Looking forward to 2010, I suspect we will see the following developments.

1. The Tablet Cometh. Emulating Moses when he came down from Mount Sinai with two tablets that changed the world, Steve Jobs will come down from Infinite Loop with two tablets that will change the world. (One will be less impressive and less expensive than the other.) The new tablet will make the news on five or more continents and Apple will sell at least two million of the devices within its first year – maybe more. The tablet has been a rumor for so long that when it finally does arrive, it will feel as though a fertile area for speculation has been stolen away from us; just like when the iPhone finally arrived.

The emergence of the Apple tablet is so strong a rumor, that it doesn’t really count as a prediction. So here are some additional thoughts. Apple’s tablet (called the iSlate, according to the most recent speculation) will do two things:

• Because of the price point it will redefine the netbook market. Netbooks that aren’t tablets will just be viewed as lousy laptops – which is what they are mostly. They’ll start to disappear.
• Despite Apple’s desire for this not to happen – disruption is good when it happens to others – the tablet will begin to eat into the laptop market. It will take Apple a while to realize that disrupting the laptop market is a good idea – especially if it owns the software store.

2. The Tablet will be a category killer. It will kill the Kindle stone dead – of course it will. But it won’t just be the Kindle that gets its legs pulled from under it. You can wave goodbye to the portable DVD player too, which was already stumbling. The tablet will redefine the iPod touch as the iSlate Nano. It will (I’m guessing) be available with a telco contract, but I expect that to be a passing fad. That’s mostly because I expect people to link their iPhones to the tablet. So look for innovative ideas that turn these two devices into a co-operating unit.

Apple will, I suspect, use the tablet to launch a cloud computing offering based on its excellent iWork – possibly merging that with its Me.com service. It’s not been talked about much, but Apple did invest $1 billion last year to build a humongous data center. It won’t just sit there calculating pi to a trillion decimal places.

Btw, look for the tablet to be a very passable video camera and for it to enhance the touch interface way beyond what is possible on the iPhone.

3. Here Comes Augmented Reality and The Electronic Wallet. The next and imminent evolution of mobile applications can be called the 5th generation. (1st Gen = voice calls, etc., 2nd Gen = PDA apps, email, etc., 3rd Gen = media, music, games, etc., 4th Gen = geographical, maps, location dependent apps). Now comes the burgeoning world of augmented reality – real time feeds of data matched to what your phone’s camera is showing. Augmented reality will, naturally, be available on the tablet. Add to that the mobile phone becoming an electronic wallet, allowing you to throw the plastic cards away.

Watch for that to happen this year. Notice, by the way, how few of these killer applications are ever thought of or delivered by the telcos.

4. The Squeeze on the Telcos and the Cable Companies will become more Evident. There is a gradual and massive squeeze in progress. It’s no secret. Ever since 1996 commentators have been pointing out that the telco industry, cable industry, broadcasting industry, film industry, video rental industry, computer games industry, software industry, publishing industry and advertising industry are all being absorbed by the Internet in a Borg-like fashion. The disruption of these colliding worlds has been visible for a long time. It makes the news every now and then – witness the current spat between Time Warner and Fox.

In the end, it all comes down to “pipes and water.” People are happy to pay for water, but they are less eager to pay for pipes. Pipes are only visible when they fail.  The telcos don’t add perceived value any more and once internet delivered TV gets a decent interface (remember Apple is in this game, so expect it to happen some time, but not this year) both broadcasting and cable move into permanent decline.

But in the mean time – I mean 2010 – the mobile telcos will have a great year as smartphone growth (currently >100%) has them reaping excellent data revenues. The cable companies – not so much.

5. TVs Become Computers. It’s going to happen and I expect it to happen this year. The big question is “who will take the first step?” If the TV manufacturers wait for Apple, they’ll regret it in a big way. Anyway they’ve been collaborating with IBM (with its excellent Cell chip) and building prototypes for long enough, and there are all sorts of opportunities here, from 3D through games software to direct Internet connect (to Hulu, Netflix, and pretty much anyone who will provide streaming content).

If I’m wrong about this one, it won’t be me that’s wrong, it will be Sony, Hitachi, Samsung, Philips and Toshiba that are wrong. For TVs to become computers one of these companies has to come to market with a Computer TV.

