2013 Tech Predictions: A Ciaccia Look Back

NEW YORK (TheStreet) -- At the end of last year, I made ten predictions for 2013 that I thought would come true in the technology sector.

Apple (AAPL), Facebook (FB), Twitter (TWTR), Microsoft (MSFT) led my list of projections though I included a bunch of others, including some private companies.

On a whole, I'd say I did better in 2012 but some of my predictions were spot on. Others, I did okay on, and a few I'd like to have back, and would make a lesser man go home and cry at night.

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

Twitter Files to Go Public


This isn't the same thing as going public, which Facebook (FB) did in mid-2012. Twitter will likely file its documents in preparation for an initial public offering in 2014.

Last year I predicted that Google (GOOG) would acquire the micro-blogging site. I wouldn't be surprised if Google makes another run at Twitter, though I expect Twitter would prefer to remain independent.

CEO Dick Costolo has been pretty adamant that the company doesn't need to raise funds soon, as it tries to maximize revenue, while maintaining the user experience and value that Twitter has become. In mid-2012, Twitter said it "expects to generate at least $1 billion in sales in 2014."

I think we'll see Twitter file its documents around November, with an expected offering sometime around February.


Though I won't give myself an A+ on this one, I will give myself a pretty good grade, with a caveat. While I correctly predicted Twitter would file its documents this year, I said it would  go public in early 2014. The San Francisco-based micro-blogging site went public last month, pricing its offering at $26 per share, raising $1.82 billion in the process.

On the surface, that would seem to hurt my grade, and it should. However, I also broke the news that Twitter would list on the New York Stock Exchange. I think that should count for something when it comes to my grade, right?

Grade: A (A+ for getting the filing timing close to right, it happened in Sept., less two grades for the exact timing of the IPO, and add one grade for breaking a story)

Zynga Gets Acquired

Prediction: Zynga (ZNGA) has had a rough 2012, that's for sure. The company has lost nearly three-quarters of its value, important executives have left the company and Facebook recently distanced itself from the game maker.

CEO Mark Pincus still owns a significant portion of the company (50.15% of the voting rights as of August), despite having sold off significant amounts of stock in the initial public offering and subsequent offering earlier this year.

Zynga, best known for its -Ville games and Words With Friends is trading at extremely cheap levels. It has almost enough cash on hand (about $1.6 billion at the end of the third quarter) to equal its market cap ($1.8 billion). Zynga is still generating cash flow from operations -- $30.1 million in the third quarter -- and it owns a valuable piece of real estate, its San Francisco headquarters.

Pincus retweeted a tweet that said going private should be an option for Zynga. Given the amount of cash it has on hands, it's not out of the realm of possibility to see a management-led buyout on this one.

Review: Well, Zynga didn't get acquired; it's still publicly-traded, so epic fail on that one. However, Mark Pincus stepped down from his position as CEO of the San Francisco-based social gaming company earlier this year, replaced by Don Mattock.

Zynga has still had a tough time of trying to replicate the success it had with Farmville and a few other games, but investors have rewarded the stock this year, sending shares up more than 70% year to date.

Zynga's most recent quarterly results, its third-quarter, still shows the company has a lot of work to do. Revenues fell 36% year-over-year to $203 million, and bookings fell 40% to $152 million.

"We believe our core franchises, Zynga Poker, FarmVille and Words With Friends can be evergreen in terms of consumer interest and we are more effectively resourcing these teams with talent from inside the company," Mattrcik said in his prepared remarks talking about Zynga's third-quarter results. "We are focused on growing these franchises and our teams are showing early progress on better execution, predictability, franchise vision and game quality. Our leaders are working to compete more aggressively and to develop thoughtful growth plans for these core assets in fiscal year '14."

Grade: D (Zynga didn't get acquired, but Pincus did leave. I give myself a smidge of credit, but not much)

An Apple Television


People have been speculating about an Apple-branded television since Steve Jobs mentioned the idea in his biography. "I'd like to create an integrated television set that is completely easy to use," Jobs told his biographer, Walter Isaacson. "It would be seamlessly synced with all of your devices and with iCloud." No longer would users have to fiddle with complex remotes for DVD players and cable channels. "It will have the simplest user interface you could imagine. I finally cracked it."

I mused that it would happen last year, but now it looks like a rollout may take place in 2013. Some analysts on Wall Street are saying the same thing.

