TechLahore's 2011 predictions turned out to be the least accurate EVER! Hmph!

We’ve been publishing since 2007 and TechLahore is hence not exactly a “new” blog. As institutions age, they accrue tradition, and TechLahore is no different. Our December evaluations of the past year’s predictions have been happening now for the past several years. In January, we’ll follow-up with a new set of predictions for 2012.

Here are the past evaluations, in case you’re interested:

1. Evaluating TechLahore’s predictions for 2010
2. Evaluating TechLahore’s predictions for 2009
3. Evaluating TechLahore’s predictions for 2008

So, without further ado, let’s see how we fared this year:

Political Predictions

The parliament is not going anywhere. This PM may or may not last, but the Parliament is well on its way to completing its 5 years. I think it will navigate 2011 in tact. And if that happens, with less than a year to go in 2012, term completion will be well within sight and all but certain.

Spot on. The parliament is here and if the Army Chief’s recent statements are to be believed, no coup is in the offing.

The Congress Government in India will continue to get less popular and Mr. Manmohan Singh’s “clean” image will become a thing of the past. Corruption is going to be a massive story for India in 2011.

The Congress government has become a symbol of inefficiency and corruption in India. India has actually fallen further on the Transparency corruption index. Manmohan has lost the Mr. Clean image for sure. I’ll claim full credit here.

Mr. Obama will see an increase in his popularity rating. It currently stands at -12 according to the Rasmussen Reports. We’ll see how he ends the year up in 2011, but my guess is he could be close to neutral territory. This improvement will come from the improvement in economic conditions in 2011, as well as a greater willingness to work with the Republicans in the House.

Well, I was wrong on this one. Despite the fact that the Republicans were busy ripping each other apart, the Congress being a veritable ball and chain around the Presidency has resulted in a low approval rating. We said we’d use the Rasmussen Reports as our measure, and as per the latest poll in December 2011, Obama is still roughly where he started the year (-13).

Security and the situation in Northwest Pakistan

2010 saw a 35% reduction in the number of terror attacks. 2011 will continue that trend. There will be a close to 25% further reduction in the number of terror attacks. The reach of these attacks will, for the most part, stay limited to the Northwest. The Pakistan Army will make moves in the NWA region, but these will not be in the form of a full-fledged onslaught at the scale of the Swat operation.

According to the Pakistan Institute of Peace Studies, the number of deaths in 2011 fell by almost 40%! This was good news for Pakistanis, and in fact, the last half of the year saw an almost complete halt in terror attacks throughout the country. The few instances that did occur were limited to checkposts near or in the FATA areas.

NATO will begin to significantly ease up on operations in Afghanistan. They will still be there at the end of 2011, but will no longer be looking to aggressively take on the Taliban. Most of the fights between the two parties will occur as the Taliban attack NATO convoys, posts or bases. NATO may retaliate, but will not run a strategic campaign of any significance. 2011 is the year that will see an increase in outreach to Taliban and the beginnings of negotiating at a post-NATO agreement. The biggest priority for the US will now be negotiating an exit for themselves and NATO which will allow them to claim a victory, even though the reality will be far from it.

NATO has done almost nothing against the Taliban in Afghanistan. A couple of half-hearted thrusts here and there, with no real resolve for meeting any tangible goals. They have also talked about allowing the Taliban to setup an office in a Gulf state and have been engaged with negotiations with the so-called “enemy”. In fact, the only military action NATO engaged in this past year which made waves was an attack on two Pakistani checkposts, resulting in the martyrdom of 24 Pakistani soldiers. Viz the Taliban, the NATO mission in Afghanistan is pretty much finished. What remains is a negotiated settlement that allows the US room to depart without being chased.

2011 will see a reduction in the number of drone strikes in FATA, as compared to 2010.

The number of drone strikes this year was significantly less than last year. Here is the data.

Technology Predictions

Android will end 2011 as the dominant mobile platform. Apple will not be able to reverse the trend that began in 2010. I would predict that Android will go from its current 22.7% of the US smartphone market to close to 33%. Overall, while 30% of the current US population of cell phone users use smartphones, by the end of 2011, this 30% will grow to 45% at least. All these 2010  statistics are based on December estimates from Nielsen.

Hear hear! Android is now the defacto King of the mobile OSs. Android now accounts for 53% of smartphone shipments. I had said the US market share for Android will increase to 33%, and in reality, according to Nielsen it has gone past 42%. So I’ll take this one…

Tablets will be the major consumer device story in 2011. This shouldn’t come as a surprise. But non-Apple tablets will continue to increase their market share. Today, the iPad has 95% market share, but by the end of 2011, this will be reduced to 75%.

Yes and yes. Tablets were THE story of the year and non Apple tablets are now coming out the wazoo. As I had predicted, not only did the iPad’s market share fall, it fell a bit faster than I had predicted. According to IDC, it stands at 68% going into the holidays.

Mobile apps for phones and tablets will continue to attract more and more developer talent. I see 2011 ending with close to 700,000 apps available for all the major platforms. Currently, iOS and Android have about 400,000 apps between them and Blackberry probably another 12,000 or so. Windows Phone7 is so new, it hardly has any. By the end of 2011, you will likely see 400,000 iOS apps, 250,000 Android apps, 20,000 Blackberry apps and about 15,000 Phone7 apps. With tablet apps thrown in, this will get close to 700,000.

Apps grew much faster than even I had predicted. Apple announced that there are 500,000 iOS apps. Android stands at 250,000 apps. And Microsoft Phone7 is at 25,000. Blackberry hasn’t grown as fast, but net-net, the prediction I made of the total number of mobile apps exceeding 700,000 has come true. We are actually probably closer to a million than 750,000.

Pakistan’s software industry will see a good year. The momentum on the mobile development side will continue, and I see most of the established companies growing their teams and bringing on more talent. There are few metrics available to truly judge this, but we’ll pick a few leading illustrative cases in December 2011 and see how we fared.

