The members of the research team here at Esoterica Capital are mostly in their early 30s, grew up around all different kinds of gadgets, and are fairly tech-savvy compared to the general public. However, when we recently tried to set up a collaborating working infrastructure for the team, what we initially thought would be half hour job turned into a 2-day job with multiple calls for tech support. This frustrating experience made us thinking: why did technology advancement make our life more complicated instead of easier sometimes? And how will the proliferation of 5G change all this?
One of the issues we see in the current technology environment is the fragmentation and the friction of different operating ecosystems.
The 5 largest companies by market cap in the world are technology companies, and 3 of them have their own operating systems including Google, Apple, and Microsoft. If you have all your devices under the same umbrella, life is usually good and simple with seamless integration between different devices. However, most of us have devices from more than one of these tech companies or at least have close family members using devices running an operating system from a different company, and that creates a painful problem when you connect different devices.
Part of the reason for this fragmentation is by choice, as the companies try to build a "walled garden" around their own offering and make it harder for current users to switch to other platforms. We don’t necessarily disagree with the choice to increase switching cost but we can't help but think this is creating a lot of unnecessary complications and confusion for many consumers.
In fact, we recently came across this company specializing in providing tech support to the general public, a service you would think should be provided by the tech companies mentioned above at no additional cost. Their services include some of the most basic tasks including transfer contacts and pictures between different devices, and how to make the most out of the current devices. The staggering fact is that the company has 300 million paid users (including one-time users and subscribers). To put things into perspective, Netflix has 150 million subscribers and Twitter has 330 million monthly active users. We understand these are not directly comparable but you get the point.
With the proliferation of 5G, the number of connected devices is expected to explode from 23B in 2018 to 75B in 2025, and the number of connections between different devices will grow exponentially with it. This creates more potential "pain points" but also a huge opportunity as we see it. Can someone create a single platform that connected devices from different companies all agree to work on? If not, can someone create a key technology/service that is critical enough that devices from different platforms have to adopt, and eventually becomes the "choke point" of the 5G ecosystem? We don’t have a good answer for now but we will keep looking for it. If you have any ideas or thoughts, please do let us know.
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