4 Tech Predictions for the Second Half of 2014

2013 Google Developer Conference Continues In San Francisco
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It's been a news-making first half of 2014 for technology, but now let's take a look at new iPhones, wearable computing, and even gaming consoles that could change the market later this year.

1. The iWatch is Coming

We've been talking up Apple's (AAPL) inevitable push into wearable computing for years. It's been a couple of years since Pebble revolutionized the watch industry with its Bluetooth wristband that interacts with smartphones for basic apps and functions.

%VIRTUAL-article-sponsoredlinks%Apple is a no-brainer here, but it has stayed on the sidelines as leading smartphone maker Samsung (SSNLF) rolls out not one -- but two -- generations of its Galaxy Gear smart watch. One would think that Apple would be all over this, at the very least as a way to help gain back some share in the smartphone market. If the iWatch only works with the iPhone, it's a safe bet that someone buying Apple's smart watch will stick with the iPhone in the future.

Predicting Apple's next niche isn't for the timid. Many have sworn that Apple is about to put out a full-blown smart television for years, but the iTV appears far from a reality. However, wearable computing remains a serious gap in Apple's consumer electronics product line. It's time to correct the oversight.

2. Google Glass Will Get Cheaper

It's been two years since Google (GOOG) surprised the market with its high-tech eyeglasses that project images and information on the specs. At first Google vetted early adopters to secure influential bloggers and get celebrities on board. Now it's letting pretty much anybody with $1,500 burning a hole in one's pocket become a beta tester.

Google has done its part to justify the steep investment. It has upgraded the product while sticking to its $1,500 price tag (how much it costs Google to make is an interesting question). However, that's not the kind of sticker price that's going to fly these days. The search giant will need to charge less for Google Glass to become a mainstream hit. Cheaper and more widely available access to Google Glass specs will also make the devices seem less creepy.

3. The Xbox One Will Close the Gap with the PS4

It hasn't been even close in the console market. Sony (SNE) may have rolled out the PlayStation 4 just seven days before Microsoft's (MSFT) Xbox One, but it keeps padding its lead. Sony recently announced that it had sold more than 7 million PS4 systems to consumers. Microsoft followed by revealing that it has shipped out (but maybe not sold?) 5 million Xbox One consoles. In other words, there's at least a gap of 2 million between the two gaming titans.

Microsoft is trying. It lowered its starting price to $399, matching the PS4 but eliminating the Kinect motion-based controller as an included accessory. Some of the hottest games right now happen to be Xbox One titles.

Microsoft tried to originally position its box as a state-of-the-art way to view television, but it realized the error of its ways. It's now aggressively wooing gamers, and between the lower price and healthy pipeline of games, it should finally start to gain ground on Sony.

4. The Nasdaq will Continue to Beat the Dow

It's been a good year to buy into the tech-heavy Nasdaq. We've seen the Nasdaq Composite (^IXIC) climb 5.5 percent during the first six months of the year, roughly in line with the historical return rate for secondary stocks.

The Dow Jones Industrial Average (^DJI), on the other hand, has been a bit of a disappointment. The widely followed market gauge of 30 blue chip stocks has only risen 1.5 percent in 2014 through the end of June.

Given the nature of sector rotation, a contrarian would bet on the Dow at this point. But let's not be so quick to cash out on tech. This continues to be a busy year for tech innovation -- something that will benefit the Nasdaq-listed companies -- and we're only halfway done.

Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Apple and Google (C shares). The Motley Fool owns shares of Apple, Google (C shares) and Microsoft. The Motley Fool has a new report on the small company that's a huge part of Apple's newest gizmo.