Measured in almost every way, 2011 was a great year for Pakistani software. At APICTA, Pakistanis won more awards than ever before. Whereas 2010 saw one Pakistani mobile app make it to World #1, in 2011 there were two more. And the growth we are seeing has made many experts very hopeful. Current estimates suggest that we will exceed $10B by 2020.

Apple will launch the iPhone 5 this year, but it will be a defensive, bug fix kind of product rather than anything particularly innovative to help it leapfrog the numerous Windows Phone7 and Android devices hitting the market on a monthly basis. The biggest issue with the iPhone 4 was the antenna, and so the iPhone 5 will revolve around better antenna performance. Apple will do the usual dog and pony and claim that the iPhone 5 has the best designed antenna of any phone ever made etc. But in the end, the iPhone 5 will not succeed in stemming the tide of Android and Windows Phone7 phones. The important thing here is that 2011 will be the year of the commoditization of the Smartphone. There will be so many makes and models, with so many different OS choices that will offer basically equivalent functionality, that the market will start to make a shift towards the less expensive devices (i.e. Android).

I felt a shudder when I read that part about the new iPhone not being particularly “innovative”. Look at the new device. It wasn’t even a significant enough upgrade to merit the iPhone “5″ moniker. Apple stuck with 4S. And rightly so. The antenna issue is fixed, and other than the bundling of Siri, which was available as a free download for older iPhones prior to Apple’s acquisition of the company, there isn’t much to write home about. Android has left the iPhone in the proverbial dust. Yes, the iPhone is very much a market leader from an ease of use and proliferation of apps perspective, but Android phones now have faster radios, better screens, faster processors, more storage, better cameras and pretty much everything else.

We’ll learn a lot more about Windows 8 this year. While the central themes will be integration with the Cloud, make no mistake, this will be an honest-to-goodness PC operating system. It will showcase better visualization, add support for bigger, faster GPUs and will standardize 64-bit. We may see the first 128-bit mainstream OS among Windows 8′s several SKUs. No release in 2011 though, just more specificity on what the product will be and perhaps an alpha/CTP.

Windows 8 not only provides better visualization, it has an entirely reinvented Metro based UI for tablets. It does in fact standardize 64 bit and yes, there isn’t going to be a 2011 release. However, as predicted the CTP was launched this year. I’ll take this one… I was even right about it being an honest to goodness PC OS – one click and you’re back to the traditional Windows desktop.

Virtualization, which has commanded the enterprise IT airwaves since 2007-8, will begin to take a back seat to other trends. As services that were once virtualized start to migrate to the cloud and outsource PaaS infrastructures, the value of virtualization in the enterprise will diminish somewhat. Obviously, the level of adoption is tremendous so it will take some time to happen, but 2011 will be the turning point and this will become evident with the decreased “cool” factor and reduced coverage. On the desktop side, inexpensive PCs, numerous new form factors like tablets with native apps and cell phones equipped with projectors etc. will begin to chip away at the desktop virtualization value proposition. I don’t think this shift will be visible enough to most to cause a major reduction in, say, VMware’s stock price (hovering around $90 right now).

Cloud has overtaken the IT airwaves and while Virtualization remains a persistent meme, it is getting less airplay because it is becoming part of the “assumed” stack of capabilities. PaaS infrastructure has definitely grown, along with IaaS ala Amazon. Inexpensive PCs and tablets have been a core IT story throughout 2011, whether it be the Indian Akaash tablet, the Ainovo novo 7, the Amazon Kindle Fire or the about to be released Raspberry Pi. It’s all about sub-hundred dollar price points… So now let’s look at my VMware stock price prediction. I said there won’t be a huge increase because virtualization’s cool-factor will start to subside, but it won’t be significant enough to warrant a big price drop. Well, VMware stands at around $84 right now. A little less than last year, but just a little, as predicted.

Wateen and/or Warid will cease to be an independent operation in Pakistan. Their poor execution has cost them dearly. If it weren’t for the seemingly limitless capital available to them, they wouldn’t have survived as long as they have. They will likely be acquired by another major operator in the Pakistani market.

Wrong. Wateen is around. Crippled and in need of direction. But around.

Netsol stock on the NASDAQ (NTWK) will have a good year, with at least one close above $2.25 during the year.

Wrong. Netsol didn’t have a good year. I was right that it would close about $2.25, because it touched $2.39 in February. But it’s been a slide since then. So even though I was half right at least about the annual high, I won’t take this one.

Financial and Economic Predictions

Pakistan’s GDP will grow by at least 4%, likely 4.3%. The current estimates of two point some are utter nonsense.

Wrong. GDP was actually 2.37%, below what I had expected. Shucks.

The KSE will continue to rise. I expect it to benefit from the improvement in the global economic environment and the greater clarity in the regional strategic equation. I’m projecting an at-least 15% rise, but it could be as high as 25%. If it comes close to the latter, then we may approach KSE’s all-time highs in the 16K range!

Wrong. The KSE, along with world markets, declined. There was a high around 12,700 in January 2011, but the market trended southward given everything that has happened in the world from an economic standpoint this year. It ended the year about 4% in the red.

The US markets, the Dow and Nasdaq, will see an increase of about 8-10%.

Half right. The Dow went up by about 6%, but the Nasdaq declined by slightly less than 2%.

Job data will be watched super closely in the US. There will be some improvement this year, but I don’t think it will be very rapid. My estimate would say a .4-.6% reduction in the unemployment rate by the end of 2011.

Absolutely spot on. In Jan, unemployment was at 9%. By Nov 2011 it had declined by .4% to 8.6%.

The housing market in the US will begin a tedious, painful and slow journey to recovery. With properties having dropped anywhere from 30-70% over the last couple of years, this year will probably see a 5% increase in average home prices.

Wrong. While the housing market does appear to be turning around, it didn’t happen in 2011. There was probably a roughly 3% decline in average home prices across the US.

The Pakistani Rs. will see some weakening this year. It fought off pessimistic estimates of a drop to 100/$ but in 2011 we may see a 5% or so weakening with respect to the US$.