Piper Jaffray analyst Gene Munster predicts Apple will launch a television set in November 2013, selling between $1,500 and $2,000. "We expect the beauty of the design to be a feature, but the most important feature will be the ability to use the TV as the main interface for the living room across multiple devices. We believe the TV will include Siri and FaceTime. The biggest item unlikely to come with the TV will be unbundled channels," Munster wrote in his note.

I think we may get one earlier than November, perhaps as early as March. Apple has moved up the iPad release to October, the iPhone is in September and Macs may be refreshed in June. Spring is open on Apple's calendar.


I was beyond awful on this one, and at this point, I'm worse than Munster when predicting the start of an Apple television set. At this point, I'm done predicting when, or if, we'll see an Apple-branded television set despite knowing that the damn thing exists!!

I'm going to focus more on Apple's set-top box, Apple TV, and how it plans to reinvent the television experience that way. Apple CEO Timothy D. Cook has said in the past that television is "an area of intense interest" for Apple, but we haven't seen an actual television set just yet. My thinking is that we may never see an actual television set, given the long life spans sets have, and the relatively low margins.

Of course, I say this now, and given Cook's comments, about moving into new product areas, watch me eat my words.

Grade: F- (worse than Bart Simpson)

Larry Ellison Retires


Though the Oracle (ORCL) CEO has shown no signs of slowing down, he is a senior citizen. At 68, Ellison is one of the older CEOs in tech, and it's not like he needs the money. Ellison is sixth on Forbes' billionaire list, with an estimated net worth of $36 billion.

Ellison is so rich, he recently bought his own Hawaiian island, so it's not like he's scrounging pennies to put in the piggy bank. I don't think Ellison is going to step down next year, but I wouldn't be surprised by it either. Perhaps the death of his best friend, Steve Jobs, has got him ruminating about life.

If he does indeed decide to call it quits, my two best guesses are internal choices as his replacement: Oracle co-presidents Safra Catz and Mark Hurd, who joined Oracle in 2005 and 2010, respectively. Ellison said Catz would be his successor "if I dropped dead tomorrow," but he's also said the replacement should be an engineer, neither of which Catz or Hurd are.

Chalk this one up as highly unlikely, but you never say never in this business.


I knew this one was unlikely and said so. That doesn't mean I still don't think Mr. Ellison shouldn't step down, and go buy another Hawaiian island, or hell, some small country in Europe I've never heard of.

I still think Ellison's replacements are co-presidents Safra Catz and Mark Hurd, though I wouldn't not be shocked if Oracle, which is badly losing the cloud computing race to Salesforce.com (CRM), looks outside the company for his replacement.

Grade: (Incomplete. I knew it probably wouldn't happen, but I still put it up there.)

Intel Becomes a Major Foundry

Prediction: It's no secret that Intel is losing the mobile chip space to ARM Holdings (ARMH), as Intel's -x86 architecture can't compete when it comes to power consumption.

Intel has a few courses of action: continue going head-to-head with ARM-based processors as it's done before, license ARM's technology, or become a foundry, manufacturing chips for third-party companies.

I suspect that Intel will ramp up its foundry business for companies looking to produce their own chip sets, similar to what Apple is doing with its A-series chips for the iPhone and iPad. Intel is already producing chips for smaller third parties, but nothing like what Apple would need for its iDevices. That would make Intel one of the largest foundries in the world, competing with Samsung and Taiwan Semiconductor (TSM).

I don't think we'll see Apple cave to Intel on using -x86 architecture in any iDevices, as the app ecosystem has been created using ARM-based technology. And I can't see Intel licensing ARM's Cortex processors. Intel will do anything to get a piece of the Apple pie, particularly as rumors hint of Apple moving away from Intel altogether.


I think I've gotten this one pretty well. Intel signed deals earlier in the year to make the foundry business, where it makes chips for third-parties, become a bigger part of its business. New CEO Brian Krzanich has said that he's open to making the foundry business a bigger part of Intel's functions.

On Intel's second-quarter earnings call, Krzanich said the foundry business is "moving from crawl space to walk space." For shareholders, this transition requires patience, with a 12 to 18-month lag between when a customer is signed and revenue flowing from the foundry.

There's always been this speculation that Intel will become a foundry for Apple, and though that hasn't yet, it was rumored earlier this year, and is something I think is more likely to happen than not, perhaps not until 2015 though.

