The 5.94 Billion Person Market Opportunity

A local group of mobile technologists got in a lengthy, interesting and occasionally heated conversation spun off from Apple’s license agreement changes. I think most conversations about smartphone and tablet, open v. closed, Apple v. Google, misses the point. Some of you can be upset by the changes and talk about Apple stifling innovation (with or without proof). But these are all tactical details. I’m far more interested in the big picture. What I wrote:


I think history is actually on Apple’s side. (And Microsoft’s apparently as they are planning on the same closed store infrastructure for Win Phone 7.)

At the turn of the 20th century you had to be very wealthy and a tinkerer to own an automobile. Most layman owned horses and they were relatively low maintenance (feed a horse and it could pull your family around for a decade or more) in comparison, and I would bet most layman said what do I need an automobile for? Starting a car was silly, right? Get out of the car, go to the front, and crank this metal poll around. There were no mechanics so you had to fix it yourself. The first autos catered to the 1% of the world’s population that liked this kind of thing.

Then along came Ford and brought the prices down. More people bought them, they became easier to use and with more people using them, mechanics and others who specialized in understanding the internal workings of an auto came about. While there were some changes for the next 60 years, none effected the auto like the computer, which basically made the home mechanic obsolete. It is unusual to see someone even change their own oil now, let alone fix more complicated things. But almost everyone drives a car today, or knows how.

As the system became more complicated and the tinkerer was boxed out, ironically, more people became users because the entire system became more accessible.

I think the same is happening in computing. Apple isn’t making a smartphone/tablet/entertainment device for you and me, the 1% of the world that are technologists. They are making a smartphone and tablet and entertainment device for the 99% of people worldwide who don’t know an Ethernet cable from a power cord.

We’ve gone from the days of opening up your computer and installing your own hard drives to having to take your laptop to a specialist to get this done. Apple (and Microsoft and others) are just taking the next step, simplifying the design, ability to add content, and make a system attractive to the rest. Whether we like it or not, this evolution is happening.

Look at the top two smartphone/handheld platforms in the US: BlackBerry and Apple. Both extremely simple at doing what they do best (RIM: emailing, texting and Apple: content, entertainment). Since the iPhone and iPod touch introductions in 2007 the two have combined to sell more than 150 million devices. That’s more devices than were shipped in the 20 years of handhelds and smartphone computing before it. Also compare that to laptops, the tool de jeur of technologists everwhere. Nokia, Apple and RIM combined to sell more smartphones than all laptops sold last year, and smartphones are a tiny percentage of the world’s cell phone usage.

I would argue that their appeal to the rest of world is part of what has made them strong players. Of the 6 billion people on this planet, we — those of us who are technically adept — make up less than 1%. They need us to some extent, sure, but catering to the 60 million of us technologists isn’t carrying them forward any more.

Apple, RIM, Nokia, Google and Microsoft, I’m certain, see that the future is selling to the other 5.94 billion people on the planet.

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