That’s just how it happened. Didn’t touch Rs. 100 to the dollar, but we’re at 90. So that does translate into a little over 5% weakening through the year.

Real estate prices will start to improve in Pakistan in 2011. More importantly, the number of deals being done will go up. I will use the index price of a 1 kanal plot in Gulberg, Lahore as an index when we revisit this in December 2011. The market price is currently at 1 crore 50 lacs.

This one is really hard to call. I have done a few informal tests with a few plots throughout the city and while there hasn’t been a decline, it’s not clear to me whether the asking price is something that is attracting buyers readily. I just don’t have enough data on this one to make a call. If you look at the lahorerealestate.com data for plots in Defence etc. the prices have risen just slightly.

So, where did we end up? 15 right (I’ll claim half credit for a couple) and 7 wrong. I think that might be the worst I’ve ever done. Most of where I fell short had to do with the economy in the US and Pakistan. Essentially, I was expecting a faster recovery than what has materialized. So what do I think will happen in 2012? Well, stay tuned for that post in January! Till then, HAPPY NEW YEAR!

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The best startup ideas from 2011 (Image credit: Blogsaays.com)

Rafe Needleman at C|net just published an interesting piece on the best startup ideas from 2011. Net-net, he says the following trends made it big through a variety of startups:

1) A focus on bringing technology to the physical world: Products that reach outside the digital realm and enable interactions with the physical world in interesting ways. Augmented reality anyone? Location awareness to tie the information experience with the physical? What about devices like medical monitors and other real world sensors that augment the digital experience?

2) Excellent design: This one is a no brainer. If Apple and Steve Jobs taught us anything it is that well designed trumps not well designed even if the more aesthetically appealing product lags behind on speeds and feeds. In 2012, we remain excited to see how some of Apple’s design philosophy gets “embraced and extended” with PC Ultrabooks. But Rafe’s point is not just about computer hardware. He makes a broader and completely accurate point about design now being super important for the success of a product – hardware or software.

3) Mining data: Both in the consumer and enterprise worlds, data is growing at unfathomable rates. On the consumer end, we have things like photographs, notes, documents, music and videos all moving into the cloud, needing to be searched and organized. And on the business side we have ever-increasing digitization of records and transactions, a larger number of surveillance cameras providing higher quality digital footage than ever before, automated supply chains, enterprise application integration, ERP implementations moving down the chain and into the cloud and so on. There is LOTS of opportunity to mine data and make sense of it.

4) Platforms: True, the platform concept is a tough sell as either a new idea or something that too many people can get off the ground. But if you can build a platform and make it succesful by developing a consumption and supply ecosystem around it, it sure as heck makes for a killer business model with lots of inherent barriers to competitive entry. Facebook, after all, is not necessarily the finest implementation of a social network – just the most powerful and adopted platform of all social networking properties. That’s why Google and others can’t unseat it so easily. Building platforms is IN fo’ sho’.

5) Putting people/consumers in touch with each other: A central theme in the information revolution is breaking down barriers to communication. Theoretically, the Internet puts everyone on earth in touch with any other fellow earthling. In reality, the contact needs to be brokered within a particular context (i.e. education, social networking, commerce and so on). Properties that put people in touch with others and create some value from that contact – whether by enabling consumer to consumer commerce, or learner to learner education – are hot.

What do you think are some additional hot idea memes that took off in 2011? What do you think will stay hot through 2012? We’d love to hear your views.

For more on this, directly from the horse’s mouth, visit C|Net.

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Whacksy Taxi is fun, well designed and another entrant in a growing line of successful apps made in Pakistan

Mindstorm Studios is a Lahore based gaming studio which rose to fame a couple of years ago with their brilliant Cricketing title for the PC, called “Cricket Revolution”. Their game, which we covered here at TechLahore, was so detailed and well crafted that they scored a contract with the International Cricket Council (ICC) to develop the official World Cup 2011 title. After these wins, Mindstorm decided to diversify beyond sports oriented games and launched some casual gaming apps for the Android and iOS platforms. Their current best seller is a well designed, fun to play title called “Whacksy Taxi”. This is a Breakout style game which plays at a dizzyingly fast pace and takes the gamer through a tour of various US cities, trying to avoid congested traffic in three lanes.

Here’s a video review by the popular gaming site, AppSpy:

www.youtube.com/watch?v=KKmkDlnBr-c

For more information on Mindstorm and their other exciting gaming titles, visit their website here.

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Hazardous Highway for Android by Pepper.pk has clocked more than 50,000 downloads in under 30 days

After their numerous BlackBerry successes, Pepper.Pk is now in the process of scoring another hit with their Android game, “Hazardous Highway“. The app just won a “Best App Award” from the Android review site, BestAppsMarket, and installs are rocketing. Here’s the install graph from the Android marketplace, which shows adoption over the past month, since the app was released, and presents a very pretty picture:

The download graph from the Android Marketplace shows that adoption has hit the "knee of the curve"

In response to Pepper.pk’s previous mobile application successes, they got a lot of feedback and requests to start developing more aggressively for the Android platform. Hazardous Highway is one of about a half dozen applications they currently sell on the Android marketplace. In comparison to their overall portfolio of 150+ applications, this is not all that significant, but hopefully over time, they’ll build out their Android portfolio further.

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Iran is now in possession of the most advanced US drone, the RQ-170 "Beast of Kandahar"

It seems to be drone season here at TechLahore! Right after we wrote about Pakistan’s Burraq UCAV, one of the hottest pieces of news that came out revolved around the downing or “forced landing” of a top secret US drone in Iran. The RQ-170, also known as “The Beast of Kandahar” was only deployed in late 2009 and represents the absolute cutting edge in American reconnaissance and autonomous drone/UAV technology. Early reports about the incident revolved around the debate of whether the drone had in fact been downed, what kind of drone it was, how it was downed and so on. It took several days for the facts to come to light. Initially, the US had declared via ISAF, that a drone “may” have “strayed” into Iran as a consequence of loss of control during a mission over eastern Afghanistan. On the face of it, this was a ridiculous position to take because it wouldn’t make sense for the US to use a stealth drone for missions over Afghanistan, a country over which it has complete airspace control. Following this, a US spokesperson explicitly confirmed that satellite pictures had shown the drone lay utterly destroyed and was hence not going to be useful to the Iranians. Then further tidbits of information started to come out. That in fact the drone was not operated by ISAF, but by the CIA. That in fact it was conducting a spy mission over Iran. And yes, that the drone was in tip-top shape and was, rather unfortunately, the vaunted RQ-170.

