It's that time of year again -- where I look back at which of the tech predictions that I made a year ago did and didn't pan out, before moving on to make a fresh set of predictions for the upcoming year.
Here's the first part of a two-part look at my 2020 tech predictions -- they were published in Dec. 2019, and can be found here and here -- and how they held up over the course of a very surprise-filled and tumultuous year.
Prediction #1: 5G Goes Mainstream, But Has a Limited Impact on Smartphone Growth
Verdict: Largely True
As 2020 draws to a close, the vast majority of the high-end smartphones being sold contain 5G modems. And gradually, 5G radios are finding their way into sub-$500 phones, setting the stage for much higher mid-range penetration rates in 2021.
But in the end, COVID had a much bigger impact on how smartphone sales trended in 2020 than 5G. Smartphone demand tumbled in March and April as retail stores were shuttered, before rebounding in the summer and continuing to grow in the fall amid broader strength in consumer hardware spend. China, the market where 5G has arguably seen the most mid-range traction to date, is a relative weak spot right now for smartphone demand.
Prediction #2: Foldable Phones and Dual-Screen Laptops Carve Out Niches
Verdict: Partly True
Thanks in large part to the launch of Samsung's Galaxy Z Fold 2 and Galaxy Z Flip phones, foldables won some more converts in 2020, in spite of their $1,000-plus price points. That paves the way for stronger adoption in 2021, as Samsung and others launch new models at somewhat lower price points.
On the flip side, the rollout of Microsoft's (MSFT) Windows 10X dual-screen laptop platform got pushed out to 2021. Windows OEMs such as Asus, Lenovo and HP did roll out dual-screen laptops relying on proprietary software, but the second screens were generally paired with physical keyboards and often much smaller than the main screen.
Prediction #3: GARP (Growth at a Reasonable Price) Tech Stocks Outperform
Verdict: Nope
Not much explanation needed here. Aided by a giant influx of new retail investors and enthusiasm about COVID-driven behavior changes, high-growth software, e-commerce, cloud services and consumer tech names were bid up to sky-high multiples...and then bid higher still.
2020 was still a good year for many GARP-type tech firms -- think tech giants such as Facebook and Alphabet, or chip industry names such as Micron, Qorvo and Applied Materials. But clearly, the biggest gains this year were typically seen elsewhere (whether the same will hold true for 2021 is of course a whole other matter).
Prediction #4: Microsoft's Stock Goes Through a Digestion Period
Verdict: Nope
Microsoft wasn't one of 2020's biggest large-cap tech winners. But the software giant has still posted a 36% year-to-date gain that leaves its market cap a little above $1.6 trillion.
A raging bull market definitely helped Microsoft out. But so did another year of solid execution, as well as the strong exposure that several Microsoft businesses (i.e., Azure, Teams, Microsoft's gaming unit) had to stay-at-home trends.
Prediction #5: AMD Sees Strong Cloud Momentum...and More Incremental Enterprise Progress
Verdict: True
AMD's (AMD) server CPU sales more than doubled annually in both Q2 and Q3. And from all indications, this growth has a lot to do with major shipment ramps with Internet/cloud giants (i.e., hyperscalers), both for powering internal workloads and powering cloud computing instances.
Aided by the high core counts and price/performance advantages claimed by its most powerful second-gen Epyc CPUs, AMD also continued making headway in the high-performance computing (HPC) server market. But progress appears to have been more limited in the traditional enterprise server market, where Intel's (INTC) customer relationships and developer ecosystem has helped it avoid losing too much share in spite of AMD's technical strengths.
Prediction #6: Nvidia Sees a Pair of Solid GPU Upgrade Cycles
Verdict: True*
I'll attach an asterisk here, since merely calling the upgrade cycles "solid" understates how well things have gone for Nvidia (NVDA) , thanks to both the competitive strengths of its new products and COVID's impact on cloud capex and gaming hardware spend.
In May, Nvidia unveiled an Ampere-architecture flagship server GPU (the A100) that's both considerably more powerful and more versatile than its Turing-architecture predecessor (the Tesla V100). Giant A100 orders from hyperscalers eager to use them for both AI training and inference workloads helped Nvidia's server GPU sales surge to new records in the company's July and October quarters.
In September, Nvidia launched its Ampere gaming GPU line (the RTX 30 series), which delivered major performance gains relative to the Turing-based RTX 20 series both for traditional graphics rendering and real-time ray tracing. The cards generally remain out of stock at major retailers and selling for big aftermarket premiums....and from the looks of things, this state of affairs is set to continue into early 2021.
Prediction #7: Cloud Gaming Sees Only Modest Adoption Among PC and Console Gamers
Verdict: Mostly True
COVID has provided an across-the-board lift for gaming activity. And that, together with new service launches and gaming hardware shortages, has helped cloud gaming gain a little more traction.
Nvidia now claims 5 million registered users for its GeForce Now cloud gaming service, up from 1 million in February, shortly after the service came out of its public beta. And Google has recently seen strong interest in playing Cyberpunk 2077 on its Stadia cloud gaming service.
But still, the overwhelming majority of PC and console gaming involves the use of PC graphics cards and console processors rather than cloud servers (after all, those gaming hardware shortages exist for a reason). We could see some more traction for the latter next year, as Microsoft's cloud gaming service arrives on PCs and Amazon and Facebook's services come out of beta.
Prediction #8: ARM Server and PC CPUs Make Some Noise
Verdict: True
With its performance and power efficiency blowing away that of the Intel CPUs going into comparable, prior-generation Macs, it's safe to say that Apple's (AAPL) ARM-based M1 system-on-chip (SoC) made some noise this fall. And in the server CPU realm, Amazon's ARM-based Graviton2 CPU made some noise of its own, winning the backing of AWS clients such as Netflix, Twitter and Snap.
Meanwhile, Qualcomm (QCOM) extended its ARM notebook CPU efforts to Chromebooks, and ARM server CPU startup Nuvia raised $240 million. While Intel and AMD's x86 silicon still claim the lion's share of PC and server CPU shipments -- and will probably continue to during the next few years -- it's impossible at this point to ignore the collective traction of ARM CPU developers.
Prediction #9: China Dials Up its Efforts to Buy Local
Verdict: Somewhat True
As chip equipment vendors will gladly tell you, China is still investing heavily in building out its domestic chip industry. And in certain markets, such as microcontrollers, smartphone processors and NAND flash memory chips, China has seen a measure of progress.
That said, the sanctions imposed this year on Huawei's HiSilicon chip unit dealt a major blow to China's efforts to lower its dependence on American silicon, and the sanctions later imposed on top Chinese foundry SMIC didn't help either. Looming large here: The dominant positions American firms collectively have in many chip equipment markets, as well as in the EDA software market.
Prediction #10: Waymo and Google Fiber Undergo Strategy Changes
Verdict: Half-True
Waymo definitely saw some major changes in 2020. Alphabet's (GOOGL) self-driving arm received external funding for the first time, and it also inked its first deals with auto incumbents (specifically, Volvo, Fiat Chrysler and Daimler) that involve placing Waymo's hardware and software into vehicles that the automakers plan to sell.
On the other hand, not a whole lot changed for Google Fiber this year. Google is still experimenting with wireless broadband technologies, but hasn't yet announced any plans to launch services relying on them.
Part two can be found here.
