by Thomas Wailgum

The Problem I Have with Long-Range IT Forecasts

May 23, 20063 mins

Last week, I received a curious e-mail from an In-Stat marketing manager:

>>Dear Member of the Press,

Please note that there was an error in a press release you received from In-Stat earlier today. The title of the release read:

Global Wireless Handset Market Grows 23% in 2006 and Will Reach $500 Billion by 2009

The correct title should read:

Global Wireless Handset Market Grows 23% in 2006 and Will Reach $250 Billion by 2011

>>My apologies for any inconvenience caused.

Awwww, I see. Thanks. … Wait! What? Did you say $500 billion by 2009 versus $250 billion by 2011? Wow. That’s a big difference.

I e-mailed the marketing manager to see what happened – was it a really big typo or did some analyst change his mind at the last second? I quickly received a call from Bill Hughes, a principal analyst at In-Stat who researched the data for this report. He said that it was an honest mistake he made when putting together the report and the press release. “It’s going to be one of those days,” he sighed.

Honest mistakes happen to the best of us. But over the weekend, after putting the matter aside, I got to thinking about technology forecasting: Does his honest oversight really make a difference to CIOs, IT staffers or the handset vendors — is it that big of a deal to people who saw the study? For example, if Hughes had said that the global wireless handset market would grow to $750 billion by 2010, would you have believed that? How about $1 trillion by 2012? And for that matter, do you really believe his original assertion: $250 billion by 2011?

Hughes predicts that the growth he sees in the wireless handset market will have a huge effect by 2011: “To put this in perspective, if wireless handsets were a sovereign country, it would be the 53rd largest economy, right behind Ireland, but growing more than twice as fast as China.” That’s some good growth.

I guess what I’m getting at is this: Do you take any of these long-range predictions seriously? If I’m Palm or RIM or HP, for that matter, does this have any bearing on their long-range planning or forward-looking strategies? Hughes thinks it does. “[Manufacturers] do monitor this for a reality check,” he says.

By no means am I trying to attack Hughes, In-Stat or belittle what they do – I’ve used their technology predictions and insights to buoy many story angles. But I’d like to know if these far-ranging predictions are useful for enterprise strategy sessions, or are they simply eye-candy (and good copy for us journalists). I’m guessing it’s the latter.

Tell me if you’re a believer or not. Here’s the release about Hughes’s study.