When I first started doing industry analysis in 2000, my focus was heavily on mobile computing. Our firm has a legacy of PC industry analysis and, at the time I joined, we were embarking on the major shift from desktop computing to mobile computing. Mobile computing in those days was defined as a notebook or laptop, which were really nothing more than portable desktops. That era set us up for the massive global mobile computing era we are now entering into where the shift is from notebook computing to truly mobile computing with tablets and smart phones. Reflecting on these paradigm shifts helps me appreciate not just how much has changed over the past 10 years but also how much will again change in the next 10 years. Mobile changes everything.
What’s Changed?
Mobile ended Microsoft’s dominance. The once near monopoly on desktop and laptop computing was completely broken by mobile computing. Along with Microsoft’s monopoly ending, so have the old guards of PC computing been challenged by mobile. Intel for example is still struggling to be dominant in the mobile computing era, while Qualcomm has taken their place. Once dominant PC vendors like Dell and HP now only serve a small market while Apple, Samsung, Lenovo, Xiaomi, Huawei, and ZTE are the hardware darlings of the mobile era.
Mobile saved Apple. One could argue the iPod was a key player in ushering in the mobile computing era as it paved the way for key technologies to miniaturize and commoditize. That served as a catalyst for smartphones to become possible. The iPod led to the iPhone, which is the business that drove Apple’s recovery.
Mobile could upend Google. Think about some of the most recent data from Flurry that shows how apps have overtaken the mobile web in terms of engagement. Who does this impact the most? Google. Google’s business is heavily built on the web and a web browser. Declining usage of mobile web browsers and web browsing in general is not good for Google’s core and largest business. I’m fond of the observation that Google de-emphasizes apps because time spent in an app is not time being spent using Google’s search engine. In fact, this observation explains quite clearly why Google is not pushing tablet apps the way many believe they should. Tablets still drive significant web browsing time as the usage of tablets more closely resembles that of PCs than smartphones. If Google was to emphasize tablet apps, which could possibly cause web searches from the platform to go down in favor of app usasge over web usage, then again their biggest business is hurt.
Mobile made Facebook. Facebook in the desktop era was nothing compared to Facebook in the mobile era. Facebook will be a key part of bringing the next billlion consumers into the online conversation. These customers will be mobile first and mobile only. It’s conceivable by the end of 2015 and almost certainly in 2016 Facebook could have over 2 billion mobile users. Facebook’s present and future hinges on mobility.
What’s Next?
These are just a few of the dramatic changes mobile has enabled. Many more are to come over the next two years. Will the current dominant players in mobile survive the shift from one primary mobile connected device to multiples per person? Apps took over the mobile web but what will overtake apps in the near future? What is the role of an OS or a platform in the future? Or is there one? Do apps move to the cloud or stay native? Do operating systems move to the cloud or stay native? How many modems driving connected experiences will we have per person? How many touch based interactive glass screens we will have on our person, in our homes and in our cities? All these and more are questions I like to think about.
I’ve been working in this industry since 1997. I’m also related to one of the foremost technology industry historians. I’ve been taught to view this industry as a journey. On a journey the scenery changes. Mobile has been a driving force of disruption causing sweeping changes in the dominant players from yesteryear. “Post mobile” will bring about many new changes. Crystal balls are not necessary. The only sure way to survive is to recognize paradigm shifts and embrace them when they happen. Innovation brings about change. Both are constant.
