On the supply side, uncertainties can also be large, especially the availability of new technologies, their costs evolution and their respective benefits. However, the challenges on the supply side are not as great as on the demand side, and reasonably accurate forecasts can be derived following careful analysis.

The uncertainty on the supply side mostly relates to the availability, the capability and the costs of existing and future technologies. Uncertainty can be considerably reduced by talking to hardware manufacturers, chipset makers, suppliers of enabling technologies, technical experts working in research centres, as well as analysts specialising in technology innovation.

The good news is that many technology characteristics display constant growth rate over time. This means that capacity is growing exponentially and when plotted on a logarithmic scale, capacity is a linear function of time.

This is especially the case at the component level, as shown by the following examples.

• The number of transistor per chip has been correctly predicted by “Moore’s law” to double every 2 years on average since the 1960s, giving an annual growth rate of +40%.
• The number of Million Instructions Per Second for microprocessors expressed in MIPS. This is closely related to Moore’s law and growing at +45% p.a. This is not only the result of shrinking processor size (so increase in transistor density) but also continuous increase in processor clock speed.
• The storage capacity in bits per square inch for various types of memories (DRAM, Hard Disk Drive, Flash Card). For DRAM, it has increased at +40% p.a. for the last 30 years. For HDDs, the growth rate has accelerated from 25% p.a. between 1970 to 1990 to 60% p.a. from 1990 to 1998 and +100% from 1999 to 2003, but has been slowing down to 40% p.a. since then. Do you remember the time when 1 Mega Byte of RAM capacity in a computer was regarded as a real feast? This was the Atari around the year 1988. Today most PCs come with 512MB to 1GB of RAM. The same applies to hard disks: the first Giga Byte hard disk came to market in 1997, but 10 years later most new PCs are equipped with a hard disk of 80 Giga Bytes or more.
• The bandwidth of optical fibre expressed in Mega bit per second (Mbps). This has increased by a factor 10,000 between 1983 and 2003 or +60% p.a. This is partly due to the development of fibre of higher quality grade, partly to the development of better diode and laser technologies.
• The data rate of end-user modems expressed in kbps: modems have evolved from analogue over ISDN to ADSL and further xDSL technologies are being rolled out now. Although data rates have increased in steps rather than year-on-year, the equivalent annual growth has been +55% p.a., or a doubling in data rate every 19 months.
• The energy density per unit of battery weight, usually measured in Watt hour per kg (Wh/kg). This is evolving rather slowly at +10% p.a. within the same battery technology family, for instance Nickel Metal hybrid (Ni-MH), whereas a technology change from Ni-MH to Lithium-ion (Li-Ion) can double the energy density. Fuel-cell batteries are expected to provide a 10-times improvement compared to current Li-Ion batteries. Considering the low battery capacity growth rate compared to other components, batteries are often a limitation factor in product development today. This can be partly compensated by the development of smart power management techniques, such as the time-slicing technology used in DVB-H handsets where the handset receives data in bursts and powers down when not receiving data.

That the IT and consumer electronics industry could maintain growth rate between 30% and 60% over long periods of time is really remarkable, not only because of the great technical performance enhancements involved, but also because of the seemingly insatiable readiness of the market to absorb those capacity increases and build new products around them.