Grade: B+ (Intel has certainly upped its foundry position, but it would be hard pressed to call it a "major" foundry.)

Apple Makes a MacBook Air That Runs iOS


Going back to the last prediction, Apple has been looking to move away from Intel for its MacBook lines, and it sure isn't going to give away any of its industry-leading profit margins when it comes to owning the whole device.

Recent rumors suggested that Apple would distance itself from Intel in its MacBooks, though not for a few years.

Apple reportedly has big plans for its chip business, now headed by Bob Mansfield as part of the Technologies unit. Technologies combines all of Apple's wireless teams and Apple's semiconductors group, which according to the press release regarding Scott Forstall leaving, the semiconductor unit has "ambitious plans for the future."

Apple has been trying to merge OS X, its desktop operating system with iOS, its mobile operating system, and has done so with some success. I don't expect a full-fledged iOS-enabled MacBook Air, but perhaps one that runs both operating systems. We could potentially see OS X become so iOS-like that users will have a tough time telling the difference.


Apple didn't make a MacBook Air that runs on iOS but its desktop operating system OS X Mavericks continues to look more and more like iOS.

At Apple's Worldwide Developer Conference, the company announced it was bringing its maps application to OS X Mavericks, much like it has on its iOS, mobile operating system. Apple also brought iBooks to OS X, as it continues to muddy the waters between the two operating systems.

The Cupertino, Calif.-based tech giant also did something unexpected earlier this year, which continues to make iOS and OS X that much more similar. It said that OS X Mavericks downloads would now be free for users who buy new Apple computers, similar to what Apple's done with iOS, which is a free download. Over the coming years, I would expect to see the lines between both OS continue to blur, until they eventually become one.

Grade: C+ (I got some things right, but mostly it was wrong. This is kind of like my last art class in high school. Pablo Picasso, I'm not.)

Big Data Mergers


Big data is all the rage, as companies try to understand their customers better, and cater to specific needs.

Considering how flush with cash the technology sector is, I would not be surprised to see a buying spree on "big data" companies that add discovery and analytical technologies to their portfolios. Splunk (SPLK) is one company that focuses on data, having called itself the "Google of big data" to TheStreet earlier this year.

Companies like IBM (IBM), Oracle (ORCL), SAP (SAP) and perhaps even Google itself may be willing to open up their checkbooks to make more sense of the world's information overload.


This one is a bit murky, and tough to grade. Splunk is still a publicly traded company, up more than 142% year-to-date, but we've seen a slew of data-driven mergers this year. There are plenty more to come in 2014 and beyond, as companies continue to make sense of what the data actually means.

Facebook's (FB) purchase of Onavo earlier this year was fueled by its desire to become more data driven. I recently profiled Facebook's push into becoming a data-driven company, which makes decisions purely based on the petabytes of data that Facebook has.

More recently, was Apple's purchase of Topsy, which is still puzzling a lot of people on why it bought the company. It's clear that analytics isn't a strength of Apple's, so perhaps this is a push for 2014 for the company.

Grade: B (There are going to be a lot of data-driven purchases for the foreseeable future, so while I didn't accurately pick Splunk, I feel pretty confident it could happen.)

Microsoft Makes Xbox 720


Microsoft's (MSFT) Xbox 360 has been a huge hit since the Redmond, Wash.-based tech giant launched the gaming console in 2005. Though some Microsoft execs have said a new console won't come out for a few years, I believe that's a smoke screen.

Microsoft executive Shane Kim spoke about the Xbox 360 in 2009 and said the device could last as long as until 2015. A lot has changed in three years, and it's increasingly likely that Microsoft, along with Sony (SNE), will release new gaming consoles, as Nintendo did earlier this year, with the Wii U.

It's unknown at this point what the device will look like, but it's a good bet it will offer many of the same great features that have made the Xbox 360 a success, including Xbox Live, and various content deals, with the likes of Netflix (NFLX) and Hulu.

I'd expect the next Xbox to be released somewhere around mid-November, just in time for the holiday shopping season.


This one was pretty easy to see from a mile away. The two gaming companies, Sony and Microsoft, were hinting pretty strongly that a new gaming console would be released, and so far, they've been hits.

The Xbox One, as it's called (I didn't get the name right, but that's not important) is trying to position itself as an entertainment hub, and not just a gaming console. So far, that strategy appears to be working, as Microsoft sold over 1 million consoles in the first 24 hours it was available, last month.

