Benedict Evans, a partner at venture-capital firm Andreessen Horowitz, spoke at Quartz’s The Next Billion conference in October on how mobile technology has moved from its initial, frenzied creation stage to its deployment phase. The questions are no longer whether the technology will work and who will win, but what can be built now that it’s reached such a massive scale. Meanwhile, the new next thing—machine learning—has emerged. Evans says we’re primed to see dramatic changes across industries as a result, from ecommerce to autos.
He posted his analysis publicly on Dec. 9. The slides are above.
Some highlights from the presentation:
- We’ve halfway to connecting everyone: There are 5.5 billion people over the age of 14 and close to 5 billion have mobile phones, about half of which are smartphones.
- The pace of smartphone growth is now eclipsing that of PCs from 1990- 2010.
- Now that the platforms wars are over (Google, Apple, Facebook, and Amazon won), we can move on to more interesting questions: what can we build with this technology? Two industries most likely to be transformed are cars and ecommerce.
- The scale of the new technology companies is unprecedented. Revenue from Google, Apple, Facebook and Amazon is more than 3x that of Microsoft and Intel, the winners of the PC era.
- This means that these companies are “giants in the economy, not just in tech.” They’re impinging upon areas outside technology. For instance, Apple is the 10th largest global retailer by revenue.
- Machine learning has arrived and it’s at the beginning of its own creation phase. That’s led companies such as Google to declare an “AI-first” approach.
- Progress in machine learning was unlocked by learning from massive data sets instead of programming rules. Still, we’re in very early days.
- There’s a new generation of computing that has come from mobile. Our new computers are intensely personal, more sophisticated, and easier to use than what came before them.
- New computing, new scale, and new interaction models will change industries far beyond technology.
- Retailers may meet the same unhappy fate of newspapers over the last 20 years: rising fixed costs, falling revenue, and unbundling of their profitable products as people’s buying habits shifted. “Everything the internet did to media will happen to retail.”
- Ecommerce is still better at logistics than demand generation: “the internet lets you buy, but it doesn’t let you shop.”
- The sector needs a mechanism for suggestions and discovery, a Facebook or Buzzfeed for products.
- Cars are tracing the same evolution as cellular phones over the last decade: hardware turned into a commodity, software gained value, and the functionality of the device is now totally different.
- Leading tech companies now spend as much on capital expenditures as car manufacturers (OEMs)