Changing the Rules

Last week the Times of India reported that Flipkart, India’s leading e-commerce site, would abandon its desktop website and go all-mobile. This says something about how they see their market and the users they are cultivating. India is one of the great growth stories for mobile — a country with 1.25 billion people and just over 200m mobile Internet users.

But that great untapped market is also a conundrum. Many of the people on the fringes of global mobile Internet adoption have radically different expectations and habits than the consumers we’re used to dealing with. In some cases they’re buying bandwidth literally a few kb at a time. No matter how inexpensive good devices get, many of these people don’t have the years of accumulated experience that make modern mobile operating systems decipherable.

This is a great illustration of something I’ve been talking about with my team recently. The mobile device business remains one of the most amazing growth stories of our age. But three forces are profoundly changing the shape of the industry, making this the most interesting and perilous time since it emerged in its modern form in 2007. We have to adapt to this new world to survive.

New users and markets
We developed Moto G and Moto E to help connect people who previously had to settle for compromised smartphones, or who were adopting feature phones but were in all other ways ready for the smartphone era. However, increasingly the opportunities are with people who have an entirely different set of expectations and experiences: severely constrained access to bandwidth, limited incomes, and little prior experience with computing platforms other than feature phones. This is a group that deserves to be served well, and that will truly be mobile-first. That said, the rules for serving them will be different, and giants are now fighting battles to establish those rules.

China
Pulling our products out of China was one of the most regrettable things we did during our rebuilding process. Relaunching there, earlier this year, was one of my proudest moments since taking on the leadership of Motorola. China is the world’s biggest smartphone market, and any smartphone maker must succeed there to achieve global scale.

But China is also isolated from the rest of the world in important ways. The lack of Google Mobile Services has created a unique environment and opened the door for competing platforms. International device makers that can’t make themselves relevant to Chinese consumers are dead. Meanwhile, savvy homegrown companies are taking advantage of this landscape to use China as a launch pad for their own global ambitions. We’ve heard for years about Chinese firms going global, but it’s actually happening now. This, too, is changing the rules, and it leads to the third factor.

New competitors and new models
The US used to be the market to make it in — the glittering prize. If you could succeed here, you could succeed anywhere. The US is still important, especially as a source of platform innovation. But it is mature and in some ways stodgy, and increasingly the most interesting opportunities are on the frontiers of the business. Here is where many of the emerging competitors are staking their claims, taking advantage of green fields to develop new business models. They’re going direct to consumers to sell product and build their brands. They’re pricing hardware aggressively to pull people into their own software and hardware ecosystems. They are upending historic pricing models.

Good for them! They are changing the rules.

I am confident in our ability to compete in this world, and equally confident that many of our peers will struggle as platforms and business models evolve out from underneath them. But regardless of how any of us feels about it, this world is moving. I’m not much for predictions, but I’ll make one: the winners of this new era are going to look a lot different than the winners of the last one.

No matter what, it’s going to be interesting.

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