29 predictions for 2015: Fortune’s Crystal Ball

Photograph by Ayzek—istockphoto.com

There’s a lot to look forward to in 2015: The Apple Watch will debut, medical science will advance, and most economists expect global growth to accelerate — led by a strengthening U.S. economy. Sure, China’s juggernaut is slowing, gridlock in Washington looks worse than ever, and there may be a coffee shortage, but most forecasts in the U.S. point to a sunnier 2015. Hopefully they’re right. As any meteorologist will tell you, predicting the future is nearly as difficult as it is important. Herewith are our educated guesses for what to expect in the year ahead. —By Scott Cendrowski, Erika Fry, Leigh Gallagher, Stephen Gandel, Erin Griffith, Robert Hackett, Beth Kowitt, Adam Lashinsky, JP Mangalindan, Chris Matthews, Tory Newmyer, Scott Olster, Daniel Roberts, Anne VanderMey, Phil Wahba, and Claire Zillman


General Images of Chinese Economy From Zhuhai
Cranes operate at a residential construction site in the Gongbei district of Zhuhai, Guangdong province, ChinaPhoto by Brent Lewin—Bloomberg via Getty Images
Photograph by Brent Lewin—Bloomberg via Getty Images

The big question for the 2015 global economy is how dramatic China’s economic slowdown will be. Our answer? Meryl Streep dramatic. A gauge of factory output in November registered an eight-month low, which piles onto a continuing slump in real estate. And this coming spring, expect China to announce its lowest official GDP growth target in nearly a quarter of a century: 7%. (Real GDP won’t outpace it either, as it has in the past.) The bright side? As China takes its foot off the gas, it can focus on reform efforts like dealing with its crippling pollution. The downside: Much lower growth could trigger widespread Chinese loan defaults—with global repercussions.


Starbucks wireless charging
Courtesy of Starbucks

Consumers have long dreamed of ditching their power cords and battery packs. It’s not just fantasy. This fall Starbucks (SBUX) turned on 200 or so cordless charging spots (adapter required) in Bay Area shops and is planning more elsewhere in 2015. Marriott is testing similar stations in some hotels. And companies like Intel (INTC) are developing charging products due out next year. Ubiquitous? No. But it’s a start.


Latte art is displayed during finals of German Barista Championships in Hamburg
Photograph by Morris MacMatzen — Reuters

Gas might be cheap, but a different American fuel is getting pricier: The cost of lattes is primed to increase in 2015 — potentially by as much as 30%. Prices of the morning salve’s main inputs — coffee beans and milk — are both up, and likely to keep rising. But this is all a preamble to 2080, when the coffee bean might disappear from the planet all together. If morning commutes are still around by then, expect mayhem.


Fast-Food Strikes in 50 U.S. Cities Seeking $15 Per Hour
Photograph by Patrick T. Fallon — Bloomberg via Getty Images

Job growth has been faster in 2014 than at any point since the recovery began, but the American public is still down on the economy. Why? Wages for the average worker have barely kept up with inflation in recent years. That looks set to turn around next year. The unemployment rate already sits at 5.8%, close to full employment, and several other indicators suggest that the job market is about to get drum tight: this year saw a record number of job openings and increased labor market turnover. As the competition for labor gets tougher, employers will have to start offering raises if they want to keep talent.


A worker inspects solar panels at a solar farm in Dunhuang, 950km northwest of Lanzhou, Gansu Province
Photograph by Carlos Barria — Reuters

The next year may finally be the tipping point for solar. Panel prices have been coming down for a while. But a recent report from Deutsche Bank predicts that 2015 may finally be the year in which it costs less to produce a kilowatt-hour using solar energy than the traditional coal or oil powered electricity grid in a majority of U.S. states. The report predicts that solar power prices will drop nearly 20% in 2015. Deutsche Bank says by 2016 there will be 47 states in which it is cheaper all in to get your energy from the sun rather than the grid, up from just 10 today.


Jones, founder and chief investment officer of Tudor Investment Corporation, speaks at the Sohn Investment Conference in New York
Photograph by Eduardo Munoz — Reuters

Taken together, the 25 highest paid hedge fund managers took home $21 billion last year, up from $12 billion in 2009, according to Alpha magazine. Those paychecks won’t last. On average, hedge funds have underperformed the market for each of the past five years — the longest stretch on record. This fall Calpers said it was selling all of its hedge fund positions and banks and the mutual fund industry are already creating much cheaper alternatives. Recently, billionaire Paul Tudor Jones cut his fees to 2.75% a year on all his clients’ assets, and 27% of the annual gains. That’s still shockingly high, given that Jones is on a multi-year cold streak that could chill the Arctic. Other managers will soon have to go much lower to keep their clients from hitting the exits.


