Select your localized edition:

Close ×

More Ways to Connect

Discover one of our 28 local entrepreneurial communities »

Be the first to know as we launch in new countries and markets around the globe.

Interested in bringing MIT Technology Review to your local market?

MIT Technology ReviewMIT Technology Review - logo

 

Unsupported browser: Your browser does not meet modern web standards. See how it scores »

Mobile computers are spreading faster than any other consumer technology in history. In the United States, smartphones have even begun reaching the group of relative technophobes that consumer researchers call the “late majority.” About half of mobile-phone users now have one.

The big question facing technology companies, and the subject of the upcoming stories in this month’s MIT Technology Review Business Report, is how to make money from this rapidly expanding technology.

Wireless carriers make money at the greatest scale. Globally, 900 of them take in $1.3 trillion in revenue each year, about four times the combined revenue of Google, Apple, Microsoft, and Intel. Yet individual device makers, notably Apple, capture more profit. That company’s markets aren’t restricted to one network. Its products, by bringing personal computing to phones, have sharply increased their capabilities and value.

In 2007, the average wholesale price of a mobile phone was $120 and falling; analysts talked of market saturation because nearly everyone who could afford one had one. But since then, prices have leapt by 50 percent, and the revenue from all mobile handset sales has doubled.

Apps and services still account for the least amount of money in mobile computing. Mobile advertising brings in only $9 billion as yet. But here is where the most opportunities lie. Facebook has a monthly audience as large as any ever reached. And in January, it said for the first time that more of that audience was coming from mobile devices than from PCs.

The swings in the company’s value—it was worth $104 billion at its IPO, then $42 billion, and now more than $60 billion—are a measure of its No. 1 ranking among apps (23 percent of the time that Americans spend on mobile apps is devoted to Facebook) and the uncertainty about whether it can profit from ads on the small screen. But the rise in its stock price reflects the fact that it has started to.

Who isn’t making money is a story too. For example, Microsoft’s share of mobile computing is negligible. The company “didn’t miss cell phones,” Bill Gates said in a TV interview in February, “but the way we went about it didn’t allow us to get the leadership. It was clearly a mistake.” Gates underplayed what’s been lost. In 2009, his company’s software was on 90 percent of personal computers. At the end of 2012, it’s on just 23 percent of devices sold, when smartphones, tablets, and PCs are all accounted for.

That was fast. Now, watching the fever lines on tech analysts’ charts cross and collide has become a kind of spectator sport. Smartphones outsell PCs. Touchscreens outnumber keyboards. In India, mobile Internet traffic exceeds desktop traffic. Even ordinary search—Google’s great cash cow—is declining in the United States as people use their phones to search for restaurants, bus times, and weather reports.

big question chart


Large companies are responding with bold moves. Google is developing Google Glass—a computer in a pair of glasses. The components are cheap, off-the-shelf. It’s not hard to make. Google hopes this new way to use a computer tilts mobile revenue in its direction. Whether anyone will want Glass isn’t clear, but it’s worth trying. That’s because we’re still early in the mobile switchover.

How early? Mary Meeker, the venture capitalist and Internet prognosticator, leads her annual set of predictions with observations on the underlying trends. By her tally, 1.14 billion people own mobile computers, but another 5.8 billion don’t. Of those, 4.5 billion aren’t users of the Internet at all.

In one of this month’s upcoming stories, you’ll meet an entrepreneur with a feel for the opportunities that lie in those figures. His name is Suneet Singh Tuli, and his company, DataWind, is trying to sell dirt-cheap tablets in India. They come with free wireless access, supported by ads. Just as customers in the developing world skipped landlines for cell phones, Tuli thinks, they’ll skip PCs for wireless tablets and smartphones. It makes sense: in India only 11 percent of people are on the Internet, but just about everyone already has a mobile phone. “We’re talking about what will be their first computer,” he says.

That’s a reminder of what the real stakes are: the killer app isn’t Angry Birds, but access to computing itself. Wireless smartphones and tablets allow the Internet and its digital affordances to flow into every hand, everywhere, in every circumstance. We’re not in the “late majority” yet, either. We’ve got nearly six billion people to go.

9 comments. Share your thoughts »

Credit: Shout

Tagged: Business, Google, Business Impact, Apple, Microsoft, mobile, Intel, Mobile Summit 2013, mobile computing

Reprints and Permissions | Send feedback to the editor

From the Archives

Close

Introducing MIT Technology Review Insider.

Already a Magazine subscriber?

You're automatically an Insider. It's easy to activate or upgrade your account.

Activate Your Account

Become an Insider

It's the new way to subscribe. Get even more of the tech news, research, and discoveries you crave.

Sign Up

Learn More

Find out why MIT Technology Review Insider is for you and explore your options.

Show Me