All this was rather embarrassing and quite reminscent of the May Day incident in 1960 when Nikita Khruschev’s Soviet Union shot down Francis Gary Powers’ U2 spy-plane. Interestingly, the Soviets held on to the wreckage for a day or so and let the Americans proclaim that the aircraft downed over the USSR was in fact a “weather balloon”. Once the U2 wreckage was shown, President Eisenhower had to back down from this position. But confidence was high in the US that Gary Powers would have either died, or would have taken the poison pill was he supplied with. Neither happened, and three days into the incident, Gary Powers was paraded in Moscow, leading to a very unfortunate situation for the US State Dept. By the way, if you are interested in learning more about the U2 incident, you should read Michael Beschloss’ excellent book on the subject, titled “May Day”.

But let us come to the topic we are exploring here today. Now that Iran has this drone, what US tech has possibly been compromised? What could the Iranians learn from this and what areas should the US now be super-careful about? Here’s what we think:

1. Airframe and low-observable design: While this is by no means the most important piece of information that can be gleaned from this drone, being in possession of a confirmed LO platform does allow someone to analyze it completely and replicate it. As far as the physical elements of design which contribute to stealth go, Iran should be able to get 100% of that information simply by observing, measuring and modeling this aircraft.

2. Materials: Reverse engineering many materials is entirely possible by studying their chemical composition. For example, RAM coatings. If the RQ-170 employs these, they should be analyzable and replicable given a reasonably advanced chemical industry, which Iran certainly has. It is not unreasonable to expect that Iran will be able to reverse engineer any chemical RAM coatings/”paint” used on the RQ-170.

3. Propulsion: There are two elements involved here; the engine itself, and the techniques used to reduce the engine’s heat/sound signature. Let me start by tackling the first. We don’t know how advanced the power plant in the RQ-170 is, but reverse engineering a complex jet engine may not be possible in a short timeframe. Would it be particularly important? Probably not, because the RQ-170 is not known for its high performance in terms of power or speed. Could Iran pass on information about the engine to the Russians and Chinese and let them study it for what that’s worth? Sure. But this should not be a particularly interesting subject for the Iranians in the RQ-170 context… to our minds, at least.

4. Techniques used for signature reduction: The RQ-170 design will likely employ numerous techniques to reduce the heat (IR) signature emanating from the engine or other active sources in the aircraft. It would also likely use techniques to reduce audio signature. Iran can definitely get a lot of value by studying the design, materials used and techniques employed to achieve this signature reduction. The Iranians have their own stealth project, the “Sofre Mahi”. This analysis could help them advance that stealth fighter development effort.

5. The actual audio signature of the RQ-170: This speaks more to detecting the presence of aircraft like the RQ-170 in future. For example, does the powerplant in the ’170 give off a particular “whine”, i.e. does it have a distinct audio signature? Depending on whether this is a high frequency, it could be possible to deploy audio sensors particularly tuned to listen for this pitch as a means for detection.

6. The all-aspect radar signature of the RQ-170: No design is perfect. There may be certain aspects which produce a higher signature than others. Now that Iran can study the full response profile of an RQ-170, it may learn more about how to detect these aircraft in future using radar configurations.

7. The cameras and sensors: This would be a huge asset for the Iranians in two ways. First, they will now know the exact capabilities of this surveillance platform in terms of resolution, light spectrum performance and numerous other aspects. This means they could plan on how to evade such surveillance. Because it takes a long time to develop new cameras which provide a quantum leap in capability, for some time, the Iranians will now know and understand the US state of the art. This might help them work around these capabilities for the foreseeable future. Second, if not in all respects, at least some pieces of the camera will be useful to Iran from a reverse engineering perspective. High quality optics and CCD sensors may be replicable only with assistance from China, but given the political realities of today, We can safely assume the Chinese will be leveraged in this case. The sensors are not just limited to cameras; legend has it that the RQ-170 can pick up chemical traces and can also intercept electronic communication. All these sensors would be a windfall not only because Iran can now learn how to avoid detection, but also due to the reverse engineering possibilities.

8. The transceivers: There will be numerous transceivers on board and each of these will give the Iranians lots of information that can be used to develop cyber warfare capabilities to neutralize US drones, and also the means to eavesdrop on US communications. For example, the satellite transponder will tell the Iranians exactly which frequencies are used by US drones for sat link-up. Could the Iranians develop balloon-based transmitters that “jam” or “spoof” these frequencies and deploy these over their own country, thus making it difficult for these drones to have a clean sat linkup? The Iranians will also discover the frequencies and methods used for line-of-sight control of these drones – these can similarly be useful to jam, confuse or otherwise take control of the drone. If the Iranians are to be believed, they have already mastered the art of the forced drone takeover, but being in physical possession of the transponders can only help them more. But what about encryption, you might ask. Hang on… I’ll get to that.

9. The algorithms: This is a tough one. One line of thought says that it would be impossible to extract any “code” from this platform. Perhaps. But another line of thinking says that the processors and controllers employed in military projects are not much different to those available commercially. Yes, they have much higher tolerances and quality standards, but a lot of the basic technology is the same. The RQ-170 would likely be full of programmed controllers which carry “firmware” or code that encapsulates various algorithms employed by the aircraft. For example, what does the aircraft do when sat link up is lost? Knowing these behaviours can help Iran advance their own drone and stealth programs, as well as understand how to foil the functioning of the RQ-170 and other US drones (it is likely that many of these control algorithms and “protocols” would be similar for many US drone types). But can the Iranians get to the “code”? Wouldn’t it be encrypted? Yes. It would be. But blackbox reverse engineering techniques can still be used where a certain set of inputs are applied and the output behaviour studied. You may not see the code, but you know what it does.

