Jun 25 2008
The Next Wave of Innovation
The interesting thing about the history of technological innovation is that it happens in bursts. The era of Hardware was followed by tremendous innovation in Software, after which over a decade of tremendous advances on the Internet ensued. The reason for this is obvious; as a monumental technological breakthrough happens others are able to piggy back and drive it further, but this only happen about once a decade. As an example, when the internet was unleashed it was near impossible for the general population to use. It was only after Netscape tamed the beast by making it significantly more accessible where services created around it - thus beginning the Web 1.0 phenomenon that allowed consumers and businesses to access a mostly static internet. A few years later the major telecommunications companies began to lay the groundwork for high-speed internet connectivity, which enabled interactivity on the internet. This innovation paved the way for Software as a Service, Social Networking, streaming video and many of the other foundations of Web 2.0.
So what is the next breakthrough that will unleash a wave of innovation around it?
It is pretty clear that mobile has tremendous potential to revolutionize both the consumer and business markets. However, this was true for several years and very few businesses or technologies in this space have emerged. There are many reasons for this, but I would like to highlight the three most important ones.
Cellular carriers act as gatekeepers:
Innovation requires openness and compatibility. It is difficult enough to build something, but when self-interested parties have the power to block innovation it is impossible. Take for instance mobile software: the carriers restrict 3rd party applications on their networks and make it incredibly hard to create compelling products. The same is true for handsets (see how long it is taking Android and its partners to launch) and auxiliary services.
Too many technologies, competitors, and options:
For innovation to happen on a platform there must be mass adoption on behalf of both users and developers. However, because there are multiple carriers, developers, and device manufacturers the market is too fragmented for any one platform to gain enough of an audience to incentivize the necessary capital and talent to build cutting edge applications for it.
Monetization:
A critical juncture for all products is the monetization component. It’s not enough to build great software; you also need to figure out a way to make money from it. This just doesn’t happen in the mobile space because the screens are too small, the bandwidth too limited, and the carriers too greedy.
A Paradigm Shift in Mobile is Upon Us:
With the upcoming launch of the iPhone 3G, the stars have aligned perfectly to spearhead the next wave of revolutionary breakthroughs. The sex appeal and price reduction of the iPhone, combined with a pretty rigorous taming of Cingular, and a commitment by Apple to improve on its record of openness have squashed the market barriers to a truly new mobile reality. The iPhone 3G is the one platform that will be popular enough to support the ecosystem needed in mobile and iTunes will allow for seamless distribution of software and provide for a preliminary vehicle for monetization.
Only time will tell what type of advances will follow the iPhone. However, I am certain that we are finally on the brink of a very exciting time in mobile as new business and consumer applications create the next era of innovation.
