The Next Big Thing, And Who Will Own It

Inertia, consumer whims and ecosystems will have a big effect on who wins or loses, regardless of their budget.

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At the beginning of this decade a writer for a powerful newspaper told me that, come hell or high water, she wasn’t giving up print—no matter how important online got to be. I had to think about that for awhile before answering, “It may not be your choice.”

That newspaper is now a shadow of what it once was, but the statement keeps reminding me of some of the brash claims being made by electronics companies today. No matter how brilliant an idea seems on paper, it can be a colossal flop for unanticipated reasons. And no matter how idiotic something may look to established players, you always have to take it seriously. Who would have thought 20 years ago that you could sell a cup of coffee for nearly $4?

Intel’s entry into all markets doesn’t mean it will succeed in those markets. Likewise, just because the market leaders it is challenging now have dominance in those markets, it doesn’t mean they’ll keep it. IBM invented the PC and lost the market to lower-priced competitors. Apple didn’t invent the MP3 player, but it now owns the market, while its share of the PC market remains small.

What’s getting interesting in the electronics world, though is that battles are no longer being fought by one company anymore. They’re being fought by ecosystems, and how those ecosystems fare against each other is unknown. To some extent it depends on how committed they are to each other. Is this like NATO or is it like the Allies in World War II?

Second, it is uncertain what will win out in technology. Will growth come at the low-end of the consumer market, or will there be enough growth at the high end to sustain more expensive development. To some extent, that depends on how fast developing markets mature and what their consumers are willing to buy, as well as how fast more mature markets recover from a very long and deep downturn.

And finally, it all depends on what sort of business context can be built around all of this. Apple’s genius in the MP3 world was iTunes. What that will be in netbooks, mobile Internet devices, set-top boxes and a variety of new form factors is unknown. And no matter how much money is thrown at solving the unknown, the results may still be unpredictable.

–Ed Sperling


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