What To Look Out For In Tech In 2015

 The tech industry is poised for another huge year in 2015. New products will emerge that once seemed like fantasy, while more mature tech industries will begin to consolidate.

At BI Intelligence, we recently came up with our top predictions for what's ahead in 2015 in our five major coverage areas - Mobile, Payments, Internet of Things, Digital Media, and E-Commerce.

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Here's a sample of our boldest predictions for the year ahead:

Venmo, the peer-to-peer payments app, will offer a solution for in-store merchants.

BIIVenmo allows people to make informal payments to one another instantly using their phones. We think the company will expand this service and allow merchants to start accepting Venmo in their stores in 2015. Venmo has an enthusiastic and growing young customer base that already uses the app to make payments. In fact, Venmo is on track to process $2.5 billion in 2014. Consumers can already use Venmo to pay within some apps such as Uber and recruiting brick-and-mortar merchants would be a natural expansion strategy. Finally, it would be relatively easy to integrate Venmo into mobile point-of-sale devices, which feature Bluetooth LE in increasing numbers. Venmo already has a Bluetooth LE feature on iOS that allows users to identify other nearby Venmo users. The same feature would help merchants connect with Venmo users who walk into their stores. E-commerce accounts for just 6.6% of total retail purchase volume in the US, according to the Census Bureau, so the real opportunity in payments is still in processing transactions that occur in the physical world. 

By year-end 2015, more people will have used a smartphone to unlock their doors than will have used a mobile wallet. 

We expect the transition to locking and unlocking doors via a smartphone to take off quickly, faster than the pace of mobile payments in stores. Smart locks are being aggressively adopted by massive global hotel chains, which are ramping up installation in guest suites and conference rooms. One connected-lock executive we spoke to recently told us that large hotel operators are spending nearly half a billion dollars each year replacing plastic keys. Many smart locks use Bluetooth Low Energy (BLE) technology to operate and this is available on more phones than NFC, which is what mobile wallets like Apple Pay and Google Wallet depend on for offline payments. NextMarket estimates smart locks will be a $3.6 billion market by 2019. 

Apple will generate more revenue from iTunes/Software in 2015 than from sales of the iPad. 

BI IntelligenceApple's iPad sales have declined on a year-over-year basis in every quarter in 2014 thus far. And despite the launch of a new iPad Air and new iPad Mini models, we don't see iPad sales achieving any sort of meaningful growth going forward, for several reasons, including its high price-point, and competition from from the 5.5-inch iPhone 6 Plus and other phablets. Meanwhile, Apple's software and digital content businesses are doing very well. As a result, we predict that for the first time since the iPad's debut, Apple will generate more annual revenue in 2015 from its iTunes/Software category than from tablet sales. Over the course of 2015, we see Apple working harder to improve its iTunes and app store businesses. In general, the mobile industry as a whole is becoming more software- and less hardware-centric. 

The Amazon Echo will succeed

This tubular device is already in the hands of a small pool of beta testers, and now on sale to some Amazon Prime members. There are other digital audio-streaming players on the market but the Amazon Echo takes this concept much further, turning the hub into an artificial intelligence-powered assistant for the home. There are three reasons we believe the Echo will be popular. First, expectations were low, meaning initial press attention has been muted, giving the Echo a chance to find its niche among early adopters. As it rolls out, the Echo also has the potential to launch an all-new product category - the in-home digital entertainment and information concierge - and remain the leader in that niche for years to come. It will also later prove its added value as a device that allows for quick, voice-activated e-commerce purchases. Early reviews have been mixed, but we also think Echo will get better over time as its ability to interpret speech improves.

YouTube will get a 'social' make-over

YouTube is at risk of losing its dominance in the digital video space to Facebook, Yahoo, and AOL, all of which are investing heavily in video. YouTube saw its unique desktop video views decline by 9% year-over-year in September, while its competitors experienced big gains during the same time period. A major criticism of YouTube is that many viewers come to watch just a single video, treating it more like a video search engine, instead of a destination. YouTube doesn't provide people with intuitive or robust sharing and messaging tools, which means YouTube videos often are shared and viewed on other sites and social networks. The result is fewer viewers sticking around to explore YouTube's content. Integration with Google's confusing social network, Google+, hasn't helped YouTube win audience loyalty. We think Google will try to reverse these trends by adding unique social and messaging features that encourage viewers to share videos within YouTube, and by making personalized suggestions a key component of YouTube's user experience. 

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