6. Windows Moves Into Permanent Decline. We should not underestimate how large the Windows market is and how much underlying momentum exists in that market. Windows spans mobile phones (where it is clearly dying), the laptop and netbook market (where it is still healthy – until the tablet captures everyone’s imagination), the PC and desktop (where it has no challenge at the low end, but has already lost to Apple at the high end – Apple has 90% of that market now). It has held its own very well in the server market where its Linux competitor gradually gains market share each year.

However, Microsoft is now fighting a rearguard action in every market, except the games market where the X-Box is robust and healthy. This should be a clue for Microsoft to work out what went wrong. The fundamental problem is “pipes and water,” yet again. The OS is just pipes that deliver the commodity (applications) that people want. Microsoft Windows won because of its ecosystem and Apple and Google are now triumphant because they have better content ecosystems than Microsoft . By the end of 2010 I expect both Apple and Google to be worth more (as companies) than Microsoft. From 2011 onwards, Microsoft is likely to become a “long tail” company, making revenues from the long tail of Microsoft Office and Windows. This is a very big and very long tail.

7. Google Chrome and Android will be a Success. In the mid-1990s I used to wonder what the world of broken Windows would look like. Well just take a look around: this is what it looks like. Google Android is the only OS that stands a chance of competing with Apple’s OS X, and already everyone knows this, as manufacturer after manufacturer bets on Android for the mobile. Apparently there will soon be 50 Android phones. Android tablets will follow.

Goggle’s App Store is the only other App Store that has demonstrated real momentum and looks like a competitive software ecosystem to the iPhone.

Google has taken to advertising Google Chrome on its search home page. In 2010 we’ll see Chrome win significant market share and become compelling. Google has realized (and I suspect Apple has too) that the browser is the GUI of the cloud. Internet Explorer and Firefox will lose market share.

8. Spinning Disk Becomes More Marginalized. Spinning disk is experiencing a slow death as it gradually gets replaced by Flash Memory and DRAM. Spinning disk still has the cost advantage when it comes to large volumes of data but memory just keeps falling in price (by about 40% a year). So suddenly spinning disks vanished from cameras and from MP3 players and mobile phones. They are now disappearing from laptops. The benefit of faster speed which encourages this. (Incidentally, Blu-Ray, the last of the Mohicans, is already getting marginalized much faster than Sony had hoped.)

What we do not yet have is a committed corporate solid-state disk (SSD) vendor – so in the enterprise we get the halfway house of big disk with a big SSD cache attached to it. That’s fine but there are probably applications that could do better (on a cost per operation basis) with SSD. I’m guessing (and I really am guessing) that such a vendor will emerge this year. Also look for “memory oriented database” products to emerge.

Even if that doesn’t happen, the remorseless fall in memory cost will continue to climb up the device stack. Soon all PCs will have SSD even if servers are still running on the spinning disks of SAN and NAS.

9. Cloud computing will move forward. It’s fun to watch Salesforce.com and Netsuite grow. The Salesforce stock price grew almost as fast as Apple’s last year and faster than Google’s. No slouch, huh? Revenue growth was, of course, much lower in the region of 20% but that’s healthy in a recession. NetSuite was up 96%, by the way. Now that times are just a little better, will we see the momentum continue? Well I have no doubt that it will in the SaaS market. Contrast the performance of these companies with SAP, for example (stock up by only 30%).

The other part of the cloud market — Infrastructure as a Service (IaaS) — appears to have grown at a similar rate (10% to 20%) if estimates of Rackspace and Amazon’s EC2 growth are anything to go by. We can expect better growth this year – maybe towards 30%.

10. Server Consolidation. I’m not talking about virtualization here, I’m talking about the fact that there are too many server vendors and consolidation is inevitable: IBM, HP, Dell, Oracle, Cisco, Fujitsu and others populate this space. It would have happened last year if IBM’s bid for Sun had gone through, but Oracle stepped in instead. Since then, Sun has been hemorrhaging business, while Oracle waited for approval of its bid from Europe and Cisco has entered the market for real.

The margins in the server market are slim and, among the server vendors, only IBM seems to be doing well right now. I have little doubt that by the end of 2010 we will see some consolidation. A logical consolidation would be for Dell and Cisco to get together, but anything could happen. This market is now in flux with Moore’s Law dictating that fewer servers are likely to be sold each year or that growth (by units sold) will be moribund at best. There are too many players.