Since when did Google was a search company, and not an advertising one ?
isn’t the majority of the popular Apps, the one that advertiser want to pay big money for own by Google
Gmail, YouTube, Map, Play, chrome, Google now, Hangouts, translates, Google Drive, etc
Google get close to 50% of all advertising money on mobile excluding the Play store,
are you trying to mislead your readers on purpose, as so many been doing with Apple?
i don’t get it
Of course they are an advertising company but what asset does over 60% of their revenue come from?
you’re separate Mobile form advertising when it should be the other way around
the more people use their mobile the more information Google get about their need which make their Searches business more valuable to advertiser,
the advertising money always goes where the users are, and right now the majority of users are in many of Google property with a single login, whether is mobile, Desktop, Chromebook, iPhone, iPad, Mac, Smart watch, and Home gear etc, which make Google probably one the most dominant, scalable, accurate and valuable advertising machine the world as ever seen and it’s just the beginning,
and that also explain why wall street value them so much
actually, Wall St. values them, like they do Amazon, because they believe the have no competition. From my discussion with Wall St. this seems to be changing and the upside optimism on Google seems to be waining. They are concerned they will not make the shift from their cash cow of search to something else.
their Probably right
except that their search and to be precise their Advertising business is still in a infancy with a huge Upside and growth potential, and there are no other company right now that is better position to benefiting from the web, mobile, and even IOT than them when it come to scale and potential for advertising $
I agree with your take on Google. They are at a very dangerous junction; most of their revenue comes from the desktop search/advertising business, but the desktop is being replaced by mobile which is not as easily monetised by way of ads. Also the mobile internet is going ‘dark’; most of the data transported is no longer in the form of webpages (which Google can crawl) but in the form of App data (which is invisible to them).
There are lots of things happening at Google that make me uneasy. Their acquisition/ disposal strategy (Motorola, Nest, etc) does not seem to have a clear enough vision behind it. Android is a success that does not make much money for Google itself and which they don’t seem to be in control of. Their run-ins with antitrust authorities will limit their freedom to operate in the future. In short, there is much to distract management from their task to find the next multi-billion dollar business.
“Mobile saved Apple. One could argue the iPod was a key player in
ushering in the mobile computing era as it paved the way for key
technologies to miniaturize and commoditize. That served as a catalyst
for smartphones to become possible. The iPod led to the iPhone, which is
the business that drove Apple’s recovery.”
Minor nit: neither the ipod nor the Iphone had anything to do with Apple’s “recovery” — the company’s recovery from near-death happened thanks to the Imac, OS X, and the disciplined lean approach they adopted to their product lineup after Jobs’s return. The recovery was well underway before the Ipod came out in 2001, and by the time the Ipod became a big money maker (which took a couple of years, IIRC,), Apple had already returned to full health and profitability.
The Ipod catapulted Apple into a higher plane of business size and profit levels, and the Iphone catapulted them again to an even higher tier. But they were a healthy and profitable company without the help of either.
Of course I oversimplified. But Apple wouldn’t be where they are today without the iPod and without mobile. Looking at Apple’s history requires perspective around what made them survive and what made them thrive.
But also mobile wouldn’t be where it is today without Apple. So I think oversimplifying in terms of “mobile saved Apple” is TOO simplistic. Apple saved Apple through bringing to market breakthrough products that pushed the entire industry forward. The way you word it makes it seem as if the existence of the industry in and of itself is what saved Apple, rather than Apple taking big risks and challenging the conventional wisdom of mobile computing.
Agreed but let’s not get lost on the point of my article. The point is how mobile changed the game and in many cases, reset the industry dynamics which led to the opportunity for new winners and new losers.
I could have easily done an exhaustive case study on Apple’s turn around but that was not the point of this article.
I don’t think mobile changed the game. Mobile seemed to be losing it’s luster till the right product emerged. The product being Apple’s is not the point, but that a new method of interaction is what saved mobile and that new interaction and process changed everything.
I wouldn’t call it mobile necessarily. Apple creates personal computers, and they seized the opportunity to make those computers truly personal and consumer-facing, simplifying and abstracting the computer, and the form this took was mobile (which made sense of course, it was perfect timing). When I saw the first iPhone unveiled I thought holy crap Blackberry et al are screwed, Apple just made a Mac that fits in your pocket.
You’re right though, it’s too complex to really dig into in the article you wrote, I generally agree with how you simplified it.
