2012 Tech Predictions: A Look Back

NEW YORK ( TheStreet) -- Prior to the end of last year, I made ten predictions for 2012 that I thought would come true in the technology sector.

Some of the companies mentioned were Facebook ( FB), Apple ( AAPL), Groupon ( GRPN), AT&T ( T), and a host of others. Public, private and companies that were public that became private were subjected to my musings about the tech sector, and the economy as a whole.

On a whole, I would say I did okay with my predictions, though not as well as I would've liked. Some I nailed, some I did okay on, and others make me think twice about quitting my day job and becoming a prognosticator.

Here are last year's tech predictions before you go any further.

Facebook Goes Public


This one is almost guaranteed to happen, as The Wall Street Journal reported earlier this week that the company is looking to raise $10 billion in early 2012, at a valuation of $100 billion. The social media giant will also likely be over the 500 individual investor mark by that time frame, and the Securities and Exchange Commission requires companies to file to go public once they have reached that number of investors.


Facebook did indeed go public, in one of the most hyped IPOs of recent times. It raised more than $16 billion, becoming the largest tech offering in U.S. history.

The initial public offering was handled extremely poorly, by all sides, including Facebook, the NASDAQ and its bankers, which ultimately led to the offering being considered a flop. Shares are down 25.9% lower than their offer price of $38, and even lower than where it first started trading, $42.05.

Though this one was pretty easy to see coming, it's still nice to get one pretty much straight on.

Grade: A (Would've been an A+ if I had the foresight in 2011 to predict the massive decline we saw from the IPO price, but I'll take it anyway).

Twitter Gets Acquired


Twitter has become the go-to destination to learn the zeitgeist of any given moment with people able to tweet 140 characters worth of whatever they feel like at any hour of the day, and the micro-blogging service could be approached by a number of different suitors, including the aforementioned Facebook.

An interesting possibility is Google ( GOOG). The Internet search giant launched Google Plus, its own social media presence in 2011, but may still feel increasing pressure to spend some of its $39 billion in cash on an acquisition of Twitter, which was recently valued at $8 billion.


Boy, did I mess this one badly. Not only did Twitter not get acquired by Google, the micro-blogging site is looking to go public, though does not have plans to do so anytime soon. The poor reception to Facebook's IPO may have hurt Twitter's prospects of going public sooner rather than later, but the San Francisco-based firm will most likely go public in the next couple of years. CEO Dick Costolo recently noted it's in no rush to take the public plunge.

Grade: F (not telling mom and dad about this one)

AT&T, T-Mobile Merger Goes Through


AT&T ( T) announced the deal to acquire T-Mobile USA from parent Deutsche Telekom(DTEGY.PK) for $39 billion back in March 2011 but the transaction has run into regulatory resistance and its prospects for completion are dim.

The thing is, though, the transaction was never going to pass muster in its initial form, as analysts and the media speculated all along. AT&T plans to record $4 billion charge related to a break-up fee in the fourth quarter but there's still a chance the acquisition could come to pass in 2012, albeit in a very different form.

Some have speculated that AT&T and T-Mobile will share a network, or that AT&T sells some of its existing assets to Leap Wireless ( LEAP) in order to win regulatory approval.


Another goof on my part. Not only did the deal not happen, but T-Mobile merged with MetroPCS ( PCS) following the death of the AT&T deal. The new company, which is taking T-Mobile's name, should give consumers another reliable choice in the mobile phone area.

Grade: D (I erred badly on the initial merger, but T-Mobile did merge with another company, so I give myself partial credit here).

An Apple Television


Steve Jobs revealed in his biography that he had "finally cracked" how to create an Apple television, something he had longed to do for years.

There is increasing speculation that the company will come out with a television set, perhaps as early as next year. Piper Jaffray analyst Gene Munster recently made some comments that Apple could be planning to release multiple sizes of the television.

CEO Tim Cook has overseen the launch of the Verizon ( VZ) iPhone and the iPhone 4S, but the iPhone originally launched under Jobs. An Apple-branded TV would be the first venture into a new product area with Cook at the helm.


The Apple TV didn't happen in 2012, but speculation continues to abound that an Apple-branded television set is forthcoming.

In a recent investor call discussing Apple's fourth-quarter earnings, Cook said he thought there's more for Apple to do with its living room strategy. "We continue to focus on it and continue to believe there is something more there and continue to pull the string to see where it takes us," Cook said on the call.

Grade: Incomplete (We may eventually see an Apple television set, perhaps as early as 2013, according to one Wall Street analyst). What it will offer to consumers is anybody's guess, but here are some thoughts on potential features.

Daily Deal Sites Go Bust


Daily deal sites such as Groupon ( GRPN), Living Social, Google Offers, Amazon Daily Deals, and a host of other sites gained traction in 2011. Groupon was the first to go public, raising $700 million in its initial public offering.

The deal was met with some skepticism, however, as analysts wondered about slowing revenue growth at the company, and its "economic moat," which refers to its ability to stop others from entering the space.