Courtesy of Apple

Some analysts say Apple could ship 30 million of its computers-on-a-wrist in 2015. That’s hardly an iPhone-size number, but still big revenue for Apple (AAPL). Plus, each sale feeds its phone/payments/computer/apps ecosystem.


Photograph by Wang Zhao — AFP/Getty Images

When reports surfaced that Xiaomi was raising money at a $50 billion valuation in late 2014, many were incredulous. But the Chinese company, which sells high-quality phones at razor-thin margins, overtook Samsung as China’s No. 1 smartphone seller this year. Now enter a half dozen other Chinese smartphone makers—including Meizu, OnePlus, and Vivo. Look for one to have a Xiaomi-like rise next year.


Enterococcus Faecalis
Photogrpah by Media for Medical UIG via Getty Images

The stool sample is about to go mainstream. Sounds gross, but poop is at the center of a medical revolution focused on the human microbiome — or the trillions of bacteria that reside in our stomachs, mouths, and skin. Now that technology has made it easier to study microbes, a growing community of researchers believes our bacterial ecosystems will unlock the secrets of some of the trickiest medical issues, from obesity to allergies. Data-rich stool is being used to develop successful treatments, and VCs, drug developers, and food manufacturers like Danone are very excited.



That’s what the hive mind says, anyway. New York firm Estimize crowdsourced thousands of guesstimates for Fortune to arrive at this 2015 target for the broad-market gauge — a roughly 10% boost from today’s levels.

An ECONOMIC Weather Map For 2015


Photograph by Taylor Hill — Getty Images

When Goldman Sachs (GS) and Vogue agree on the next big fashion trend, you know it’s the real deal. That happened in 2014 when the investment bank’s retail research team and the fashion magazine each predicted the return of the high-rise pant. Call it the “Mom Jean,” a high-waisted, ankle-length, slightly tapered denim trouser currently popular with the likes of Miley Cyrus and Chloë Sevigny. Expect the trend to go mainstream quicker than most — after all, moms are already wearing it.


Jennifer Lawrence may grace magazine covers, but the average teen would rather meet Smosh or PewDiePie. Never heard of them? You’re probably not on YouTube, where PewDiePie (Felix Kjellberg) has 32 million subscribers. He earns $4 million a year in sponsorships and ads, and his peers aren’t far behind. Now YouTube stars are taking mainstream media by storm. Comedy vlogger Grace Helbig landed her own talk show on E!, and Benny Fine of the Fine Brothers has a Nickelodeon show in the works. It’s a case of old media following new.


Hedge fund manager Eddie Lampert spent much of 2014 selling off more big chunks of Sears (SHLD), once the largest U.S. retailer. He spun off Lands’ End and sold most of its stake in Sears Canada. Then in November, Sears floated the idea of selling 300 of its best stores to a real estate investment trust. While many on Wall Street surmise Lampert is just gradually dismantling the struggling retailer to extract value while he still can, he insists he is merely “transforming” Sears into a membership-based, e-commerce giant less reliant on brick-and-mortar. In other words, a 21st-century version of how it all started for Sears in 1888: as a catalogue.


Gun-toting vigilantes have begun to take privacy into their own hands, blasting flying surveillance robots out of the skies. One resident of the small Colorado town Deer Trail went so far as to initiate a ballot calling for drone-hunting licenses. The proposal was shot down, but don’t expect the self-appointed welkin wardens to give up so easily. As the U.S. Federal Aviation Administration draws up commercial standards for unmanned aerial vehicles (regulations are due in September), expect sharpshooters to keep the industry — which has surged 20% annually to $2.5 billion — in their cross hairs.



The last time an Apple service upended an industry was when iTunes burst on the scene — particularly when iTunes first worked with a Window computer. Apple Pay, a handy-dandy service that uses a technology called near-field communications is revolutionary. But it only works on new iPhones. That’s a big number, but still a niche. Competing payments systems should be scared, but only to a point.


