Simultaneously destroying the earth and re-creating it, in its own form.
It’s a fascinating time to be in the digital services space; I can tell you.
Everyone now accepts that mobile and tablets are the way to go, but with all the wild predictions and stories, the reasons behind this are often overlooked or misunderstood. It’s the case that the Internet industry, on the whole, missed this coming with over half of marketers admitting they don’t understand mobile very well. In fact, there are very few digital providers that can honestly say they understand both how to go mobile and why it’s important – don’t go mobile just because your digital agency says so. Ask them probing questions about why and where the mobile space is going and at best you’ll hear trotted-out numbers with no comprehension; at worst you’ll get a the blank stare of confusion. I see that a lot.
Mobile was always bigger; but different
With over 3bn mobile devices in use around the world, mobile was always a bigger platform than the PC world, in fact, twice the installed base. So, when mobile started to become smart it had a huge installed base on which to build. Mobile ownership is personal; folks frequently shared PCs, but usually had their own phone leading to a whole different usage profile. PCs were (are?) generally used in fixed time-slots from a single location; mobile is pervasive, location-independent and used 150 times a day.
We must stop thinking about these devices as phones, they stopped being phones a couple of years ago and became universal devices interconnected to everyone and everything else. You might be surprised to see that PC sales have been uninspiring over the last ten years, growing from around 250m to 350m annual sales. Hardly explosive growth. Smart device sales (included smart phone and tablet) were close to zero 5 years ago, and in 2013 predicted to pass 1,350m units sold.
But why?
With smart devices, we’re seeing the merging of phones and technology, and at it’s intersection we find the mobile internet. Contrary to the popular view, mobile internet is not driving smart-device adoption, it’s the other way round. Most digital service offerings don’t work very well with mobile Internet, so it’s being dragged kicking and screaming along behind.
What’s booted this into hyperdrive is the emergence of the tablet. Without the bigger screen and larger form factor, the mobile internet could have stayed as a separate channel to digital services on PCs. However, tablets offer a better user experience, are cheaper to buy and don’t suffer aged-related lag in quite the same way as traditional PCs do. Today, there is (almost) no reason to own a laptop over a tablet (I do know that this is contentious, and recently my 19yr old has ignored all the advice and bought a lappie).
Add into the mix the growth of cloud-based services and it’s now easy to show this is reflected in the death of the PC. This is accelerating as most folks change their PC every 4 or 5 years, but smart devices are changed on a two year cycle. As the current 2008-2012 cycle of PC ownership comes to an end (tablets and smartphones had no discernible adoption rate prior to 2008), the owners will swap from laptops to tablets in droves. By 2016, at the end of the cycle, PCs will represent less than 10% of new sales of tablets/smart-devices.
The market
Quite clearly the growth offers enormous opportunities for those that move into it first. Conversely, it presents huge challenges to the existing players. For example, Microsoft represented over 80% of the connected device sales just 4 years ago. In Q1 of 2013, this dropped under 25%. This is such a rapid and extreme change that it’s fair to say that Microsoft is no longer relevant. As a company, when we “left” Microsoft in 2007, it was a difficult move fraught with compatibility and security issues. Looking back, the plan to become platform-agnostic was bold, successful and really good timing!
There are FOUR cornerstones emerging in this space; Amazon, Apple, Facebook and Google. Each of them in multi-way battles to control eco-systems, e-commerce, the cloud, hardware, connections and user populations. It’s the stuff of legends.
Pretty much everyone else has, or will, become bit players in this end-of-the-world-sized apocalyptic battle between digital giants. They’re all madly stuffing their respective war chests in the run-up to some pretty titanic clashes. This will revolve around closed eco-systems as many folks have a foot (login) in all the camps currently and that’s not going to stay the same over the next 5 years.
At the micro-size, the competing eco-systems are offering a range of digital services wrapped up in pleasant and simple user interface; it’s a simple as that.
What to do about it?
The next time you’re asked about the future of digital marketing can I suggest that it’s worth taking the time to explain the whys as well as the whats. If the future is about smart-devices, cloud-services and eco-systems then that’s where you must invest your time and resource. It’s more than just a smart-phone, remember. Think, then, about offering digital services regardless of eco-system and that means looking to a platform-agnostic solution that successfully delivers high-grade and user-friendly digital services on all devices. The likely candidates in this space are WordPress, HTML5, Context-Awareness and Amazon AWS all wrapped up in a super-responsive framework.
For an in-depth discussion, light chat, argument or just a chance to chew the cud on all things digital drop me an email or Tweet; I’d love to hear from you.
This article was, unashamedly, inspired by Mary Meekers rather dry “Internet Trends Year-End Update“.
By Martin Dower
