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10 Huge Technology Stories to Watch in 2014, Part 1

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A look ahead at what will be making the news next year.

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I love technology, but I also hate it.

But our transition to a more digital economy carries profound changes for the way we live and work, and that makes it more interesting than just about anything else.

Even though the Nasdaq (INDEXNASDAQ:.IXIC) is up 30% year-to-date, it has felt like a tumultuous year, courtesy of a hyperactive 24/7 flow of both real and imagined news.

2014's shaping up to be just as crazy, as we're set to see shooting stars, dramatic collapses, and -- perhaps the most fun -- all-out wars.

So I've compiled a list of 10 of the biggest tech stories to watch for, which we'll publish in two parts.

Here are entries one through five, in no particular order:

1. Twitter: A Long-Term Investment?

Twitter (NYSE:TWTR) will go public today and this IPO is going to be a doozy. The company's huge revenue growth and cool factor have investors rolling their eyes at complaints about a lack of profitability.

Now while the Twitter party has the potential to rage on, in 2014, we're going to get potential bumps in the road in the form of earnings.

My sense is that with other mega-growth stories such as Amazon.com (NASDAQ:AMZN), investors aren't terribly worried about Twitter's actual bottom-line profitability. There's a persistent belief that there's a massive pot of gold coming in the far future, which means forgiveness in the present day.

Can Twitter keep up its blistering revenue growth in 2014, at least to justify the massive valuation created by today's near-certain pop in the stock?

We're going to find out.

2. Instagram, and Facebook's Young Teen "Problem"

I put problem in quotation marks for the simple reason that Facebook's (NASDAQ:FB) teen problem is perhaps fictional in the company's actual business operations, but very real in the minds of investors.

On October 30, Facebook reported a spectacular third-quarter earnings report, driving the stock as much as 18% higher.

But the party ended in a jiffy during the conference call when CFO David Ebersman disclosed that Facebook saw "a decrease in daily users, specifically among younger teens." I'm all for more information, but Mr. Ebersman himself identified the data as being "of questionable statistical significance given the lack of precision of our age estimates for younger users."

Facebook is no slouch when it comes to data processing and statistics. So why it would even entertain this topic is a mystery to me, especially since its Daily Active Users were up 25%.

However, this gives Facebook's Instagram unit the opportunity to plug the hole.

Instagram recently pushed out its first ad and should see a ramp up in 2014 -- will that have investors ignoring this silly issue?

3. A New, New Thing From Apple?

The iPhone came out in 2007, and the iPad followed it in 2010.

Is it time for a whole new class of product from Apple (NASDAQ:AAPL)?

On its last earnings call, CEO Tim Cook hinted at new categories of product next year. Apple has always been extraordinarily secretive when it comes to upcoming products, which means a guessing game for investors.

A couple years back, we were dreaming of an iTV, which I regarded as the easiest money Apple would ever make, with an annual revenue potential of $25 billion or greater. There were plenty of headlines implying it was a sure thing, and yet, here we are with no Apple television set on the horizon.

This time around, the gossip surrounds wearable technology, specifically in the form of the iWatch, which for now remains a figment of our collective imagination.

But this segment remains challenging. The highest-profile wearable technology products like Google (NASDAQ:GOOG) Glass and the Samsung (OTCMKTS:SSNLF) Galaxy Gear smartwatch haven't yet proven they're ready for prime time, at least in a mainstream sense.

So I'll throw a question out to readers: Assuming Apple enters a new product category in 2014, what will it be? Post your response in the comments section below.

4. High-End Smartphone Wars

For years, Samsung and Apple have been the dominant forces in the smartphone market. Samsung took an extraordinary amount of market share through aggressive marketing and a rapid stream of product development all across the smartphone market, while Apple was content with its focus on the profitable high-end.

In recent months, the tide of momentum has shifted toward Apple. Its iPhone 5S debuted in September to rave reviews and an enormous opening weekend, helping power a very strong fiscal fourth-quarter earnings report.

Meanwhile, Samsung recently said that its high-end smartphone sales flattened out after several quarters of booming momentum. Its lower-priced mass-market models had to pick up the slack.

So for now, Apple's back on top in the high-end, even as its global market share continues to shrink.

Samsung has got its work cut out for itself ahead in retaking momentum. For years, there has been an avalanche of high-end Google Android-powered phones hitting the market, which makes it tough for any one model to stand out.

And it certainly doesn't help that every reviewer has called the iPhone 5S the best smartphone on Earth.

Can Samsung's Galaxy smartphone lines reignite growth? Or will they get lost in the shuffle while Apple soars?

5. Microsoft's (NASDAQ:MSFT) Next Chapter

In August, Microsoft announced that controversial CEO Steve Ballmer would step down within 12 months.

On Wednesday, Reuters reported that the company has narrowed its list of candidates to "about five" people, including Nokia's (NYSE:NOK) Stephen Elop and Ford's (NYSE:F) Alan Mulally.

The challenges are obvious: Microsoft has to A) gain a bigger foothold within the mobile computing industry, B) keep the legacy PC industry afloat as long as possible, and C) build a better brand name.

The latter objective may be the most important, and most challenging.

Too many consumers view Microsoft with disdain, or worse, apathy, because of past product quality issues and poor product planning. The Xbox brand has a large and loyal following, but gaming has never been a serious profit center for Microsoft.

With a fresh start under a new leader from the outside, will consumers view Microsoft any differently?

Stay tuned for the second part of this series next week!

Related stories:

Google Crushes Dream of Android 4.4 KitKat

Apple Users Can Now 'Knock' on iPhone to Unlock Mac

Position in AAPL
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