Predictions on trends for 2005

As the end of a busy year draws near, we asked several business people in the area to make predictions on significant events for 2005 -- in other words, they did the thinking for you, so you can get back to the chips and dip.

The results clearly put telecom in the spotlight for seeing the most action in 2005, but there's plenty to watch in other sectors, including biotech, software and consumer applications.

On marriages

Mergers and acquisitions will increase in 2005 versus 2004, which was already an active year, said Matt McIlwain, managing director at Madrona Venture Group in Seattle.

He said the reason is big technology companies will want to get even bigger, a chain reaction from megamergers in 2004, including Oracle-PeopleSoft and Symantec-Veritas.

"The challenge will be determining which companies are best acquired and which are best held," he wrote in an e-mail.

Tom Huseby, managing partner at SeaPoint Ventures in Bellevue, agreed the desire to get even larger will continue -- also for the wireless industry.

Music cell Revenue from worldwide sales of music delivered via cellphones is expected to reach $2 billion annually by 2009. Source: Strategy Analytics

"Yes, there will be more consolidation," he said. "One more (in 2005) and in the event that someone breaks up the Sprint Nextel deal, two, if not three."

On telecom

Huseby had another prediction for the telecom industry.

The craze to roll out Voice over Internet Protocol (VoIP) services across the country doesn't mean we'll see a surge of new service companies, he said.

"It is a technology that's useful to existing carriers, but not necessarily a technology that's useful for launching new carriers," he said.

Dan Rosen, general partner at Frazier Technology Ventures in Seattle, thinks WiMax, which provides wireless broadband over large areas, will create a second wave of more coffee shop-type hotspots using Wi-Fi.

The reason?

He foresees Wi-Fi hotspots connecting to the Internet through a WiMax signal received by a box plugged into an electrical outlet at the hotspot location.

Neil Strother, an analyst with In-Stat/MDR, said cellphones in 2005 will be integrated with Wi-Fi to accommodate business users. Add to that the capability of downloading music, he said, and the demand will remind him of the "camera-phone craze."

"It's not complicated, and people are passionate about their music," Strother said.

On biotechnology

ZymoGenetics Chief Executive Bruce Carter, a British-born scientist, said he predicts Icos' Cialis will become the second billion-dollar drug to emerge from the Northwest's biotechnology industry. Immunex's Enbrel was the first. Next year will be Cialis' first full year on both the U.S. and European market. It is expected to ring in $500 million to $600 million in sales.

And Jennifer Van Brunt of Signals magazine said the Food and Drug Administration will become more cautious about approving drugs, a worrisome trend for biotech and pharmaceutical companies vying to sell new products.

On software

Madrona's McIlwain said 2005 will be the year the consumer-driven Internet returns. "Strong consumer IPOs in 2004 (BlueNile and HouseValues) will help fuel this trend," he wrote.

And, finally, Rosen said 2005 is the year "when open-source software moves to the mainstream."

Download, a column of news bits, observations and miscellany, is gathered by The Seattle Times technology staff. We can be reached at 206-464-2265 or biztech@seattletimes.com.