10. Encryption: This would apply both to the radio/satellite transceiver links as well as to any data or code stored on the RQ-170′s own systems. It is important to point out that just knowing specifically what kind of encryption is being employed, and being in possession of a “decoder”, i.e. the RQ-170, is going to help the Iranians, and possibly the Chinese. Recall that a big effort during WW-II involved the allies just getting their hands on an Enigma machine, the German encryption device. Will the RQ-170 be an “Enigma” for Iran or China? Obviously, the state of the art in encryption has advanced and it won’t be quite that simple. However, it is also important to point out that the Chinese are definitely in possession of equipment that poses a significant decryption threat. Take a look at the top 10 super computers and you’ll find that China was #1 until just a few months ago, and will be #1 again soon. The massive computational power required to decrypt at least some of the information assets aboard the RQ-170 might well be within China’s reach. Quantum computing, in particular, has shown that encryption is not as strong as once thought.

There are probably many more hidden secrets aboard the ’170, but in the interest of keeping this a “Top 10″ list, we’ll take a breather here and see how events unfold.

At the end of the day, we all just want peace and calm in the world. It’s not clear what man has ever achieved by going at his fellow man’s throat. Let’s hope things calm down globally and we can finally live in a peaceful world where Veena Malik’s antics are the only polarizing issue!

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Karachi's beautiful Sheraton hotel was the venue for P@SHA's 2011 Information Technology Awards

A big shout out to Jehanara, President of the Pakistan Software Houses Association (P@SHA), and her management team for organizing a brilliant event last night at Karachi’s gorgeous Sheraton Hotel.

The 8th Annual P@SHA’s ICT (Information and Communication Technology) awards were wonderfully organized, fairly judged and brilliantly presented. The tremendous momentum and growth of Pakistan’s IT industry is plain for all to see and this Awards ceremony is a great showcase. Each year, the entries have been getting more and more sophisticated and wide ranging. A fair number of new companies have been recognized in the 2011 Awards which bodes well for the industry’s future.

If you’d like to check out the list of winners and learn more about the awards, you should click on over to the official P@SHA Awards website.

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Pepper.pk's Ninja Fruit Bash is their third World #1 App on BlackBerry AppWorld in 2011

Lahore-based Pepper.pk has been in the news quite a bit recently and that’s only because they’ve been doing newsworthy things! They’ve just completed a previously unparalleled feat – their third application, Ninja Fruit Bash, has hit World #1 on Blackberry Appworld. With over 25,000 applications now listed on the marketplace, this is no small achievement if you accomplish it just once. But three times, and that too, within the span of a single year, is just unbelievable.

The Express Tribune has covered their achievement here. And you can learn more about the application at this Pepper.pk micro-site focused on the game. Once can see that the finesse in these apps is continuing to become more and more pronounced. Some of Pepper.pk’s earlier games, like Cricket for the iPhone, got straight into gameplay. But now, they’ve taken the time and invested the effort in doing custom art work to walk gamers through the story behind the game. With some cool opening sequences, an eye-catching micro-site and good gameplay, they’re making waves and continuing the path towards becoming a really top tier product company. We will continue to keep a close watch on Pepper.pk’s future endeavours and wish them the best of luck.

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Another Pepper.pk app hits the Global #1 on Appworld!

Ok, I’m starting to sound like a broken record here, but when the news is this awesome, I hardly mind! You may remember that a few months ago we covered Lahore-based Pepper.pk’s Photo Editor application which had made it to World #1 on Blackberry Appworld. Well, they’ve done it again, and this time with a different app, called LED Notifier. How awesome is that?

There are a number of companies in our local industry doing excellent application development for mobile platforms. Some of these are gaming outfits like TinTash and GenITeam, while others are more generally focused, such as TkXel. Pepper.pk’s string of hits – which by the way are not restricted just to World #1 on Blackberry Appworld – but include other honours, such as placement on Handango’s Top 10 list, being picked as a Blackberry Regional Selection, producing a World #4 iTunes utility and much else.

This news has been covered widely and you can read about it over at My Pakistan, GadgetGizmodo, P@kBytes, SizzledCore and numerous other places.

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An Exciting Future! While we won't quite get all the way here in 2011, things will start falling into place.

I just have a good feeling about 2011. I think it’s going to be a great year. I’ve thought a lot about where the optimism is coming from, and I don’t think it’s all subjective. Very important things happened in 2010, such as the incredibly pivotal visit by the Chinese Premier to Pakistan, Pakistan’s establishment drawing a very clear line with respect to interests it is not willing to compromise, wonderful progress with important programs like the JF-17, the arrival of product-focused Pakistani software companies like Pepper.pk who “ruled the world” with their #1 BlackBerry application, the rapid implementation of That Coal projects under the able leadership of Dr. Samar Mubarakmand and much else.

And in addition to all these things there’s the visible progress one can see unfolding in our cities. For example, with a hundred kilometers of brand spanking new, 6-lane highways (The Ring Road) in Lahore, commuting across the city in 2010 was so much easier than in 2009. New services like Qubee, added to the competition on the broadband side and Pakistan’s cellular market continued to grow with near 100M cell phones now in use in the country. To put things in perspective, that’s more cell phones than the number of people living in the UK and Italy put together!

Also, in defence of my optimism, I have to say that I haven’t fared badly with my predictions in the past. That’s not to say I couldn’t be off for 2011, but here’s a glimpse into the past:

1. Evaluating TechLahore’s predictions for 2010

2. Evaluating TechLahore’s predictions for 2009

3. Evaluating TechLahore’s predictions for 2008

With that prelude, let’s get to it. Here is how I see 2011 unfolding:

Political Predictions

The parliament is not going anywhere. This PM may or may not last, but the Parliament is well on its way to completing its 5 years. I think it will navigate 2011 in tact. And if that happens, with less than a year to go in 2012, term completion will be well within sight and all but certain.

