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Week 25, 2008

There has never been so many analysts involved in the semi conductor and electronic transactions industries. For instance, Gartner just announced it raised its forecasts for 2008 semi conductor market from 3.4% to 4.6% growth. At the same time, the Worldwide Semiconductor Trade Statistics Group (WSTS) announced it cut its forecasts by nearly half.

Even when dealing with the present, prediction may be a very difficult art. This week, we publish results from two studies about customer behavior towards mobile payments (cf. below). Nielsen Mobile provides us with a very positive study saying that already 9 million US mobile subscribers have used their mobile phone to pay for goods or services. According to this study, 49% of mobile data users say that it is likely they will conduct mobile commerce in the future. At the same time, Unisys announced the results of its own study that shows 71% of all consumers surveyed in 14 countries would not consider using a mobile device to bank or shop online. According to Unisys study, 59% of all respondents do not trust their mobile devices to provide a secure transaction.

Should we be confident in these predictions?

History is full of too pessimistic predictions. For instance, Thomas J. Watson, IBM CEO, said in 1943: "There is a world market for maybe five computers". Closer to us, Ken Olsen, CEO of Digital Equipment Corporation (DEC) said: "There is no reason anyone would want a computer at home". In our industry, many sinned by underestimating the market: a PA Consulting Group study published in 1990 said: "In the year 2000, there will be 20 million people using a GSM phone". The actual figure was 455 million GSM subscribers in 2000, and more than 3 billion now.

We can always listen to birds of ill omen. But the industry has only been going forward by looking forward to success and investing in technology even when analysts believed there was no market.

Thierry Spanjaard
Chief Editor
Smart Insights