Internet growth

This is an article from Reuters about Internet growth.

Analysts predicted the next drive to Internet growth would be, wireless. VCs are returned to pre-1999 funding and valuation level for new ventures. As an insider, I would admit VCs has recovered and wireless has the potential. On pure tech side, there are also semantic web and others, the limits are really bounded by our imaginations. However, IT lacks a model that could generate periodical income.

Like the DC market has experiencing a steady growth from late 90s to now, from 2MP to 8MP prosumer, or 16MP full frame – this keep generating income for companies like Canon, Nikon and Sony, while Kodak suffered most. This has been the case up this year, Olympus find the margin of its digital imaging department getting thin, due to price drop and tough competition. In fact the price for consumer DC has decrease over 30% in my expectation over last three years. CCDs are no longer dominated by Sony, with Panasonic and Samsung catching up. The business model has changed, that allow manufactures to bring their own DC my assembling ICs and CCDs that are already available on the market, and the result is we get HP and brands from Korea and China selling DCs. This is exactly the same case for mobile phones. The consequences are the price drops, less product differentiations, and making existing players without in-house development difficult. One obvious victim here is Olympus, without its own ability to develop imaging processing engines or CCDs. Nikon and Canon are moving their focus to the DSLR market, where consumers are upgrading from DC to professional SLR in quest of better photos, and enthusiasts willing to spend more in the segment that regarded as serious photography. These changes allow companies like Canon and Nikon to keep up their profit in the digital imaging department.

How about the web? As mentioned, it lacks a model to drive profit. QoS has been in discussion for over 10 years without provision. Wireless has driven the growth of computer hardware industry (intel centrino, wi-fi access points), yet for how long can this growth sustain? Is there a real market for it? Technology advances so fast that it might be human who refrain the introduction of new technology. Is 3G really that impressing by allowing media streaming and video conferencing which could only be in sci-fi movies? Yes it seems so, however it is a nice-to-have rather then a must-have for most people. And the idea of video has introduced some privacy problem – you might not want to let your wife to know you’re in a club or with your part-time lover. See? New tech are not always welcomed.

Tech analysts, is there a place for me? Analyzing has been my best. Is McKinsey the start? I hope so.