It's calculated very scientifically by something called 'Handelns Utredningsinstitut' and has been since 1988.
The criteria are that it needs to be 1) something that is new or that has sparked a new interest 2) something that will be sold in many units and 3) something that represents the time we live in.
Going back through the list I found a lot of funny things, check this out:
1988 A bread maker
1990 A wok
1994 A mobile phone
1997 An electronic pet
2002 A cook book
2004 A flat screen TV
2007 A GPS
2008 An experience
2009 A "nail-mat" (?)
And look! I'm right on trend, Santa brought my present early..!
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