The Startup Whisperer’s 2010 Technology Predictions

1/4/10Follow @matt_hulett

Now that I’ve posted my results for 2009, here are my predictions for 2010.

Apple will have another hit with the Apple Tablet (iTablet) – get ready for the cage match between the iTablet and the Amazon Kindle. The Apple Tablet wont be a revolution and certainly wont have the same type of unit distribution as the iPhone or the iTouch. The last bit of estimates that I saw for the Kindle was close to 500,000 new Kindles in 2009 and most likely accelerating to a couple of million in 2010. That’s not like the 40+ million iPhone and iTouch units that have shipped but the tablet is going to be a strategic product for the Apple.

Augmented reality is the big trend in smartphones – yes, its cool to see the overlays on our screens during football games but imagine having rich data overlayed with you (wherever you are).

Location-based services is the new land rush – we have all been waiting for sexy applications that serve up highly relevant information. There are a lot of startups doing cool things like FourSquare but the large players are going to have the scale advantage. Twitter is already all over the location trend and with their acquisition of Mixer Labs (the team behind GeoAPI) they are certainly the first legitimate player with scale. Facebook and Google will come out swinging hard in 2010 though. Facebook has been slow and methodical due to their previous missteps related to privacy issues (aka Beacon). But, when they release their location offering they will be a formidable location-aware platform.

Show me the money – I whiffed my prediction last year around M&A activity in 2009. M&A activity was down a whopping 56 percent YoY from 2008 to 2009. Next year will definitely have an increase from 2009 levels but not 2008 levels. Venture activity will be up to 2008 levels.

Google will significantly ramp up enterprise efforts – they are coming at Microsoft with everything that they have and in 2009 they publicly talked about enterprise as a strategic growth area. They have been doing all of the right kind of enterprisy things like integrating with enterprise class clouds like Salesforce and providing SLAs.

Social games go to the Web – I am doing a lot of work in the social gaming arena. The social gaming category is white hot with the top 3 players (Zynga, Playfish, and Playdom) generating over $400M in 2009 revenues. In addition, there was one big acquisition of Playfish by EA for $400M. 2010 is when the social gaming category grows up. The key social players will realize that they have to diversify out of Facebook and build direct-to-consumer experiences that leverage their strengths on the social platforms. Zynga is already doing this with Farmville.com. You’ve got to be nervous about building a business on someone else’s platform (Facebook). Take it from me (running GameHouse.com), its powerful to be able to have your own platform that you own.

The new guys grow up – Twitter and Facebook will more aggressively roll-out monetization in their platforms. Something tells me that when you see so many companies making money on your platform (in the case of social gaming, dangerously close to Facebook’s revenues), you’ll want to start to collect taxes as well as extracting revenue. This will be done judiciously and methodically in order to not risk traffic growth.

Seattle startup acquisitions – last year, I predicted 4 Seattle companies to be acquired. One was acquired (Urbanspoon was acquired by IAC). In 2010, I am putting my chips on BuddyTV and Picnik. Of course, Mpire should be acquired but I am obviously conflicted on that call.

Here’s to a more prosperous 2010.

Matt Hulett is Chief Revenue Officer for RealGames North America, a division of RealNetworks. Previously he was Chairman and CEO of Seattle-based Mpire. Follow @matt_hulett

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