With a host of new daily deal sites popping up all the time, one of these major players could end up on the rocks.


This one I got mostly correct, with Groupon experiencing tremendous difficulties in the daily deals space. The company has transitioned itself from relying only on daily deals, and now appears to be more of an e-commerce company, selling actual goods.

Living Social recently laid off 400 employees, as it struggles with the daily deals space. Also not boding well for the sector was Amazon's ( AMZN) massive writedown on its investment in Living Social. The Seattle-based online retailer wrote down $169 million of its $175 million investment.

Grade: A- (Groupon's shares have lost 78.95% year-to-date as investors worry about the company. Amazon wrote down nearly 100% of its investment in Living Social. Google Offers never really took, and Amazon has had limited success with its own daily deals. Chalk this one up in the win column).

Tax Repatriation Sparks Tech M&A


As the United States struggles to get the national deficit under control, there will be increased pressure from Washington to do a tax repatriation holiday. Many tech firms such as Apple, Microsoft, Google, etc. have significant amounts of cash overseas.

Instead of using the cash to create jobs as Washington wants, tech companies are more likely to use the tax holiday to benefit shareholders and themselves.

That could translate to some sizable tech mergers, and cloud computing companies may see heavy demand. Some names mentioned in the past have been Salesforce.com ( CRM), Red Hat ( RHT) and Citrix Systems ( CTXS).


We've seen a decent amount of deals in tech space this year, with Google, Cisco ( CSCO), SAP ( SAP) Oracle ( ORCL) and others adding to their cloud computing offerings, but none of the companies I mentioned above were acquired.

Grade: C+/B-

Windows Tablets Fail


Apple and Amazon so far are the only two companies that have been able to get the tablet computing space correct. Microsoft made significant strides in 2011 when it announced that its newest version of Windows, Windows 8, would run on ARM-based chips, and thus be tablet friendly.

But with companies like Hewlett Packard ( HPQ), Acer and Lenovo potentially leaving the tablet market because demand hasn't materialized, Windows-based tablets will be a commercial flop, despite getting good reviews.


Though I was unaware of the Microsoft Surface at the time, I've gotten this one pretty spot on. Other companies have not been able to replicate the success of the iPad, and to a lesser extent the Kindle Fire, save for the Nexus 7, by Google.

The Microsoft Surface, which launched in October, has had limited success, and there are no popular Windows-based tablets. Microsoft CEO Steve Ballmer called the debut of the Surface "modest," though perhaps sales will pick up when the full Windows tablets are available for sale. I wouldn't bet on it though.

Grade: A

Apps Fall Out of Favor


Smart phones have become so popular in part because of "apps" but the presence of HTML5 will really take form in 2012. HTML5 is the language for showcasing information on the web, and as companies like Microsoft, Apple, and others begin to integrate HTML5 into their software, apps could become a thing of the past.


Not even close on this one. Apps continue to do well, with Apple, Google, and Amazon continuing to see dizzying pace of downloads on their devices. At its developer conference in June, Apple announced it had surpassed 30 billion downloads, and Google recently surpassed 25 billion downloads. This gravy train isn't stopping anytime soon.

Grade: Q- (Definitely not showing this one to mom and dad.)

The Internet Suffers Major Terrorist Attack


This has been a threat for years but so far there have been no major outages. That doesn't mean something is not coming of course.

Financial exchanges, such as Nasdaq OMX ( NDAQ) or NYSE Euronext ( NYX), are prime targets.


There was the "Flame" cyber attack earlier this year, but it appeared to be mostly hype and little substance.

There was also the DNSCharger incident earlier this year, but that also seemed more sizzle than steak.

We can expect to see more of these types of incidents (including the latest Tumblr worm), but until a major threat to the United States gets hold of something serious, most of these attacks will turn out to be minor threats.

Grade: B-

Mobile Payments Will Take Off


2011 was the start of the transition to people using their cell phones to pay for purchases. Both Master Card ( MA) and Visa ( V) have bet heavily on mobile payments, along with Google and eBay's PayPal.

Companies like Starbucks ( SBUX) have begun already implementing the technology and the trend is sure to pick up momentum in 2012.


Though the Facebook IPO call was spot on, I feel more confident about having nailed this one. Square signed a deal with the aforementioned Starbucks to bring its technology to the mainstream. eBay's stock has performed exceptionally well this year, due largely to incredible growth at its PayPal unit. Apple included Passbook in its newest mobile operating system, perhaps as it moves to mobile payments.

The digital wallet's future truly is now, as mobile payments shape the way we pay for everyday goods and services.

Grade: A+ (This one gets me a gold star next to my name.)

Overall, I think I did fairly well with predictions, with four of the ten being spot on, two being pretty on and one which looks like it will eventually happen. I made one lousy call, and two really atrocious calls which hurt my overall grade for 2012. I'd give myself a B, solid, but not spectacular.

In 2013, hopefully I can turn a couple of those bad calls into better calls and increase my accuracy.

-- Written by Chris Ciaccia in New York

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