“When I saw the first iPhone unveiled I thought holy crap Blackberry et al are screwed, Apple just made a Mac that fits in your pocket.”
That’s very true. But after watching MS’ BUILD keynote today, my thoughts are on similar lines. Apple will be screwed if they don’t get their act together. Today’s BUILD conference was their most exciting yet.
Hmm, I didn’t see a comparable disruptive moment in anything Microsoft did. I will say it looked much more promising for Microsoft, they do seem to be getting on the right track. What did you see specifically that seemed as important and as disruptive as the iPhone?
The opportunity I see for Microsoft is as the less invasive more privacy and user focused option for Android users.
Universal apps is a killer feature in itself. A user only needs to pay for an app once and it’ll run on phone, tablet, PC, Xbox. I also love what they’ve done by allowing Metro apps run in desktop mode, optimized for keyboard / mouse use.
Cortana seems more powerful than Siri, especially with the Notebooks feature and having it able to be extended with 3rd party app integration and Bing (which is starting to prove to be an excellent investment for MS)
MS finally has all the pieces for a well-integrated stack – with devices, OS, services. Apple has the first two, but iCloud is no match yet for MS’ cloud infrastructure and services.
So we’re talking about the same stuff. I just don’t think any of it is as disruptive as the iPhone was, it’s not on that kind of ‘holy crap’ level. It’s certainly good for Microsoft though, as I said they’re getting on track, but they’ve got years of catching up to do. You don’t surpass the competition by presenting cool stuff at a conference. Let’s wait until Microsoft gets hundreds of millions of new devices into the wild and see how they do.
Also, I think it’s obvious that Apple isn’t standing still, iCloud is coming along, as are all of Apple’s other services, slowly improving, iteration after iteration, much like Apple does with hardware.
Finally, why assume Microsoft’s success in mobile will come at the expense of Apple? I don’t see anything stopping Apple from reaching a billion users and becoming its own self-sustaining ecosystem and market. Microsoft should be looking to Android users, there’s far more opportunity in that crowd.
There’s a difference between “saving apple” (which the ipod and iphone did not do) and “transforming apple” (which they did do).
Agreed. We, a small investment group, that usually invests only in products with time decay, looked closely at AAPL and started to place positions on a regular basis for the next 7 years. We only considered AAPL, not because of their product, but more because of their new process being implemented.
We are still in a manageable exposure with AAPL and trade it’s investment vehicles with risk management products. And, we will maintain our exposure as long as the process is in place.
Mobile, and Apple specifically, has upended a lot of industries. You wrote an article sometime back about a new era for software. I think that is a good companion piece to this. People are doing more with mobile devices as replacements for a lot of things—portable video and audio recording, editing, and live playback, information systems replacing reams of paper, etc, never mind how news is reported and the affect of crowd sourcing such information.
Nice article,
Joe
Lets just Hope that some other Player won’t introduce something that will caught Apple completely off guard just as they did to blackberry and Blackberry to the one before them.
History has a funny way of repeating itself.
That was the point of the article. That every decade, or so, something comes along that hits the reset button. Change and innovation are constant and cause this. Those winning today have no guarantee they will win tomorrow. This is where the companies processes come into play. So an internal audit of how the company works, responds, to change, disrupts itself, etc. are the key things to look for in making a bet on a company for the long haul.
This is one of the reasons I am less bearish on Facebook as I once was. Their latest acquisitions tell us quite a bit about the way they view themselves in the future.
i don’t disagree with this point at all, but you also need to take into consideration that Process is not enough for a company to succeed in the long one, their also need vision and the right people at the right place at the right time making the right decision .
also the challenge big company as Apple face today are more about disruption to their business model than it is about their products and that yesterday product are no guarantee of future success
I think Apple has proven they are not afraid to disrupt themselves. This a key trait. Also their integrated business model actually allows them to react faster than modular businesses.
My overall point, is that it may look like everything is settled in this market but in reality nothing is. I have bear and bull cases for every company I mention.
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