I grew up with bands and movies, but now I live with DJs and TV series. And that is fine. I saw Argo and was totally disappointed, Silver Lining Playbook was better. And some movies still have it. But I am totally into Mad Men, Boardwalk Empire, Game of Thrones, Homeland, House of Cards, even Girls the first season. These series are up there with any great movie. In fact they are long format great movies. And then there’s long format great music, and Soundcloud is amazing for that. Yes some bands are still awesome, but great DJs are something else. DJs used to play songs, now DJs are the music experience, the composers. They make the music I like when I work, and when I work out. And they also make long format music. Hence the movies vs TV series, bands vs DJs analogy. All co exist. But lately the talent is with the latter.

When people use a laptop, they expect everything to be free, and when they use a smartphone they expect to pay. That is the main reason why the laptop eco-system is dying and smartphones are thriving.

Laptops have traditionally been expensive.  For a couple of decades now we have gotten used to paying over $1,000 for one– the average selling price of a Mac is $1,400.  Smartphones however are almost free.  While Google is beginning to have some success selling the Nexus 4, most people are reluctant to pay for a smartphone. They expect it subsidized or free. But what is remarkable is how the user behavior changes after the acquisition of the gadget.  A phone consumer expects a phone for free, but what happens afterwards they are willing to pay for in excess (e.g. texting, voice minutes, data roaming), even when free alternatives exist. It is a different frame of mind, almost like a deal, an agreement between corporations and consumers:  get something for free and pay later, vs get something that is expensive upfront and then stop paying. A laptop is a big investment upfront to enter a mostly free world.  A smartphone is a tiny investment upfront to enter an expensive, yet very much accepted world. A laptop is an all-you-can-eat experience, including an all-you-can-eat fixed internet connection.  In the laptop world piracy is rampant because people expect everything to be free, but much less so in the smartphone world.  And this is almost psychological: the same people who pirate on laptops don’t as commonly pirate on smartphones, even though for example there are many bit torrent clients for Android.  A smartphone is an “a la carte” experience in which every component is paid for and dearly, including data packages.  As a result the smartphone eco-system is well funded and thriving but the PC or laptop eco-system is dying, making the laptop experience less and less “fun”.  Since 2011 more smartphones are sold than PCs.  This is mostly because developers and content producers need to get paid, and they are seeing much more money developing or producing for iOS and Android than for Windows and Mac.

Moreover “smartphone only” experiences are on the rise.  Path, Foursquare, Uber, Instagram and Whatsapp are but some examples of these. When smartphones started, people used to say that they fell short of what was available on the Web.  Now the opposite is true.  People using laptops have to have smartphones handy as well.  And this is even more extreme with games.  As developers realized that few wanted to pay for games on laptops but many more were willing to pay for games on smartphones/tablets, they switched to develop for iOS and Android.  And games became huge on mobile.

This perception translates to the investment world.  For example Instagram is a free app and yet Facebook paid almost a billion for it.  They didn’t pay concretely because of the money they thought they would make out of Instagram itself, but because as young as it is Facebook was until recently a PC company and in Instagram it found a short cut to the mobile world. In general VCs now are much more likely to invest in a mobile platform than in a PC platform even if the mobile platform like Instagram had no way to monetize itself.  Mobile growth has the same premium Web growth had a decade ago. And this is regardless of the fact that so far, for example in advertising, it is easier to monetize on the web than on mobile. This is because everyone sees the future as mostly mobile.

For many years, when phones were phones and PCs were PCs, there was a tough debate on how content and software producers were going to get paid.  And the answer, provided by Steve Jobs, turned out to be get people hooked on a device that was a computer but one in which everyone had to pay, and call it a phone.  There was always another possible alternative, which was open source software and user generated content. That still exists, mostly promoted by Google, but even Google had to adopt the content/software world of Apple to make Android thrive.

Now before I end, here is a list of secondary reasons to explain why smartphones and tablets are killing PCs (or why iOS and Android are killing Windows and OSX):

-Smartphones expanded into tablets and they started competing in screen size with one of the few advantages left for PCs.