The Congress Government in India will continue to get less popular and Mr. Manmohan Singh’s “clean” image will become a thing of the past. Corruption is going to be a massive story for India in 2011.

Mr. Obama will see an increase in his popularity rating. It currently stands at -12 according to the Rasmussen Reports. We’ll see how he ends the year up in 2011, but my guess is he could be close to neutral territory. This improvement will come from the improvement in economic conditions in 2011, as well as a greater willingness to work with the Republicans in the House.

Security and the situation in Northwest Pakistan

2010 saw a 35% reduction in the number of terror attacks. 2011 will continue that trend. There will be a close to 25% further reduction in the number of terror attacks. The reach of these attacks will, for the most part, stay limited to the Northwest. The Pakistan Army will make moves in the NWA region, but these will not be in the form of a full-fledged onslaught at the scale of the Swat operation.

NATO will begin to significantly ease up on operations in Afghanistan. They will still be there at the end of 2011, but will no longer be looking to aggressively take on the Taliban. Most of the fights between the two parties will occur as the Taliban attack NATO convoys, posts or bases. NATO may retaliate, but will not run a strategic campaign of any significance. 2011 is the year that will see an increase in outreach to Taliban and the beginnings of negotiating at a post-NATO agreement. The biggest priority for the US will now be negotiating an exit for themselves and NATO which will allow them to claim a victory, even though the reality will be far from it.

2011 will see a reduction in the number of drone strikes in FATA, as compared to 2010.

Technology Predictions

Android will end 2011 as the dominant mobile platform. Apple will not be able to reverse the trend that began in 2010. I would predict that Android will go from its current 22.7% of the US smartphone market to close to 33%. Overall, while 30% of the current US population of cell phone users use smartphones, by the end of 2011, this 30% will grow to 45% at least. All these 2010  statistics are based on December estimates from Nielsen.

Tablets will be the major consumer device story in 2011. This shouldn’t come as a surprise. But non-Apple tablets will continue to increase their market share. Today, the iPad has 95% market share, but by the end of 2011, this will be reduced to 75%.

Mobile apps for phones and tablets will continue to attract more and more developer talent. I see 2011 ending with close to 700,000 apps available for all the major platforms. Currently, iOS and Android have about 400,000 apps between them and Blackberry probably another 12,000 or so. Windows Phone7 is so new, it hardly has any. By the end of 2011, you will likely see 400,000 iOS apps, 250,000 Android apps, 20,000 Blackberry apps and about 15,000 Phone7 apps. With tablet apps thrown in, this will get close to 700,000.

Pakistan’s software industry will see a good year. The momentum on the mobile development side will continue, and I see most of the established companies growing their teams and bringing on more talent. There are few metrics available to truly judge this, but we’ll pick a few leading illustrative cases in December 2011 and see how we fared.

Apple will launch the iPhone 5 this year, but it will be a defensive, bug fix kind of product rather than anything particularly innovative to help it leapfrog the numerous Windows Phone7 and Android devices hitting the market on a monthly basis. The biggest issue with the iPhone 4 was the antenna, and so the iPhone 5 will revolve around better antenna performance. Apple will do the usual dog and pony and claim that the iPhone 5 has the best designed antenna of any phone ever made etc. But in the end, the iPhone 5 will not succeed in stemming the tide of Android and Windows Phone7 phones. The important thing here is that 2011 will be the year of the commoditization of the Smartphone. There will be so many makes and models, with so many different OS choices that will offer basically equivalent functionality, that the market will start to make a shift towards the less expensive devices (i.e. Android).

We’ll learn a lot more about Windows 8 this year. While the central themes will be integration with the Cloud, make no mistake, this will be an honest-to-goodness PC operating system. It will showcase better visualization, add support for bigger, faster GPUs and will standardize 64-bit. We may see the first 128-bit mainstream OS among Windows 8′s several SKUs. No release in 2011 though, just more specificity on what the product will be and perhaps an alpha/CTP.

Virtualization, which has commanded the enterprise IT airwaves since 2007-8, will begin to take a back seat to other trends. As services that were once virtualized start to migrate to the cloud and outsource PaaS infrastructures, the value of virtualization in the enterprise will diminish somewhat. Obviously, the level of adoption is tremendous so it will take some time to happen, but 2011 will be the turning point and this will become evident with the decreased “cool” factor and reduced coverage. On the desktop side, inexpensive PCs, numerous new form factors like tablets with native apps and cell phones equipped with projectors etc. will begin to chip away at the desktop virtualization value proposition. I don’t think this shift will be visible enough to most to cause a major reduction in, say, VMware’s stock price (hovering around $90 right now).

Wateen and/or Warid will cease to be an independent operation in Pakistan. Their poor execution has cost them dearly. If it weren’t for the seemingly limitless capital available to them, they wouldn’t have survived as long as they have. They will likely be acquired by another major operator in the Pakistani market.

Netsol stock on the NASDAQ (NTWK) will have a good year, with at least one close above $2.25 during the year.

Financial and Economic Predictions

Pakistan’s GDP will grow by at least 4%, likely 4.3%. The current estimates of two point some are utter nonsense.

The KSE will continue to rise. I expect it to benefit from the improvement in the global economic environment and the greater clarity in the regional strategic equation. I’m projecting an at-least 15% rise, but it could be as high as 25%. If it comes close to the latter, then we may approach KSE’s all-time highs in the 16K range!

The US markets, the Dow and Nasdaq, will see an increase of about 8-10%.

Job data will be watched super closely in the US. There will be some improvement this year, but I don’t think it will be very rapid. My estimate would say a .4-.6% reduction in the unemployment rate by the end of 2011.

The housing market in the US will begin a tedious, painful and slow journey to recovery. With properties having dropped anywhere from 30-70% over the last couple of years, this year will probably see a 5% increase in average home prices.

