10 Huge Technology Stories to Watch in 2014, Part 2
A look ahead at what will be making the news next year.
Two weeks ago, we published one through five of our 10 Huge Technology Stories to Watch in 2014, naming a possible new product line from Apple (NASDAQ:AAPL) and a resolution to Facebook's (NASDAQ:FB) so-called "teen problem" among the plotlines investors will want to follow.
We're here to round out that list with a look at big tech stories in areas ranging from electric cars to video games, and we'll even ponder the fate of a rock-star CEO.
So let's continue:
6. Will Tesla Rise Like a Phoenix?
Tesla (NASDAQ:TSLA) shares fell 37% in less than two months, thanks to a so-so earnings report and three Model S fires in six weeks.
Talk about a mood killer.
It wasn't long ago that Tesla was flying high on monster earnings momentum, critical acclaim for the Model S, and adulation for CEO Elon Musk, who is typically compared to Apple icon Steve Jobs and comic-book genius/superhero Tony Stark (a.k.a. Iron Man).
Musk is a top-flight engineer, marketer, and visionary, but can he keep sales of the groundbreaking Tesla Model S humming in the midst of mostly sensationalist headlines, and thereby re-engage investors?
Just as importantly, will the upcoming Model X, Tesla's take on the SUV, meet the high bar set by the Model S, one of the best vehicles on the planet?
And what about the competition? BMW (ETR:BMW), Cadillac (NYSE:GM), Porsche (OTCMKTS:POAHY), Audi (ETR:NSU), Toyota (NYSE:TM), and others are making pushes in alternative engine technologies (including plug-in electrics, hydrogen models, and various hybrids), which is both confirmation of Tesla's business model as well as a threat to it.
7. Video Game Console Wars Return
Last week, the new Sony (NYSE:SNE) PlayStation 4 and Microsoft (NASDAQ:MSFT) Xbox One gaming consoles came out of the gate hot, each moving over 1 million units in their first 24 hours on sale. And in all likelihood, due to pent-up demand from hard-core gamers, both will turn in strong numbers for the holiday season as a whole.
But as we roll through 2014, we should start to get answers to some of the biggest questions facing the gaming industry.
First, is Nintendo (OTCMKTS:
Secondly, can Sony and Microsoft actually grow the industry?
Sales of physical consoles and games peaked in 2008, which is around when the music-game boom -- remember Activision's (NASDAQ:ATVI) Guitar Hero? -- started to flame out. Will that same casual audience come back for the expensive PS4 and Xbox One consoles, which are jam-packed with mainstream entertainment features? Or are Facebook and iPhone games good enough?
Finally, can one pull ahead of the other? Sales for the consoles' predecessors -- PS3 and Xbox 360 -- each reached about 80 million units life-to-date, meaning they're on roughly equal ground in terms of their embedded fan bases.
8. Google Glass Grows Up
Whether you think Google (NASDAQ:GOOG) Glass is off-the-charts cool or absurdly dorky, you can't deny that it's one of the most interesting technologies out there.
And in 2014, its significance could grow with the rollout of prescription lenses and the release of a mass-market version that is more affordable than the $1,500 Explorer Edition.
The jury's out on how commercially successful Samsung (OTCMKTS:SSNLF) Galaxy Gear smartwatch is. The company claimed 800,000 unit sales in its first two months on the market, but rumors have been circulating that sales to consumers may have actually been as low as 50,000, and that there has been a 30% retail return rate.
Therefore, there's a reasonable chance that Google Glass turns into the first commercially successful wearable computer, which I view as a separate category from products like Nike (NYSE:NKE) Fuel and Fitbit.
9. The Tech IPO Market Gets Tested
Twitter's (NASDAQ:TWTR) IPO went about as well as could be expected. The company raised a whole bunch of money, the stock went up big-time, and there were no technical glitches.
In 2014, we'll find out if Twitter's success actually laid the groundwork for other hot private companies like Dropbox and Spotify to come public.
And that would make sense with the Nasdaq Composite (INDEXNASDAQ:.IXIC) hovering around the 4,000 mark, up over 200% off its 2009 lows.
However, as we've been noting in real time on Minyanville's Buzz & Banter, we're seeing some tears in the tech fabric, namely, underperformance in social media stocks since September -- which was incidentally when Twitter announced it would be going public.
I created the following chart in eSignal to compare the performance of the Nasdaq with the Global X Social Media ETF (NASDAQ:SOCL).
Click to enlarge
The multicolored bar is the Nasdaq, while the blue line represents SOCL price divided by the Nasdaq price to capture the relationship between the two.
While every hot sector needs to cool off now and again, keep your eyes on this trend -- it could be a canary in the coal mine for the tech sector, the strong performance of which is needed for a thriving IPO market.
10. Marissa Mayer: How's She Doing?
Yahoo (NASDAQ:YHOO) shares have more than doubled since high-profile CEO Marissa Mayer joined the company in mid-2012.
However, a good deal of that outperformance is the result of an increase in the value of Yahoo's stake in Chinese Internet company Alibaba (OTCMKTS:ALBCF).
So in 2014, with two-plus years on the job, we're going to see if Mayer's initiatives -- such as the $1 billion acquisition of Tumblr and the company's increased focus on mobile -- will pay off in a challenging environment for traditional display-based Internet advertising.
For better or worse, Mayer has emerged as a major media story in and of herself. There simply aren't many young women with super-stacked résumés heading up major tech companies, and thus every decision she makes gets put under a microscope.
She's a star now, but only time will tell whether she'll keep Yahoo going strong for the long run.
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