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The Day the Globe Changed...
A recent article in The Wall Street Journal had me lean back in my chair and consider the possibilities... of a world that is about to change.
Approximately 285 million smartphones were shipped in the first quarter of 2014 (Strategy Analytics), and more than a billion smartphones will ship this year, of which Samsung and Apple made up about 50%. Currently the cost of an iPhone 5S is $649 without a contract/discounts, with the Samsung S5 nearly the same. The feature/function sets of smartphones are asymptotically approaching no change beyond the basic workings of the fundamental elements: camera, apps, microphone, speaker, display screen, connectivity, geo-location, and a relatively beefy CPU with memory.
The smartphone market is changing and the article (The Cheap-Smartphone Revolution) states that we are entering into a new era, the post-iPhone era where the price of a smartphone is dropping to $25 to $35. There are currently several such models either in the prototype stage or about to be released.
What used to cost a year's salary in developing countries will be available for three weeks' salary, creating the availability of a highly capable, connected computer literally in your pocket for billions of inhabitants of our globe. There are, of course, challenges to connectivity, but this is likely to be mitigated by efforts such as Google's Project Loon and other similar programs whose goal is to bring connectivity to rural and poor areas of the globe.
The availability of smartphones for the general world population will have unbelievable impact on local economies and increase the potential of general well-being for large portions of our population. It has been shown that smartphones in industrialized countries have accelerated economic growth and provided new entrepreneurial opportunities that were unheard of a few years back. The smartphone obviously touches all aspects of our lives.
Still, the business case for these inexpensive smartphones, connectivity, 99-cent apps, and hardware is somewhat unclear. These rural and poor regions do not have disposable income for even these inexpensive smartphones, unless they offer some clear improvement in people's lives. But...get it right, and the opportunity is off the charts for apps and non-streaming entertainment.
Entertainment is a big driver for smartphones and will continue to be in rural and poorer regions of the world. I believe here the opportunity is for what I call non-streaming entertainment. Non-streaming entertainment is where a local shop could download videos from the Web to an SD card and then make them available to his customers for viewing during travel or at home. This is basic retail: Find a way to get shoppers into your store and keep them coming back. This approach almost harkens to the early days of Blockbuster and solves problems for customers with spotty connections or bandwidth consumption.
Other opportunities for both streaming and non-streaming are possible simple apps dealing with health and self-diagnosis through videos or graphics showing "how-to" and possible local remedies. This could even be a library of SD cards discussing various local ailments.
What if you can get rural farmers to be more productive by understanding when and where to plant seeds based on geo-locating? This "planting app" could use local weather patterns to forecast and determine crop rotations, dramatically increasing efficiency and yields. Have the app add the farmer to the supply chain base where it can provide to the distributor or food producer crop productivity and quality expectations. A video of crop progress can be added to the supply chain, and even a click to call/IM to talk to the farmer can be added for what he's seeing in the field and what is needed. The same process can be used for forestry, fishing, and a host of other food producing activities.
What if your machinery in the field such as pumps, tractors, and mechanical components could be diagnosed simply with a video connection or a link to the actual machinery? One could then create a mesh of M2M smartphones that help with diagnostics and reporting. What if you could add cognitive work like optical character recognition or image and video tagging? The population could get rewarded with payments to micro banks or even in-app with entertainment credits similar to what is happening today with Airtel Money in India, an electronic wallet. Trading is done through virtual money.
Today's app model should be reconsidered, where in poorer regions, the driver for apps is the value of the app. Charge for unlimited use of the app regardless of bandwidth consumption.
The ability to predict and understand the supply chain by the local population - whether that is factory output, crops, water usage, or equipment efficiency - can provide a significant competitive advantage to producers who are able the harness this labor force. These are the early days, but a wave is coming that I call "the commoditization of the smartphone," and like the PC/laptop, the value will be in the software and the ability to communicate. I'm an optimist, and of course there are barriers for connectivity, distribution, local politics, etc. But I believe those will be an issue for a smaller and smaller portion of the population as the smartphone rolls forward.
There will be many entrepreneurial inventions that we can't even imagine, from people who are not yet technologists but soon will have new tools to use to be more productive and competitive. Co-opt the local developers where they exist. They know the local culture and what will work. India alone is expected to have 50 million smartphone subscribers at current smartphone costs, and nearly 300,000 developers. Embrace the coming revolution.