Google made waves last year by dipping its toes in the cellphone industry. The company is expected to make a big splash this year by bidding on wireless airwaves and supporting a raft of new open-source-powered phones.

If 2007 was the year of the cellphone, we ain't seen nothing yet.

Many of the game-changing events that happened in the North American wireless industry last year will bear fruit in 2008, industry analysts say, once again making cellphones the technology story to watch.

Apple Inc. got the ball rolling in June when it launched the iPhone, a gadget that actually lived up to its hype by finally making the internet on cellphones fun, easy to use and affordable.

Google Inc. further accelerated things, first by convincing U.S. regulators to force more openness and competition into the wireless business, then by diving in itself with its Android open-source software for cellphones. Along with an international alliance of technology companies, cellphone makers and wireless providers, Google in November set out to make mobile devices more like computers, which are open and free for software developers to design for. The company in December also registered to bid on the airwaves needed to run a cellphone network in the United States, which will be sold in an auction beginning later this month.

That means all eyes will be on Google this year, says Phillip Redman, wireless research director for the Connecticut-based technology consultancy Gartner.

"They're like the sun in the solar system right now. They certainly have a lot of weight, and people are gravitating around them," he says.

The seeds of change in Canada were also planted last year, with the government setting rules favourable to new would-be cellphone providers in a similar auction of airwaves to be held in May. New providers including Quebecor and MTS Allstream are expected to pop up by the end of the year, which will have an impact on prices and the wireless services offered. Apple's iPhone and Google-powered devices are almost certain to arrive in Canada in 2008 as a result.

John Ruffolo, head of Deloitte's telecom, media and technology practice in Toronto, says Apple and Google have helped spur mainstream public interest in so-called smartphones, which will drive prices on wireless devices down across the board. Low-cost manufacturers, such as Taiwan's HTC, can use that opportunity to really break the market open for everyone by coming out with a sub-$100 smartphone, or even $10 regular phones.

"If we get to that point, that would be absolutely dramatic," he says.

Despite the effect Google is expected to have on cellphones, 2008 may not even be the year in which the company really makes its mark. So far, developers of software for Google's Android have encountered problems designing applications for phones, says California-based technology consultant Rob Enderle, which means the operating system may need to be tweaked before it really takes off. The first Android phones will be out in the second half of the year, but they make not have a real impact until a second generation is released in 2009.

"There's no doubt in my mind that it's going to be big and, like the iPhone was, it's going to be an industry changer," he says. "It will do decent damage to everyone, including Apple, but Google is doing a certain amount of learning on the job, which I didn't expect to be the case."

Internet TV to take off

Outside of wireless, a key development to watch will be the delivery of online video, Enderle says. Major media producers started to see the benefit of placing their content online in 2007, and 2008 will be the year they fully jump in. Electronics manufacturers are also getting better at designing set-top devices that can take that video content from computers and put it on televisions.

Enderle expects Apple to introduce a greatly improved Apple TV set-top device early in the year which, when coupled with content deals — such as the movie rental agreement it is reportedly close to announcing for its online iTunes store — will finally spur video downloads. That will further detract from physical DVD sales, which have been in decline, as well as make the high-definition format war being fought by HD DVD and Blu-ray a moot point.

"A lot of the players are stepping away from the whole optical drive battle and moving to downloads with what are going to be the first real, credible third-party products outside of the cable operators," he says. "I think 2007 was probably the last year we cared about the [format] battle."

Media producers — particularly television networks — face added impetus to get into internet video, given how much revenue they are losing from the seemingly endless Hollywood writers strike.

"They're going to need to make some decent money over a short period of time, which means they're going to be much more likely to cut deals that will allow downloads over a much broader spectrum of television and movie content," Enderle says.

Credit card fraud explodes

Two other big technology issues that arose in 2007 — security concerns and environmental awareness — will also continue to dominate headlines in 2008.

The past year saw more credit card fraud than any previous year, Deloitte's Ruffolo says, and that is only "scratching the surface."

The coming year will see new authentications introduced — consumers may have to confirm credit card purchases through their cellphone, for example. Digital protection will become even more important as personal information migrates to those cellphones.

"Internet fraud is becoming a massive issue. You're getting organized groups around the world that are challenging that security," Ruffolo says. "Those are the issues that are going to explode next year."

Green technology, which was publicly espoused by everyone from car makers to computer manufacturers in 2007, is going to become an embedded philosophy for companies rather than a short-term marketing gimmick. Companies are realizing the cost savings that can be gleaned from environmentally conscious practices and are incorporating them into their manufacturing at a rapid pace.

"We started to see big money move into green tech last year," Ruffolo says. "We're not going to say 'green tech' anymore because it's going to be something that's part of innovation."

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