A Cell Phone Milestone
In an earlier post, I wrote that the cell phone was a transformative technology. The cell phone, the personal computer, and the Internet are the three most transformative technologies of the last twenty years, as they have altered the fundamental concepts of time and space as it relates to human communication.
The interesting current phenomenon is that the growth rates of cell phone usage in developing countries is now rivaling the growth rates experienced in developed countries during the 1990s. As I mentioned in the earlier post there are 6 million new subscribers a month in India and 5.25 million a month in China. Of course in the case of these two countries that does not just mean people moving from land lines to cell phones. It also means people having phones for the first time.
It was announced the other day that 1 billion cell phones were sold in 2006, the first time that has ever happened. Nokia lead the pack with 300 million sold, and also achieved a quarterly milestone of 100 million sold in the last quarter of the year. Given that there are 6 billion people in the world and a large number of them are either children under 10 or live in extreme poverty these numbers are amazing. One of the reasons of course is that cell phones have become a commodity.
When Motorola began selling the first cell phone in the U.S, the DynaTac, often referred to as the brick, it cost $4,000, which at that time was about 10% of the average annual family income. Now of course Motorola sells their iconic Razr phone for less than $100, and if you donâ€™t really care about style on your phone, you can actually get free phones with a 2-year service agreement. In the developing world, the majority of phones are sold for less than $50.
This brings up an interesting point about transformative technologies. When first introduced, and through the first few product cycles, they transform society because of their inherent qualities. Cell phones allowed us to make calls regardless of where we were, no longer tied to some line or cord attached to a wall. Computers allowed us to transform how we work and how productive we could be. The Internet has become the greatest agent of disintermediation in the history of humanity. That is the first wave of transformation.
The second wave of transformation occurs when the price drops so low that market penetration dramatically goes up. Then the inherent qualities of these technologies get amplified by an exponential increase in people using them. A million people using cell phones in the U.S. does not transform communications except for those million people. Two hundred and twenty million cell phone accounts however, transforms communications in the country. The same holds true. for computers. The average price of a computer now is now a fraction of what it was twenty, or even ten years ago. Now everybody has one. Finally, now that the cost of high speed Internet connections has dropped, the percentage of households that have this broadband access has crossed 50%. It is not just coincidence that the YouTube phenomenon happened at this time.
We are fast approaching the time when the majority of people living on earth will have cell phones. In what has been referred to as â€œthe Golden Triangleâ€ â€” North America, Western Europe, Japan and Korea – 76% of all people have cell phones. Outside this area, the penetration for the rest of the world is 27%, and that is where the numerical growth is the greatest. We are getting so used to our cell phones that we lose sight of what is actually going on. In just a few years, more that 50% of all humans on earth will be able to call each other regardless of where they are. That is a connectedness unimagined decades ago.
This connectedness is part of the vision I see unfolding during the next twenty to thirty years. It is part of the coming Evolution Shift that might well transform humanity. That is why both the book I am writing, and this blog have that name. We might well be approaching one of the most historically seismic times in our relatively short time on this planet. And that communications device of convenience you hold in your hand, the cell phone, will be a part of this coming change.