The Pakistani Rs. will see some weakening this year. It fought off pessimistic estimates of a drop to 100/$ but in 2011 we may see a 5% or so weakening with respect to the US$.

Real estate prices will start to improve in Pakistan in 2011. More importantly, the number of deals being done will go up. I will use the index price of a 1 kanal plot in Gulberg, Lahore as an index when we revisit this in December 2011. The market price is currently at 1 crore 50 lacs.

And there we have it. I’ll revisit some of these through the year as they prove to be false or true. Stay tuned, and more importantly, have an absolutely amazing 2011! Happy New Year!

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The Karachi Stock Exchange was a star performer this year, showing near 20% gains, twice the Nasdaq and Dow!

Back in December 2009, I had come up with a list of predictions for 2010. I may have gotten a little lucky this year, because many of these predictions were spot-on to an uncanny degree. Here’s how I fared:

Political predictions

I don’t see Asif Zardari making it through 2010. I think he will be deposed as President.

Couldn’t have been more wrong on this. And for the second time in a row. El Presidente has shown himself to be a better survivor than I am a Futurist!

Though many political pundits talk about it, I don’t believe there will be mid-term elections this year. Whatever changes occur will be with individual and will not displace the entire post-2008 election scenario.

And thus it happened. No mid term elections, even though last year many pundits were proclaiming that this was a near guaranteed event.

Gen. Kiyani is scheduled to retire close to the end of the year, but I believe he will receive a rare 1 year extension of service. However it happens, I don’t believe we will see him retiring this year.

This happened too. Though the extension he received was even more generous than I had thought. Gen. sahib will be at the helm of affairs for another 3 years.

The surge in Afghanistan will not work. If not by the end of 2010 then in 2011 the US will have to sit and talk to elements of the Taliban. The commitment of these forces will prove politically costly for President Obama.

Has this not happened to the letter? Now we have news of a Taliban office opening in Turkey which Mr. Karzai has already supported and in fact requested the Turkish Government for. And Pakistan has come out in support of this initiative as well. We all know that the discussions with the Taliban have been initiated by NATO and not from a position of strength.

Security and the situation in northwest Pakistan

As I had mentioned last year, the Army certainly had an operation up their sleeve. What happened in Swat and South Waziristan was the result of meticulous planning that had occured for months prior to the execution of either campaign. I believe these campaigns will begin to bear fruit in 2010 in the form of a reduction in security incidents in Pakistan. While there will be a definite tapering off in 2010, the nihilists will continue to make their presence felt now and then. Unfortunately this is a process which will take a little bit of time to completely unfold. But 2010 will inshaAllah be more secure than 2009 and quite measurably so.

There was a 35%  reduction in the number of terrorist attacks in Pakistan in 2010, as compared to 2009. The number of people who perished in these attacks was roughly the same, but that was due mainly to the terrorists no longer having the reach they once did. The number of attacks in major cities was also markedly reduced. As I said, the process of securing Pakistan in light of what is going on in Afghanistan will take some time, but certainly, 2010 was an improvement.

The military will continue significant presence in Swat, Waziristan and will expand into other tribal agencies, expanding the writ of the government in an area that was always free of federal or provincial law enforcement since 1947. The action being conducted in these areas is certainly against the foreign nihilists who have taken refuge there and those who would seek to support them, but it also marks an expansion of writ into areas where it never existed previously (by design and by a 1947 era agreement which has clearly outlived its relevance).

The gorgeous Pakistan-China Joint Fighter (JF-17) wowed crowds at Farnborough and Zhuhai

In fact, the only agency where the Army has not entered in force is North Waziristan. And there’s a lot behind that, so I’ll avoid the urge to take that segue. The homes of Taliban terrorists have been converted to Girls’ Schools in the FATA area and the writ of the Government has been extended to areas that no central government has ever controlled in hundreds of years.

Pakistan will continue to implement its strategic weapons programs and reap the fruits of investment in tactical weapons development. In addition to the first JF-17 squadron being weaponized and fully operationalized, we will see the arrival of F-16 Block 52 (Yes, there will be no last minute ‘hitches’), additional Saab Eireye AWACS aircraft, significant progress on the FC-20 fighter program, new air-to-air weapons such as the AMRAAM, and air to ground munitions and the Sniper targeting pod. In addition, the missile program will continue at full speed and more details will emerge regarding the 7,000km range Taimur ICBM. Pakistan will, however, not make any official announcements concerning this system. The much delayed Pakistan Navy next generation submarine deal will be finalized – there is a German vs. French situation going on at the moment but this will succesfully be navigated and a firm deal will take shape in 2010.

It is absolutely irrefutable that Pakistan has made tremendous strides forward in national defence. The only item from the list above that did not materialize was the Sub deal with Germany and/or France. In stead, we know hear that the PN is evaluating Chinese submarines. There are even rumours that the Chinese – in addition to providing a diesel fleet – may also lease a nuclear submarine to Pakistan (an SSGN). Too little is known about this thus far to elucidate much further, but things are definitely in the works.

As for the Taimur ICBM, piece parts have begun to fall into place. The most recent Hatf-V tests in December were rumoured to have included a MIRV (Multiple Re-entry Vehicles) warhead, which goes hand in hand with effective ICBM technology.

In addition to the list above, the Pakistan Air force also took delivery of Iluyshin air-to-air refuellers, Chinese AWACS, in addition to the Swedish Erieye aircraft and the SD-10 Beyond Visual Range Air to Air missile made significant progress in its SD-10B incarnation. The JF-17s will be armed with SD-10As for now as the standard BVR weapon, soon to be upgraded to the B model.

The F-16 Bl 52s were delivered on time, the JF-17 squadron is impressing people within the country as well as without. They participated in a static display at one of the world’s most famous airshows at Farnborough, in the UK, and then wowed crowds at China’s largest air event in Zhuhai.

