Video-game consoles: Despite recent sales spikes for both Sony's PlayStation 3 and Microsoft's (MSFT - Get Report) Xbox 360, it's been a tough market for games, for which strong app sales and increasingly game-friendly smartphones aren't helping. In 2009, NPD saw sales for the entire gaming industry drop 8%, with console sales slumping 14%.
That would be just fine, had Apple not announced the iPhone 4 with a new gyroscope aimed specifically at attracting gamers. Microsoft did its rival one better, offering Xbox games on its Windows Phone 7 through its Xbox Live service. With Sony, Microsoft and Nintendo increasingly turning to online content and motion-controlled gaming, moves by Apple and other smarphone makers could be cause for concern.
"If I have an iPhone vs. a dedicated game machine, I'm still going to have a Nintendo Wii in my house because I can't do those things on the iPhone," Dulaney says. "If it ever turned out that the iPhone could do all the gestures I needed, then the Wii is under pressure and would fade away."A simple connection would help, as well. While a smartphone tethered to an HDMI cable isn't much fun for anyone, a wireless HD connection like that offered by the WiDi wireless display feature found in Intel (INTC) Core i5 and Core i7 processors would make a smartphone both a console and a controller. "While a couple of devices have an HDMI output, you don't have it on those phones," Dulaney says. "In the next five years, you'll have wireless video output and people questioning whether a Wii is a necessary purchase."