Shoppers show how journalists can get it wrong, wrong, wrong

Net Results: Many, if not most, journalists got it wrong when predicting success or failure with consumers. We tended to give them a thumbs down. You've given them a thumbs up.

Take phones. After several flat years for the mobile phone market, embedded cameras are the single biggest driver of a long-awaited surge in sales that has developed since summer. Handsets finally are moving off shelves because consumers are doing what we generally predicted they wouldn't do (at least not yet): replacing old handsets with a camera phone.

On the music side, again counter to many predictions, sales of digital songs and albums are considered the hot consumer e-commerce niche of the future. Research company JupiterMedia predicts music downloads will be a hefty $1.1 million (€916,000) market by next year, jumping to $3.2 billion by 2008.

Apple Computer, which jump-started the market this year with its iTunes Music Store, expects to have sold 100 million songs in its first year. Several new services, and some rejigged versions of existing services, have emerged since Apple put paid-for music downloads into the internet mainstream.

Now analysts predict major consolidation within the market - a sign that it is stabilising.

Most reports I read over the past 18 months predicted camera phones would not have any great appeal for consumers because the cameras aren't great quality and can be pricey add-ons to a handset.

In addition, the point of the camera was presumed to be to act as the enabler of MMS - multimedia messaging services, or sending pictures or video by mobile. MMS, still a bit costly, definitely has not taken off, although mobile operators argue it's a case of chicken and egg - without an established base of camera mobiles, no one had the kit to send an MMS.

Whatever the case, they'll be pleased that mobiles sales are up 21 per cent over the third quarter of last year, according to analysts IDC, and IDC believes the replacement market is being pushed along by camera and colour screen phone sales.

Analysts Gartner forecast camera phones would be the single biggest driver of the market, with 66 per cent of all mobiles in western Europe being camera phones by 2006, up from 9 per cent in 2003.

We'll have to wait and see whether people really want to send MMS messages as much as they seem to like taking impromptu shots and sharing them there and then, or storing them on the phone as a portable mini-photo album.

But I'd guess the operators are right. Once most people can send and receive MMS messages, they'll begin to use that service. Prices will drop because operators will start to compete to offer better MMS service packages to users just as has happened with SMS.

As for music, many of us said sales of digital music over the internet would not happen for ages because, after the file-trading free-for-all of Napster's heyday, too many consumers preferred "free" as their price point.

Many journalists also believed the music firms were too hostile to the Net, and would never come together to sell music to consumers in a collective store, rather than requiring them to jump around the Net, buying from individual labels.

The fledgling services still charged too much for songs or delivered them in ways people didn't want - streamed subscriptions, for example, where the consumer only owned the song as long as the subscription was paid up.

And given the stacks of lawsuits the music industry seemed ready to bring against its own customers, the online music market looked more like a boxing ring than a digital concert hall.

We were wrong, wrong, wrong - at least in predicting the speed of change. Of course if you throw Apple's persuasive chief executive Steve Jobs into the mix, it skews all predictions. You never know what Jobs will pull off. He got some key music firms to march in tune, forcing the market to do an about-face.

As the New York Times said recently, growing sales have not yet produced a viable business plan for the online music market.

Apple pays an extraordinary 70 cents to the music firms of the 99 cents it charges per song. Margins are razor-thin, but the firm readily admits the online store is not intended as a stand-alone but as a way of helping sales of Apple's digital music player, the iPod - and they've soared.

But back to the accuracy of the tech hacks when trying to guess consumer moves. Analysts get it wrong as often as we do, and firms misjudge products, and consumers buy stupid things, and don't buy some great things.

Betting on a new technology is about as failsafe as betting on a horse - although the horse probably won't be obsolete as quickly.

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