It Was A Pretty Good Year For Tech

2003 was a pretty good year for the technology industry. Investors certainly were bullish. The tech heavy Nasdaq stock index was up more than 40 percent during the year and unlike those boom years of the late 90s, the growth was driven by some old fashioned concepts like revenue and profits, or at least a reasonable expectation of profitability.

2003 was certainly a good year for digital music. While the recording industry's legal departments intensified their tactics against suspected music pirates, the more creative forces in the industry came out with services that make it easy and affordable to legally download music. None of the services are perfect but Apple's iTunes (www.itunes.com), the newly revised legal version of Napster (www.napster.com) and RealNetwork's Rhapsody Digital Music Service (www.listen.com) are all offering hundreds of thousands of tunes at under $1 a piece. Even Wal-Mart has entered the fray with a discounted downloading service (musicdownloads.walmart.com) at 88 cents a song.

It was also a great year for MP3 players to playback all that music. Apple came out with thinner and higher capacity versions of its highly acclaimed iPod music player, while Dell, Gateway, Rio and others came out with equally impressive (and typically more affordable) competing offerings.

2003 was the year that big-screen plasma TVs became "affordable." Of course, affordable is a relative term, but with prices starting at below $2,500 for 42-inch screens, a lot of families are now enjoying a theater-like experience watching movies and TV shows.

One of the reasons for all the innovation in home theater is that PC companies have jumped into the market. Gateway started it off with its 30-inch (and now 42-inch) models followed by Dell and soon Hewlett Packard. These are companies that know how to move quickly and how to move vast amounts of merchandize through their Internet outlets. 2004 will see an explosion in big-screen flat panel TVs.

There weren't a great many innovations on the PC side in 2003, but it was the year that DVD burning became practical, as most PC makers started offering DVD burners as optional equipment on both desktops and even some laptops. It was also a good year for laptop pricing with Dell and Gateway offering notebook PCs for under $800. eMachines, once known just for low-cost (and low-end) desktop PCs, offers a high-end notebook machine for $1,249 with a DVD player, CD writer and high-speed wireless (802.11g) networking.

2003 was a great year for digital cameras which, for the first time, outsold film cameras. It was also the year that DVD players became a major holiday gift item. Why not? My local Longs drugstore was selling DVD players for $39.

Apple continued to improve its iMac line of computers. Once a brand for entry level inexpensive systems, the latest iMac, features a 20-inch screen, a fast PowerPC G4 processor and a DVD writer as well as a high-speed wireless adapter.

Speaking of wireless, 2003 was the year when WiFi, also known as 802.11, went mainstream. Just about all notebook PC vendors offer an optional built-in wireless adapter, which is a lot more convenient than having to insert a wireless card into the machine's PC card slot. What's more, there are thousands of new hotspots around the world where people with wireless devices can access the Internet. Major players like Sprint, AT&T and Verizon have jumped into the hotspot business along with T-Mobile, which provides service to most Starbucks locations. Boingo (www.boingo.com) has created an international WiFi roaming network giving customers access to a variety of networks as they travel.

Bluetooth hasn't taken off as fast as WiFi but it's starting to gain traction as we enter 2004. Bluetooth is a technology that allows devices to wirelessly exchange information over a short distance. It can be used, for example, to connect a wireless headset to a cell phone or allow a cell phone to grab phone numbers from a personal digital assistant. Likewise, PDAs and PCs can communicate via Bluetooth without the user having to fiddle with cables.

2003 was the year that "Voice over the Internet" (VOIP) became ready for prime time. Companies like Vonage, which offers an all-you-can-use local and long distance service via broadband, began to take off. Even major telephone local and long distance phone companies, including Verizon, AT&T and Qwest, announced that they will offer Internet phone services starting in 2004.

2003 was the year that Congress passed its first national anti-spam law, which takes effect Jan. 1. It's also the year that Microsoft, Apple and a number of other companies began deploying anti-spam technology which, in the long run, is likely to have more impact than the federal law.

2004 is shaping up to be a pretty good year for technology companies and consumers. Dell CEO Michael Dell predicts a very good year for PC shipments while consumer technology companies are also quite bullish. As per products, look for even larger and cheaper plasma and LCD flat panel screens. Microsoft and its partners may finally ship smart watches that display news, weather and stock information as well as the time of day. Just about all cell phone providers will follow in the footsteps of Sanyo and Sprint by offering phones with built-in camcorders as well as still cameras, and look to all major cable and satellite companies to offer their own digital video recorders to compete with Tivo and Replay TV.

By Larry Magid