The end of a mobile wave — Benedict Evans
The mobile phone industry has had two waves – first voice and SMS and then the smartphone. The voice wave has taken it from zero to 5 billion people on earth with a mobile phone, and now close to 2 billion mobile phones are sold every year.
In parallel, starting 9 years ago, the smartphone wave converted a larger and larger percentage of those phone sales to smartphones.
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All of this is now reaching an end – the wave is almost over.
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On one level this is just classic saturation – no industry can grow forever. But what happens next?
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At the level of the consumer internet, it’s been clear for some time that Apple and Google won the platform war and that the important questions have moved up the stack – how far can Google and Facebook capture attention and intent, what other interaction models will emerge, how far Android and iOS can shape interaction and consumer behaviour, and so on.
For the hardware companies themselves, though (and that includes Apple), when you’re selling to everyone on earth (something the tech industry has never really done before), what do you do next? TV, once thought of as the next phase after PCs, turned to be an accessory to smartphones, and so are watches and (to some extent) even tablets. VR and AR are some time away with unclear market size, though I think AR could in principle be the next ecosystem after the smartphone.
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This is all rather like the PC clone market of the 1980s – hundreds of undifferentiated companies fighting it out to sell commodity computers built with commodity components running a commodity operating system (though those companies mainly made the PCs themselves, where many phone brands do not). That world in due course led to companies like Dell – people who embraced the volume, low-margin commodity model and found an angle of their own. We’re starting to see equivalent model-creation now.