We like taking a look back to History every now and then and compare the past with what might be going on every day. In many cases we see amazing analogies, but in some others there are nuances that make slight twists.
Following closely as we do the early stages of the booming smartphone market, we cannot prevent ourselves from having a certain déjà vu feeling as we compare it with the PC business some years ago.
We could say for a moment that smartphones today might represent what PCs did in the 1990s, when the market was certainly growing very fast under the impulse of its consumer side. PCs were not unknown to the consumer market, though real technology leaps and breakthroughs were coming from the enterprise segment, and were gradually implemented in the consumer segment as costs were being slashed and PC manufacturers were in the need of keeping their business targets up.
In that process, two big winners consolidated positions at the expense of hardware manufacturers: Intel and Microsoft, who dominated that market, and all the selling effort cost their lives to many hardware assemblers that could not keep the pace. From all the manufacturers, multinational or local, from the 1990s, very few survive to this date. Big names like Dell, HP, Toshiba, Acer, and Lenovo (as ex-IBM) are the toppers of this short list.
Smartphones have followed a very similar way, as they are starting to boom in the consumer market after an initial successful deployment in the enterprise segment. We believe Qualcomm will play the role of Intel, and, naturellement, Android will play Microsoft’s.
We seem not too be in full disagreement with the opinions from others.
However, we see some differences with the Wintel tyranny if we approach the case from a different angle.
First, we can look to the the actual use consumers and professional users give their smartphones: Connectivity. Smartphones are the logical evolution of standard mobile phones because of the connectivity possibilities: Email, internet, social networking… Before that, mobile phones were basically regular phones to do texting as the most advanced feature. Like PCs in the 1990s, which, in very many cases, worked standalone at home, or connected at most within a professional intranet.
Smartphones can work today autonomously and get connected directly to almost everywhere with no necessary need of uniformity in the way they connect (ie needing the same operating system).
Second, we think today technology is much more accessible to people in general, who have grown earlier much more knowledgeable. In the 1990s, when people were acquiring their first PC for home use, they needed something they were familiar to, the Windows familiar environment they had learnt at work. This gave a major advantage to the Wintel tyrants. Today, even kids know how to use a smartphone with no need to depend on any familiar system used before at work, obviously.
Third, in the 1990’s, there was a certain lack of competition, as Apple, the only possible one, was suffering its famous “near-to-death” experience. If you wanted a PC, there were almost no alternatives to Wintel. Today, the smartphone market has been led by Apple, Nokia and Blackberry, and Androids are catching up real fast. Even HP is promising something on Palm’s WebOS, and there is a certain attempt from Microsoft with Windows Mobile 7.
So, yes… there is a risk of having a “Qualdroid” tyranny in the Wintel space… and we indeed pity some of the handset makers that will die for it sooner or later. But, thank God, it seems that there will be intelligent life out of it, and there will be valid alternatives for the benefit of the market.
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