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2004 Predictions

About a year ago, I did a "predictions" column, meaning it's time to revisit my predictions and see if I have the credibility to make more predictions. I'll review my past predictions and grade them below, then give you a few new ones. (One prediction is making it possible for us to offer LindowsOS for the incredible price of $25 and to deliver it faster than ever to customers using the latest P2P technology.)

Last year's predictions:

1) PCs will cost $0
get a $199 LindowsOS computer
Although several ultra-low cost LindowsOS computer offerings did happen, we did not see this come to pass. Several computer stores are now selling $199 LindowsOS computers including Fry's and In Mexico, buyers can purchase a computer for $12.50 per week and use a prepaid calling card for Internet access. That's not quite free, but we're getting closer. Still, I was off the mark on this one.
(0 for 1)

2) Microsoft Windows XP Lite
A year ago, I predicted that Microsoft would be forced to create XP Lite to compete with Linux. That's exactly what is happening.
See: Microsoft readies XP-Lite to keep Linux out of Asia. XP Lite is debuting in emerging markets, and it will take some time to hit the U.S.
Right (1 for 2)

3) Desktop Linux Adoption Will Achieve 10%
Most of the experts pin desktop Linux marketshare at 3% or basically on par with the Apple Macintosh population. It's taken longer then I predicted to build up the distribution network which makes LindowsOS computers available on store shelves so the public can purchase them.

Over the last few months, has been able to expand channel developments with companies like ECS and Seagate and announced more than 1000 stores in North America carrying LindowsOS computers, which could lead to much larger numbers of desktop Linux computers. I'm more confident than ever that desktop Linux will grow beyond 10%. But it's going to take a bit more time.
(1 for 3)

4) Return of the Windows Wars

With heavyweights like Novell and Sun joining the desktop fray, you're seeing a new battle emerge. Recent articles in many major technology, and even business publications like BusinessWeek, are now taking Microsoft alternatives seriously and reporting reinvigorated competition around windowing systems.
(2 for 4)

2 for 4 isn't so bad. I figure the XPlite prediction alone should give me some credibility to give you 4 more predictions.

New Predictions

1) Software and Movie Companies Embrace P2P = Cheaper Products For Consumers
People hear 'P2P' and they think 'file sharing anarchy' - especially content companies. But that's just one facet of the technology and there are new ways to think about P2P that are positive. Lindows announced that we've set up our own P2P servers, not to give away free files for promotion but to help us sell and deliver our commercial software. We're saving a tremendous amount of money, giving better service to our customers and expanding by 10 times or more the number of customers we can serve -- with identical infrastructure costs, which means we can offer our products at much lower rates. It simply makes great economic sense for everyone! All companies delivering larger files, such as big software titles, video games and movies will absolutely be leveraging P2P over the next year. You can read more about why we went this direction and why I believe others will, by checking out our news release.

2) Microsoft Moves From Growth To Profit
Microsoft has enjoyed a tremendous monopoly and parlayed that into spectacular growth. Desktop Linux is now starting to give them pricing pressures which they haven't had for a long time. (See prediction #2 above!) Every desktop that Microsoft loses to desktop Linux means no XP royalty (approx $100) and if you figure another $100 loss in revenue from other applications (Microsoft Office, Visio, Frontpage, etc.), that's $200 of lost revenue. At those numbers, a 100,000 unit deployment of desktop Linux translates into $20 million in lost revenue for Microsoft. To stop the advancement of desktop Linux, they can sell XP Lite but that also means substantially less revenue for Microsoft as well. Microsoft has tried to find another monopoly (smart phones, ISPs, PDAs, set top boxes, TV, watches??, etc.), but other industries are aware of Microsoft's tactics and are wary of working with them. The monopoly Microsoft created is a once-in-a-lifetime occurrence that they will not be able to duplicate. Microsoft will be viewed as a profit company -- still generating huge amounts of cash -- but no longer viewed as a growth story.

3) $499 Linux laptops Under The Christmas Tree
Get a low-cost LindowsOS laptop
Many want this to happen because they believe that PC ownership will explode if laptops can hit this price point. The greater volumes of laptops being sold will enable lower costs for components, and running desktop Linux is the only factor that will allow these units to hit this price target. This would be great.

4) Microsoft Announces Plans for Microsoft Office For Linux

Ok, this isn't my prediction - it's from my President, Kevin Carmony. He believes that Microsoft will be forced to acquiesce to the inevitable growth of desktop Linux. Rather than lose all revenue streams, they'll try to hold onto the core application monies by porting their office suite to Linux. My belief is that they're so threatened by desktop Linux attacking their monopoly stronghold on the desktop that they will do nothing that could be perceived to endorse it. By the time they come around to the fact that it's happening without them (or even in spite of them), it will be too late and products such as OpenOffice and StarOffice will have dominant positions. It will be intriguing to watch who is right on this one - I've got a lunch bet riding on it.

Who is going to win lunch - my President or me?  Have better predictions? Let me hear them by adding your comments on our message boards.

-- Michael

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