Microsoft's Xbox One, which costs $499, is expected to be a big seller for the company this holiday season, as it continues to be more than just a place to kill zombies, lead your favorite team to the championship, or whatever your gaming heart desires.

Grade: A+ (It was pretty easy to get this one right. Even if the next CEO does decide to jettison the business.)

Nokia Goes Under


Nokia (NOK) has enjoyed some optimism recently, as sales of the Nokia Lumia 920 extend a lifeline to the struggling Finnish handset maker.

Nokia is working to bring the new device to a multitude of carriers, including China Mobile (CHL), the world's largest. But once Apple is firmly entrenched around the world with its iPhone 5 and Samsung offers its latest and greatest, it may be curtains for the Finns.

Nokia has a heavy debt load and has been trying to cut costs, but cutting can only get you so far. If sales of the Lumia 920 and other offerings remain "mixed," as Canaccord Genuity analyst Michael Walkley put it recently in an analyst note, Nokia may have to use more of its net cash to survive. Walkley says Nokia will have "roughly 2.5B Euro in net cash exiting 2013, and this is lower than the 3.6B Euro in net cash currently on the balance sheet due to restructuring cash payment estimates and our expectations for ongoing operating losses that will also adversely impact the cash balance."

Nokia could sell its strong patent portfolio to stave off the inevitable a little while longer, along with other assets such as Navteq, but I believe 2013 will prove to be an incredibly difficult year for Nokia, as it continues to lose market share.

Review: Nokia didn't go under, but it's a vastly different company now than it was at the start of the year. Microsoft announced it was buying Nokia's devices and services division for $7.2 billion. The handset part of the business, which is what Microsoft is placing its bets on, is still mixed at best, with Windows Phone accounting for 3.6% of market share in the third quarter. That's up 156% year-over-year, and is driven primarily by Nokia, but volume is no longer what it once was.

Grade: D (Nokia and Windows Phone gained market share, so I was wrong there.)

Steve Ballmer Leaves Microsoft


Steve Ballmer has been at the helm of Microsoft since January 2000, taking over for Bill Gates, who started the company. Since Ballmer has been CEO, shares have lost 9.65%, excluding dividends, according to Google Finance. Needless to say, shareholders are starting to get antsy.

Windows 8, which was supposed to be the company's saving grace, has had a lackluster reception, due to its difficult interface. The reception has been so poor that Windows head Steve Sinofsky left the company.

Sinofsky was thought to be a successor to Ballmer. Now that Sinofsky is out, the pressure is really going to mount on Ballmer to try to right the ship. If he can't, then maybe the board of directors will decide it's time for a change.

The next guy probably couldn't do much worse.


I was spot on with this one. It was hard to see this happening when I wrote it, given Ballmer's relationship with Gates, but obviously there had been talks and rumblings about it. There are always predictions you put out there that you're a little hesitant on making, given the past, but this was one I felt needed to be put out there, and it obviously worked out well.

A lot changed in 2013 for Microsoft, with ValueAct Capital taking a $2 billion stake in the company, and Microsoft fully transitioning into a hardware and software company, by buying Nokia's hardware division. Ballmer still hasn't left the company, as Microsoft is still looking for his replacement.

Microsoft has whittled down the short list to Ford (F) CEO Alan Mulally, Microsoft EVP Stephen Elop and Satya Nadella, Microsoft's Executive Vice President for Cloud and Enterprise.

Grade: A freaking +

--Written by Chris Ciaccia in New York

>Contact by Email.

If you liked this article you might like

With Nothing to Buy, Everyone Sells: Cramer's 'Mad Money' Recap (Thur 3/22/18)

With Nothing to Buy, Everyone Sells: Cramer's 'Mad Money' Recap (Thur 3/22/18)

A 2019 Bear Market and Subsequent Lost Decade in Stocks Lurks on the Horizon

A 2019 Bear Market and Subsequent Lost Decade in Stocks Lurks on the Horizon

What U.S. Tech Giants Stand to Lose -- and Gain -- From a Trade War With China

What U.S. Tech Giants Stand to Lose -- and Gain -- From a Trade War With China

Tariffs and Porky Spending Bill Push Bulls Off Cliff

Tariffs and Porky Spending Bill Push Bulls Off Cliff

Jim Cramer: When There's Nothing to Buy, People Sell

Jim Cramer: When There's Nothing to Buy, People Sell