Technology Predictions

There will be a near-breakout level of success with a Pakistani based mobile software company. At least one company will claim 250K users for its mobile products by the end of 2010. It is very likely that two will.

Pepper.pk announced that they have over 1 million users using their software products, but what’s more, Pepper’s Photo Editor software for the Blackberry made it to World #1 on AppWorld. So not only was there a breakout success, Pakistanis were literally on top of the world as far as this area of technology is concerned. I’ve never been happier at being right about something! More great things will come from Pepper and many other Pakistani technology startups in 2011 inshaAllah.

Netsol will see its fortunes improve in 2010 from a share price perspective. Hovering now at around $1, they can expect to be at least 25% better off by the end of the year.

Netsol fared even better! They are ending the year almost 50% up, at 1.50. They traded as high as $2 in 2010!

2010 is going to be a really bad year for Palm in terms of adoption of the Pre. I had predicted in 2008 that the Hail Mary piece of technology demo’d at CES fail for Palm. It has almost happened, but not quite completely yet. Palm will be relegated to a fourth tier player at best and 2010 will mark a signifciant reduction in its brand equity and influence.

I covered this one earlier this year… Palm got sold to HP and for not all that much. It’s Intellectual Property portfolio (patents) was probably worth 60-70% of the price paid by HP. So the operational parts of the business and the products themselves got valued at almost nothing. The good news is that HP will continue Palm products and may even be coming out with a Tablet leveraging the WebOS platform. Let’s see how it fares. Either way, let’s be clear that the Palm logos you see now don’t represent the good old Palm we knew and loved. That Palm is gone forever.

The Apple Tablet will be released and it will be a major hit. Even though I don’t like Apple, I will buy it  It will be iPhone OS based and will not have the full functionality of a Mac. eReader apps for it will be absolutely killer and very successful.

“Apple Tablet”… what a blast from the past! We all know now that the “Tablet” I spoke of in December 2009 ended up being the massively successful iPad. Yes, I bought it, and the product didn’t just achieve success, it launched a new market for similar devices. eReader apps were in fact a killer app, with Zinio launching digital magazine subscriptions straight to the iPad, and Apple itself showcasing iBooks as a major attraction. And aren’t you impressed that I even got the OS right? The iPad is indeed iOS based and not derived from OS X.

Windows Mobile 7 will come out in 2010 but will not be ‘all that’. It will take several updates and major enhancements to improve it. It will not reverse the market share trend away from Microsoft based phones that has taken hold over the last few years. Android will be the biggest gainer on the Smartphone side and will continue to whittle away at the Windows lead. Microsoft will undergo some pain in this area in 2010.

Yes, Phone7 did launch this year and thus far has sold about 1.5 million devices. In comparison, 300,000 Android devices are being sold every day. Phone7 may still impress, but certainly it hasn’t been a 2010 winner. Android, as I had predicted, went from 5% to 25% market share within a year! It is the biggest tech success story of 2010 in many ways.

ARM based devices and cheaper laptops will start to chip away at Netbook growth. There will at most 20% growth in the Atom based Netbook segment. A market which went from 0 units in 2007 to close to 40M units in 2009.

Netbooks slowed down immensely in 2010. In 2009, about 36.3 million units shipped and according to estimates in 2010 the number will be 40 million. As I had said, growth would be under 20%, and so it was. In 2011, this growth will decline even further.

Nokia is not being succesful in its move from basic and feature phones to truly smart phones. Their UI development and OS skills are not in the top 3 at all. I think this will be Nokia’s downfall… as smartphones become less expensive in markets outside the US, fewer people will choose Nokia as it will no longer provide the best experience primarily due to software reasons. From the low end, Samsung and LG feature phones will continue to become better thus providing competition to the traditional Nokia feature phone niche. All in all, 2010 will see other mobile companies grow at the expense of Nokia.

Wouldn’t change a thing even if I wrote the above earlier this morning instead of last year. As you can see from this IDC report, Nokia indeed lost market share. Samsung launched Bada, focused on foreign markets and the lower end of the smartphone cost spectrum. LG continues to grow. And from the top end you have the iPhone, Android and Windows Phone7 appearing as significant challengers to Nokia.

I was wrong on this one last year, and this is almost too easy for 2010, but then again – you never know! The Software Park Tower in Lahore will be completed and will become fully operational in 2010. It is going to be too expensive sq ft cost wise for most companies so move-ins will be slower than expected.

The building’s done, but rates are super expensive and I think move-ins will be few and far between until something is done to incent companies to move in.

Financial and Economic Predictions

The S&P will show a better than 7% gain in 2010. The Dow and NASDAQ will also come close to 10% gains.

The Dow was under 10,500 at the end of 2009, and is just under 11,600 now. That’s a better than 10% gain, as predicted. The NASDAQ went from just around 2,300 to over 2,650 at the end of 2010, that too is better than 10%. The S&P went from about 1125 to 1260 which handily beats the conservative 7% projection I made.

The recession in the US will be over officially – it technically is already – but you’ll hear common people saying it. There will be a net reduction in the unemployment rate in 2010.

Unemployment went down a mere .2% from Jan to December 2010, as shown here. There’s still a long way to go. The recession is technically over and the markets performed well, but until unemployment is reduced significantly, common people will continue to feel the pinch. I was only half right on this one.

The KSE, having recovered more rapidly than expected in 2009, will show more modest gains of in the 10-15% neighbourhood in 2010.

Well the KSE was the star of the year, showing better than a 20% gain and hitting a multi-year high. It did twice as well as the US markets. There’s something to be said for the fortitude of the Pakistani markets!

The Pakistani Rs. will continue to trade between 82 and 86 to the USD through the year.

Well, here’s the list of daily closes and we stayed under 87, so there you have it!

In summary, of 18 predictions, I was completely wrong on one (Asif Zardari) and half wrong on the US recession (ordinary people have yet to feel the effects of the technical data). Probably my most successful year of predictions thus far! And hopefully I haven’t jinxed myself by saying that.

So, stay tuned for the 2011 predictions. Watch this space!

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