Rosy 2009 for 'smart' power, netbooks, not print media: Deloitte
Efficient electricity grids will see higher demand, traditional print media will be hit hard, and netbooks will see a surge in popularity in 2009, according to technology auditors Deloitte.
The trends were outlined in Deloitte's ninth annual list of predictions on technology, media and telecommunications and discussed at a conference in Toronto on Tuesday.
So-called SmartGrids — traditional electricity grids that use computer intelligence to respond to shifts in power demand — could be the fastest-growing sector in the technology market, the report said.
SmartGrid technologies can reduce electricity consumption by up to 30 per cent, the report said. They do this by routing demand from consumers who aren't using a lot of electricity during peak hours to those who need it. By being able to selectively allocate electricity, demand peaks are reduced.
There were differing opinions, however, on how quickly the technology will take off.
"If there's a market that's slower than utilities, I've yet to find it," said Harry Gruner, a partner at JMI Equity, which invests in software and business services firms. "I think over the next five years, not 2009, we're going to see some big advancements."
Duncan Stewart, technology research director at Deloitte in Toronto, responded: "Half of the spending [on SmartGrids] isn't from utilities, it's from enterprises and consumers." The fact that consumers and businesses are powering the demand for SmartGrid technology will fuel demand in 2009, he told CBC News.
Tough times for print media
Traditional print media, already rocked by plummeting advertising revenue and declining subscriptions, will be hit hard in the coming year, according to Deloitte. One in 10 print publications will have to close their physical print operations, reduce print frequency or even shut down entirely in 2009, Deloitte predicted.
"There's no less demand for news today," said Simon Avery, technology reporter for the Globe and Mail, who also spoke at the conference. "There's probably more demand than ever. [But] the model is broken. It's like the music industry."
Canadian media organizations have announced large-scale cuts in recent months. Canwest News Service announced in November it was cutting 560 staff, while the Globe and Mail announced last month it was cutting a tenth of its workforce — about 80 people. CTV has also cut jobs and is instituting a hiring freeze in 2009.
For many publications to survive, however, job cuts aren't enough, said Stewart. Many will have to undergo a complete overhaul of their business models, and they will have to differentiate themselves online. They will have to provide richer online content and more interactive features, he said.
They may also have to charge more to those still subscribing to printed publications, he said. And if publications find that an "online only" approach doesn't work, they'll have to limit online content to encourage readers to return to print, the report said.
Rosy future for netbooks predicted
Meanwhile, mini-laptops designed for casual users who spend the majority of their time on the computer surfing the net will do well in 2009, the report predicted
Netbooks — compact, lightweight computers equipped with Wi-Fi but no hard disk drive — have seen sales grow dramatically in the past two years, the Deloitte report said.
As they do with smartphones, wireless providers are likely to subsidize netbooks in order to lock them in with wireless subscribers. Deloitte predicted netbooks could retail for less than $250 in 2009.
"There will be subsidies — heavy subsidies," said Avery. "When you think about it, why would you pay full price for a netbook, which is maybe $150 cheaper than a laptop?"
Avery said it's possible that if the netbook takes off, cell phone companies like Qualcomm or BlackBerry maker Research In Motion could get involved. "We're having a potential blend of categories, where you can have the cellphone carriers blend in to [carrying] computers," said Avery.
Funding to startups urged
Even as Deloitte predicted encouraging signs for newer technologies like the netbook, experts cautioned tough economic times could stunt innovation.
"The funding of early-stage companies in the past few years has been decimated," said Barry Reiter, chairman of the technology, media and entertainment group at Bennett Jones LLP, a Canadian law firm. "We also know that innovation comes from these startups. The inability to fund these is devastating."
He suggested that instead of providing "welfare to big, established, clunky organizations," governments should fund startups.
"Governments want to do stimulus," said Stewart, referring to spending on large infrastructure projects involving road-building and bridges. "They want to spend to get people working again."
The effects of infrastructure spending won't be felt for years, perhaps even until after the recession is over, said Stewart, but spending on technology will be felt a lot sooner, he said.
Gruner noted that the private response to start-ups in tough economic times can also be tepid.
"Credit is hard to find today," said Gruner. "[During] periods of uncertainty, people like us tend to withdraw and say, 'Do I want to put out $100 million this quarter, or do I want to wait for better market conditions?'"