Interview, Fireside Chat
a16z Podcast | What Comes After the Smartphone
- Technology is currently at the end of the smartphone wave with no new "10x" generational device immediately emerging; innovation has shifted from hardware refinement to software and service layers built on a stabilized platform.
- The PC world is described as having reached the peak of refinement just before obsolescence (analogous to the best sailing ships), whereas the mobile world has solidified its platform to allow for a "Cambrian explosion" of innovation on top of it.
- Market scale contrasts reveal a massive shift in volume: the mainframe era utilized roughly 11.1 million MIPS (equivalent to ~200 MacBooks), while the PC era saw ~17 million Commodore 64s and a 1.5 billion installed base.
- Mobile has overtaken PC in scale, with 1.5 to 2 billion smartphones sold annually and an installed base of 5 to 6 billion, compared to only 300 million PC sales per year.
- The next phase of technology growth involves the Internet of Things (IoT), which will likely consist of hundreds of connected devices per person rather than replacing smartphones, utilizing the same supply chain components as mobile phones.
- IoT devices will not form independent ecosystems but will be stitched together via the cloud, identity systems, and smartphone OSs (Android/iOS), effectively extending the mobile ecosystem rather than creating a separate one.
- The Wintel (Windows/Intel) ecosystem is projected to shrink from its historical dominance to roughly 10-15% of total unit sales, mirroring the decline of PowerPC and Mac in the early 1990s.
- A new "stack" for the future is emerging: bottom-up with ARM licenses and chip manufacturers (Qualcomm, MediaTek), followed by the two dominant operating systems (iOS and Android), and finally application layers for discovery and services.
- The Apple ecosystem currently holds 700-750 million active devices, capturing two-thirds of App Store revenue and roughly half of web traffic, creating a second major platform alongside Android.
- For startups and enterprise computing, the stability of the iOS and Android platforms reduces uncertainty, allowing innovation to focus on solving specific business processes rather than competing for hardware form factors.
- Investment and innovation are centering on the mobile ecosystem because it offers the scale necessary for chip manufacturers and software developers to absorb new ideas, leaving the x86 PC architecture "marooned" with fewer resources for future growth.