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Changing the World Is for iPhones, Not Cars

7/17/2016

 
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​I’d written before that I could envision Steve Jobs wooing Tesla engineers with the line “Do you want to change the world or keep working on glorified horse buggies?”.  My feeling that the power of the smartphone greatly outweighs the automobile has only intensified in the months since I first wrote that. 
A couple of days ago I went running on a hot and humid Louisiana summer evening. I couldn’t believe how many young people were out walking in the neighborhoods as I passed by. They were walking alone, in groups, or riding bicycles, on golf carts, etc. But one thing they all had in common was that they all were filtering their world through their smartphone and hunting for Pokémon.
 
Normally, it’s pretty tough to get teenagers outside, let alone on a hot and humid hundred-degree day. I was stunned by the sight and I can’t stop thinking about it. Even if Pokémon GO has already peaked and flames out, I get the sense that the genie is out of the bottle. Like the world witnessing the first atomic bomb, Pokemon GO displayed its power to the world. That power is the ability to change the behavior of millions of people.
 
T-Mobile is offering free data for Pokémon players. McDonalds and other retailers are setting up lures for customers. Yelp is adding Pokémon info to their app. This power to impact behavior may have very consequential business results.
 
Then last night came the military coup in Turkey. Beleaguered President Erdogan used his iPhone to FaceTime with the press and his people. Prior to that call it looked like all hope was lost for his administration and he was going to seek refuge in France. After that call, forces loyal to him rallied and seem to have beaten back the coup.
 
Ten years ago that coup may have been successful. Without the ability to appeal directly to the people to resist the takeover and marshal his still loyal forces, it could have been a very different outcome. Now, with the advent of the smartphone, everyone has the ability to potentially broadcast live at any time.
 
It's this potential to broadcast to the world that is causing America to stagger this week. Normal people with the ability to record police actions have made their case that the law went too far. Whether you agree with them or not, you can’t deny that without the video there would be no discussion today.
 
The smartphone can impact vast groups of people all at once. A smart car is still mostly about just you. That’s the main superpower of the smartphone, it has the power to connect the masses together. It’s almost like people become components in a greater machine analogous to a Bot Net. People all over the world are scouring their neighborhoods looking for Pokémon and when the servers go down they all come to a standstill. I’ve never seen anything like it. There have been crazes before, but not a centrally coordinated one like this.   
 
It’s always going to be faster and cheaper to bring the world to you versus you to the world. You can show the whole world what is happening in Nice, France in an instant, but getting you there is going to be expensive both in terms of money and time. So in terms of learning about your world, the smartphone will always trump the automobile. This is nothing new and advances in technology have only made the cost disparity between transporting electrons versus meat bags even wider.
 
Then there’s the whole price issue. Even if Apple is working on the car of the future, it’ll never be as consequential as the iPhone or Apple Watch simply because it won’t be in as many hands. Besides the fact that the phone or watch have the capacity to change people’s behavior twenty-four hours a day, these devices are also much less expensive than a car. Very few people will have electric smart cars for a very long time. However, already today, everyone has a smart phone. Even the most expensive $950 iPhones can be attainable if purchased pre-owned a year later.
 
You generally don’t spend most of your day in your vehicle. On the other hand, you rarely spend much of your day without your phone in your pocket. If device manufacturers are fighting for time with you, then smartphone makers are going to win that battle every day. Even if someone made the most amazing, mind-blowing car, so what? It’s not like you’re going to live or work in it. But as we go through life or our work, we interact with our phones and watches all the time.
 
Even if you look decades into the future at a world where all cars are electric, connected, and self-driving, what would you have?  Sure, death rates from auto accidents would probably go down thanks to autopilot. We also might spend less time sitting in traffic jams. That would be good. But we’d still be depleting our natural resources to power all those electric plants which run on either coal or oil. It would still take a long time to drive from New York to Los Angeles, and cars would still mostly transport one or a few people at a time. The smart car’s ability to transform society seems minimal. It seems more like a needed tidying up of loose ends.  
 
And that’s a best-case scenario, assuming everyone has a smart car, all issues with auto pilot are worked out, and the government figures out all the statutory changes that need to take place.
 
I still come to the conclusion that the automobile seems so last century. The future is in virtual reality, augmented reality, drones, and software that ties all these devices together to change the way we live. Technology has proven that it can make our lives more convenient by bringing the world to where we are. This week it proved to me that it can go the next step and get us off the couch and change our behavior, not by pushing us, but by the ultimate trick.
 
By making us think it was our idea and we wanted to get up. 

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    Robert Perez

    Manufacturing and distribution analysis since 1993.

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