The rise of the robots is getting more attention every day.
Over the last year saw the first self-driving cars hit the road (and a few other cars too), Amazon’s deployment of 10,000 robot workers in its warehouses, and much more.
It looks like the robot revolution is coming and we’re only seeing the earliest taste of what they will do eventually.
However, I’ve got to tell you, the rise of the robots it will be slow. Very slow.
I remember visiting my first automated warehouse back in 1998. It was basically what Amazon has built today.
The only difference between then and now is the scale, the costs, and 18 years.
In other words, it has taken a long time. And it will take a long time. It will be gradual.
Wall Street is not a patient place though. That’s why today I want to look at a much closer innovation that’s happening now and will have equally dramatic (and potentially profitable) effects on the way the world lives.
Change You Can Believe In
Robots may be the future, but smartphones are the now and will be for the next few years.
Now, I realize that smartphones are pretty much ubiquitous here.
My friend Joe (age 37) is a real outdoorsman. Hiking every weekend. He has an old flip phone. He says it’s just fine. Says it does everything he needs. He says the only only reason he would consider getting a smartphone is so people quit asking me about why I have a flip phone.
He’s quite a minority in the United States though. A recent study found 64 percent of Americans own a smartphone. That includes 51% of adults over the age of 55.
The rest of the world is completely the opposite.
Benedict Evans at Andreessen Horowitz reminds the rest of the world has a lot of catching up to do when it comes to technology hardware -- especially smartphones.
He predicts that “catching up” growth will come in the next few years image from his presentation a couple years ago (source):
As you can see, there are a handful of trends which will affect businesses and investors in the next few years.
The biggest growth trend is in the smartphone.
The number of smartphones in use is expected to double in the next five years.
This surge will have follow-on effects for banking, mobile payments, e-commerce, education, healthcare, and a virtually unlimited number of other repercussions in the years ahead.
Best of all, the next leg of the growth in smartphones is entirely predictable.
It’s happening right now. It’s not going to take years and years to play out like robots and artificial intelligence. It’s growing each month.
That’s where the problem for investors comes into play.
Robots are sexy. They get the headlines. They both scare and excite.
Smartphones, meanwhile, are old. The iPhone has been around for a decade. But smartphones are where big money will be made too.
They are still growing in market share in the rest of the world and they are providing the technological foundation for new technologies like virtual reality and beloved service companies like Uber that they will be center of the tech universe for years to come.