-People are finally getting used to glass keyboards (some apps like Swiftkey make them more friendly), and can therefore bid farewell to their keyboards.

-Laptops are more for content producers and most people are content consumers. That’s why the work environment is still dominated by PCs and probably will be for a long time.

-Smartphones are much easier to carry around and therefore open to a whole set of apps, like for example sports apps.

-Smartphones offer connectivity via WiFi and mobile and most laptops only WiFi; WiFi is common but not as pervasive as mobile and therefore a smartphone/tablet has the best of both worlds.

-One of the biggest advantages of laptops is storage, but cloud computing is taking care of that.

-The hardware that is needed to provide a great mobile experience uses energy in a smarter way than the hardware that is needed to provide a great laptop experience.

-While there are very affordable laptops now, they are not as inexpensive as great smartphones that are given out for free or almost nothing in contracts, and laptops are in a head-on race between processor speed and RAM and programs that makes inexpensive laptops appear as just bad products.

But overall I stand by my initial thought; that is, the main reason smartphones are killing PCs is because there is more money in smartphones and while information wants to be free it costs money to produce it.  At the risk of gaining many enemies with my statement, I would like to change the famous “information wants to be free” to “information wants to be affordable”. I can agree with Aaron Swartz that science that can only be afforded at expensive universities is wrong, but still the key is not to make things free, it’s to make them affordable. To make information affordable, content affordable, and software affordable.  And mobile platforms seem to have achieved a better balance at this than laptops ever did. That is why they are thriving. Better format, better business model.  That simple.

To read many more  comments on this post please see it in LinkedIn.


(Photo: fishbrain.randy@sbcglobal.net, Flickr)

Experience is great until it is used to apply old solutions to new problems. This bias, this failure to recognize new problems, is most common in technology companies as they grow older. And it is because of this bias that in Silicon Valley, the industry of the new,  old people are less frequently successful. This is why, for example, Microsoft managed by Ballmer in his 50s performs worse than Google managed by Page in his 40s, and this is why Google is now threatened by Facebook, managed by Zuckerberg in his late 20s. I am sure that when Ballmer first saw Google he thought “another search engine” and when Page and Brin first saw Facebook they thought “another social network”.  The real challenge, as we grow older is to use experience for our benefit without losing our ability to recognize the new. Without losing the ability of being experienced but occasionally feeling “inexperienced”. Because Google was certainly a new experience to those who were searching before it.  Or Facebook was a new social experience for those who were familiar with previous social networks.  But experienced leaders failed to see this. We can’t allow experience to betray us. Experience must be balanced with a childish fascination for the new, a fascination of the kind that kept Jobs young until his premature death. Steve Jobs did know how to combine experience, with an uncanny ability to recognize the new.

Have you ever seen those people who get on TV and wave hi to their mother “who is probably watching”? Well today is one of those days for me.  Except that it’s not my mother but my mother-in-law, my father-in-law and my brother-in-law. And they are not exactly watching TV, but connecting to WiFi.  In Germany I mean.  Because yes, we finally made a phenomenal alliance in Germany, similar to the ones we made in the UK with BT, or in Belgium with Belgacom, or in France with SFR, or the Netherlands with KPN. Yes, we are launching Telekom Fon! So soon my German family, and everyone in Germany for that matter, will be able to connect to Telekom Fon, just as people in the UK, for example, can connect to BT WiFi with Fon. And today I’m thrilled to announce this exceptional relationship with Telekom to the world.

Fon has partnered with the incredible Deutsche Telekom to blanket Germany with WiFi. Telekom has 12 million broadband subscribers in Germany alone that will join Fon’s WiFi network, already the largest in the world– it’s the perfect ally to bring Fon into a country I care deeply about and have much respect for. The Telekom Fon alliance will build on the 12,000 Telekom hotspots already in place and allow Telekom Fon subscribers, and everyone in the Fon network, to connect to these and more than 7.8 million hotspots around the world for free. This is a huge achievement for us at Fon and I couldn’t be happier to make the good news official.

To my German friends and family: get ready to roam…

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