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3 Big Tech Trends for 2016

Andy Serwer
Editor in Chief

Prognostication is a humbling business. Last year at this time Mark Anderson, a tech futurist type and CEO of the Strategic News Service, predicted that Amazon (AMZN) would have a tough time in 2015, citing e-book squabbles, drone expenditures and the Fire phone flop. Oops.

All Amazon did was blow the doors off in 2105, with the stock up over 120% in a flat market. What's up with that, Mark? “I thought Jeff [Bezos] was making too many mistakes, and that the shareholders and or customers would take it out on him,” he wrote to me in an email. “But AWS [Amazon Web Services] has been throwing off so much cash that nothing else mattered -- even though the NY Times story came out and harmed the company's reputation, and even though the Harvard Business Review dropped him from first place to near last based on some of these flaws. So, the world did indeed catch on to Jeff's issues, but cloud computing saved the day.”

Fair enough Mark, and good for you for owning up to your miss. (And by the way, Mark had some good calls too.)

With that cautionary tell in mind, I set out to make some calls of my own, putting out three big tech trends for 2016. These aren’t the "holy-crow-I-never-even-thought-about-that" variety. Rather, they’re existing trends that I think will either hit the mainstream, become part of the public conversation, or have mega implications for investors in 2016. So here goes:

—VR. (If you have to ask what that means, you are officially behind the eight ball.) VR stands for virtual reality, of course, and yes, it’s those goofy headsets that zoom you into another world, and yes, you’ve been hearing about them for a few years now. But the point is that 2016 is the year these puppies will actually roll out to the general public. Even more significantly, VR really looks to be a major, incipient, platform battleground in the world of Tech. To wit: Sony (SNE) and Microsoft (MSFT) are debuting VR products next year. So, too, is HTC, which may be a Hail Mary for that company. Google (GOOGL) has already introduced Google Cardboard, a low-end VR offering and has also invested in a stealth VR company with the ultimate VC-bait name: “Magic Leap.” But maybe Facebook (FB) will plant the biggest stake in the ground with a product from its Oculus Rift subsidiary, which Zuck & Co. bought for $2 billion in 2014. How big a deal is this? In a recent interview I did with Facebook’s head of sales, Carolyn Everson, she talked about how the company operates with mobile as its primary platform today but then went on to characterize Oculus thusly: “We think that can be the next operating system for the future.” Wow! No small thing there. (If you want to see how enamored Zuck himself is of Oculus, check out this Vanity Fair piece.) Still early days here. Oculus will only work on high-end PCs (which is weird), and the audience is all about gamers for now. But 2016 is merely year one. What the VR biz looks like in 2026, no one knows, but it will be big.


Oculus Rift VR headset on display following a news conference in San Francisco. (AP Photo/Eric Risberg)

—Snapchat is like a beautiful Russian nesting doll. The company is a digital, social, mobile, video, millennial play—oh, did I mention it has scale? Talk about a sweet spot, inside a sweet spot, inside a sweet spot! The knock on Snapchat is that its monetization efforts (read: advertising) haven’t really been fleshed out, but that seems to be changing. The company is now adding new formats for ads, adding metrics, which are so dear to marketers, and beefing up its sales team. As for the scale part, the company plays this pretty close to the vest, but it appears they have way north of 100 million active monthly users, and—get this—billions of video starts per day. No typo there. Reason for its success: It’s got a great user interface that millennials love. The mobile video marketplace already has a strong #1 and #2: Google’s YouTube and Facebook, respectively, but so far no #3. Some people thought that would be Twitter (TWTR), but a better bet might be Snapchat. Look for a big honking IPO in 2016, which means Snapchat co-founder and CEO (and former Stanford frat star) Evan Spiegel could be snapping up a big payday.

—Wearables grow up. If 2015 was the year of the Apple (AAPL) Watch, which, let’s face it, was a bit of a "meh," then 2016 will be the year that it all gets real. Look for another iteration of the Watch, with sticky functionality in terms of health and communications, that really makes you want to use the darn thing. (Dear Apple: More apps please!) But that’s just one platform. Remember Fitbit (FIT) had a very healthy holiday season, giving it "mo" into 2016. I would also look for Google to continue to step up with its Android Wear OS. And don’t forget Pebble, which finally does fitness tracking and has a voice command app called Snowy. But more than the fun/consumer side, look for wearables to make some serious inroads in the workplace. DHL recently ran a pilot program with smart glasses which really amped up productivity. And wearables will likely begin to appear anywhere that makes sense where a hands-free, voice-command device would help. Think EMT workers and medical personnel. It’s all coming, people! Maybe not in January, but soon…