobile OS space” and we achieved a prediction rate of say 40%, we’d still be able to boast about our prediction capability.

  12. Only 1.5 years left to go!

    1. Currently looks fairly likely and will be known soon.
    2. I think we roughly got that one, though it’s probably more accurate here in the UK where we stay around zero growth while still having a few percent inflation.
    3. I’ve heard signs that this might be starting to happen… but this will need to accelerate a lot if it’s really going to tank in the next 1.5 years. It might happen with smartphones rapidly taking over most of the mobile market and coming with better and better cameras.
    4. I think my version is roughly on track. Typical PCs, which these days means a laptop, are going more and more SSD, while most servers I see still come with massive hard disks.
    5. Android is dominating in terms of total units.
    6. Still can’t see this happening!
    7. Currently true, looks fairly likely to stay on track.
    8. First part true, the second part still looks unlikely to me.
    9. Correct
    10. Maybe not. Market shares of OS X seem to vary between 7% and 14%, both world wide and US only. If you did US only and included tablets, you might get over 20%, I guess. So this might be open to interpretation. I was only 50-50 on this anyway, so if it’s getting nearish to 20% I’ll claim victory (if it was way under or over that would be a failure).

    Still a bit of time to go, but I think the predictions are looking surprisingly good.

    1. For 4, I’d argue I’m still on track as well. More and more ‘SSD-powered’ servers are appearing on cloud server farms like Amazon. Its now a viable option.

      5 – Android dominates, yes, I think I might concede this. It seems unlikely that iPhone will increase that much in a couple of years. If it was a profitability measure, it might be different.

      8 (capital gains) – John Keys government has been (somewhat surprisingly to me) disinclined to do anything vaguely decisive. So agree, chance of this is minimal because it might require a decision to be made.

      For 10, although I think iPads should be counted, its probably simpler and easier if they’re not. I still think the prediction will stand. The mac trend seems to be growing and growing. I don’t really see anyone heading towards linux (although I might if my mac keeps crashing!). And windows is just whats installed on those cheap laptops.

      Next time, I think we should focus on some more world-changing type predictions!

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