Growing Organs
Photograph by Allen Breed — AP

We’re not quite at the level of Dr. Frankenstein just yet, but we’re getting closer every day. Researchers are using human cells (taken from biopsies and donated adult stem cells) to develop biological ink. With the help of 3D printing tech, that ink can be used to print layers of tissue, which ultimately form a living, functioning model of a human organ. In November, San Diego-based biotech firm Organovo announced that it had begun to offer tiny samples of 3D-printed liver tissue — which can last as long as six weeks—to researchers developing drugs for diseases like Alzheimer’s. Why the liver, you might ask? Many drugs never make it past the trial phase because they have such a toxic effect on the liver. What’s on the horizon? The use of 3D-printed kidney tissue and breast cancer tumor models to develop new treatments. And beyond that? Grafting blood vessels and patches of organ tissue into live patients. Stay tuned.


Amazon Echo
Courtesy of Amazon

Next year artificial IQ will get a little EQ. Already this fall, Amazon’s (AMZN) new “Echo,” an in-home device that looks like a speaker but acts like Siri, was a start. Jibo, the Pixar-like “family robot” went a step further, recognizing people, holding conversations, telling jokes and issuing reminders. In 2015, computers that learn (think IBM’s Watson or Samantha from the movie Her) will only become more human.



Same-day delivery services like eBay Now have proven costly and unnecessary. But on-demand services with very specific functions have thrived. For this, we can blame Uber, the wildly popular on-demand car service app. Uber’s seamless simplicity has conditioned us to summon anything we need—paving the way for startups like Washio (on-demand laundry), Glam Squad (in-home hair and makeup), Instacart (groceries), and Canary (the “Uber for weed”). There’s also the simplistic app Push for Pizza, which is exactly what it sounds like. Next year, the instant gratification economy will only get bigger and more ridiculous. Not-so-far-fetched ideas for 2015: on-demand tattoos, paternity tests and day-old bread. Need someone to brush your teeth for you? It’s only a swipe and a tap away. VCs, call us.


SpeedFlex helmet
Courtesy of Riddell

The big story in the NFL this season has been player conduct off the field. But the larger crisis in the sport is head injuries. While critics have said that the actual rules of the game need to change, for now the short-term focus is on helmets. And the most sweeping changes in helmet technology, as well as the eager testing, is going on at the college level. This year, top-dog helmet-maker Ridell rolled out the SpeedFlex helmet, which relies on an “InSite Impact Response System” to better protect against concussions. It’s being tested at big DI programs like Arkansas. Among other features, the helmet disperses energy at the point of impact to minimize damage. But the real excitement is over its software: if an impact falls beyond a certain safe range, the helmet alerts coaches wirelessly. In numerous sports head injury cases—not just in football — a criticism of coaches and sideline staff has been leaving a player in when he should be taken off and examined. Expect this aspect of Ridell’s new helmet to get imitated by other brands trying to catch up, and eventually become standard. In 2015, expect to see helmets in the NFL that communicate to coaches or trainers the moment a player might be concussed. And expect the NFL, which has already settled one big head injury lawsuit from former players, to cite new helmet tech as a sign that it is trying to make the game safer.



After a stratospheric IPO you could dream up, Alibaba’s returning to earth in 2015. There are a handful of reasons BABA won’t go much of anywhere during the year and they have nothing to do with Jack Ma losing his touch. Wall Street’s hype-machine promoted BABA at full speed this fall and the stock popped 60% from its IPO price through November. This next year reality sets in for the company whose market value now equals Walmart. A couple things could temper the excitement. Alibaba (BABA) already staged its first quarterly earnings as a public company, so traders know the company is capable of. Second, Alibaba is expected to make some big investments this year, one of which could include buying Netflix (NFLX). If short-term profits take a hit, the wave of optimism surrounding the company could flatten very quickly.


Doubts Over Government Economic Plans Hit Banking Shares
Photograph by Peter Macdiarmid — Getty Images

The world economy is still recovering from the last financial crisis, but is another just on the horizon? The consensus view is no, but economist David Levy says yes. He argues that China has over-invested in its export sector for years now without commensurate growth in demand across the developed world, and that this dynamic could trigger a Chinese debt crisis in 2015 that takes down an already reeling Europe and ultimately the U.S. This isn’t a popular view, as plenty of China watchers see the globe’s second largest economy continuing to grow at twice the speed of the world at large. But if the global economy does suffer a major slowdown, trouble Middle Kingdom will be the culprit.

This is an expanded version of a feature that appeared in the December 22, 2014 issue of Fortune.

Fortune’s Crystal Ball predictions for 2015:

Washington, reshuffled: What to expect from politics in 2015

Food in 2015: Get ready to eat crickets

Vote: What does the future hold for business in 2015?

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