IT Industry Survived 2012, but Don't Expect an Innovation Boom in 2013

By Wayne Rash  |  Posted 2013-01-01

IT Industry Survived 2012, but Don't Expect an Innovation Boom in 2013

When I told my editor what my last column of 2012 would be about, I said that I would write about how glad I was that it’s over. But my response may have been colored by the fact that I’d just been writing about the apparently endless patent wars. That’s enough to make anyone feel depressed.

In fact, the patent wars probably are endless. There are several reasons for this. First is that you can make a lot of money filing a patent that’s not valid by threatening to sue everyone for infringing on it. Many companies figure it’s cheaper to just pay up instead of fighting. So what we saw in 2012 will continue in 2013, and in the process hurt innovation, clog the courts, and prove that many in the tech business are cynical enough to see ransom as a perfectly ethical way to do business.

We’ll also see that the downturn in innovation, especially in the wireless business, has become the rule rather than the exception. Industry decision-makers don’t like change because change brings fear of the unknown. The iPhone 5, which at some point will be replaced by the iPhone 5S, which will be another minor upgrade aimed at keeping the Apple sales engine running at full speed rather than show any innovative new features.

Innovation will also die in the Android world as the combination of the patent wars and Android fragmentation take a huge toll on even minor upgrades.

So where does one find innovation? Strangely enough, I see it mostly at Microsoft. The company took a big gamble with Windows 8 and Windows Phone 8. The interface and the workings of the OS on both devices really were different. But Windows 8 in all forms is taking a lot of flak. The reason: it’s not an iPhone and it’s not Windows 7. Many of my colleagues in the technology press share this same deeply rooted conservatism as the companies that make other devices.

The knee jerk reaction here is that if it’s not an iPhone, it must not be good. Or, if the interface isn’t the same as what everyone is familiar with on Windows 7 or the Mac, it must not be good. In 2013 we may start to see some acceptance of the notion that the combination of a touch screen and Windows 8 is in fact a great design. But the forces of conservatism are fighting it.

IT Industry Survived 2012, but Don't Expect an Innovation Boom in 2013

But there will be some things coming in 2013 that actually are improvements. They just won’t happen in areas where the Deep Thinkers can make comparisons to the iPhone or other Apple products. The most important change that nobody cares about (except when they’re in trouble) is the growth of text-to-911 along with the ability to send photos and videos to 911 call centers. Depending on how 2013 goes this new capability could save dozens to hundreds of lives.

You’ll also finally see three of the major carriers roll out 4G LTE service to substantially all of the U.S. by the end of 2013. Sprint will be on the way, but by the end of the year the new Softbank subsidiary will struggling with its Clearwire acquisition and the need to deal with its struggling WiMax infrastructure.

T-Mobile, meanwhile, will roll out LTE as soon as it closes its purchase of MetroPCS. Some of T-Mobile’s new LTE infrastructure will come with the MetroPCS deal. The rest of it will take advantage of new infrastructure that T-Mobile has already installed in preparation. The company’s new combo antenna and transmitter design will allow deployment to take place almost instantly.

T-Mobile and then Sprint may also begin what will become a long fall from grace for carrier subsidized mobile devices. Once customers start to notice that everything costs less when you don’t have a subsidy, Verizon Wireless and AT&T will have to start offering devices that way as well. But it will be a long slow fall. There are plenty of people who feel that subsidized phones are actually cheaper, even if they’re not.

What I’d like to predict for 2013 is an unprecedented period of growth in mobile, wireless and in IT in general, but that won’t happen. First, legislative irresponsibility will continue into 2013, ensuring months of economic uncertainty. While it’s not likely that the U.S. will fall back into recession, it’s likely that economic recovery will slow, ensuring that companies will slow or stop any investments they don’t absolutely have to make.

The pull back in business investment will be accompanied by a continued fall in consumer confidence, which will erode the tech business both directly as fewer people buy products and indirectly as companies lose confidence in their ability to make sales. The GNP won’t drop, but it will slow down from its current anemic pace.

But leaving aside life and death issues, a crumbling economy and a nation run by legislators more interested in their continued employment than about the good of the nation, what about the things that really, really matter in the world? The answer is yes, there will be a new iPhone and a new iPad, but they’ll be evolutionary rather than revolutionary. True innovation and true revolutionary change are out of the picture for now.

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