Special Feature: 2006 Predictions

January 02, 2006 by Jeff Shepard

This is Part Two of a week-long special series looking ahead to 2006.
by Richard Ruiz, Research Analyst, Darnell Group

As the New Year rolls in, there will predictions that are sure to happen, there will be some that are unlikely to happen and there will be some that will happen because it makes sense for them to happen. Here is a list describing my take in the latter category, my six predictions for 2006.

Projected growth in the mobile phone industry will continue to be underestimated. Like last year, analysts will claim that the mobile phone market is saturated in North American and Europe, and as a result, those areas will experience slower growth until replacement phones are needed. However, growth will continue to outpace most forecasts because mobile phones are now regarded as accessories as well as communication tools. In the coming year, new phones will emphasize more download capabilities and newer features, such as GPS, will be common. This underestimation will also have consequences in the market for ac-dc external power supplies.

The security industry, especially security cameras, will see tremendous growth. This business used to be perceived as catering to only the high-end consumer. It is now being marketed to the do-it-yourselfer. A good home security video system can now be purchased at Home Depot or Fry's for a couple of hundred dollars, and within the next year or so, security cameras mounted on front porches of middle class homes will be as common as mail boxes. In addition, these systems will be modular, and upgrades to these systems will allow individuals to control them with their phones and computers, allowing them to monitor their homes while they are away.

By the end of the year, flat panel monitor TVs will replace CRTs in 90% of the market place. Except for small second bedroom TVs and very low-end monitors, flat panels will dominate the market. By 2007 or 2008, large CRT TVs and monitors will be as rare as black and white TVs.

California will once again attempt to initiate a solar homes incentive policy and will offer a tremendous tax break to consumers who install the systems. However, in the interest of "public safety," electrical and other contracting unions will fight the initiative. Eventually, the Governor and State Legislature will compromise and pass a watered down version of the bill, with the condition that only approved contractors install the solar systems. This will add to the cost of the system and remove a good portion of the tax break. The final compromise bill will not offer enough of an incentive to convince homeowners to install solar energy.

Foreign countries will continue to outpace us in green technologies like Solar and PV. They will continue to do this because they have to. We, on the other hand, do not have enough of an economic inventive to go forward in this area. If gas prices increased to $5 or $6 a gallon and electricity and natural gas prices tripled, there would be serious talk of going forward with alternative energy sources. Short of this, I don't see any changes coming.

The lithium battery market will continue to grow at the same pace that it did this year. With the exception of notebook computer users, I don't think that the typical consumer is worried about getting a few more minutes of life out of their batteries. I think that any improvement in battery life will be only marginal, and it will be much more cost effective to carry an extra battery than buy an expensive "new and improved battery."