Market Segmentation in Computing

Today I reserved a rental car, and I noticed something interesting. According to Enterprise, the automobile market is segmented into at least 27 different sub-markets. Wow, that's incredible. I didn't know there were that many kind of motor vehicles to choose from.

Rental Cars.png

Then I remembered this Steve Jobs quote from March 2010: "PCs are going to be like trucks. They are still going to be around… they are going to be one out of X people." And I remembered this post and picture that I read just over a year ago:

Note that this graph only looks at extensible OS platforms where 3rd party developers can easily write applications for the platform. This excludes all "dumb" platforms, including traditional cellphones and embedded devices. Dumb platform units have numbered in the billions for years.

We are witnessing a remarkably rapid segmentation of the computing market. Between the decade spanning 2007-2016, the world will have completely shed itself of the Microsoft monopoly. And even within Microsoft's domain, which used to be comprised of laptops and desktops, Windows 8 is being adopted in a variety of factors. It's still in the early days, so it's hard to know which form factors will fail and which will succeed, but there will surely be more a larger variety of form factors than ever before. Some examples: touchscreen laptops, detachable tablets, slate tablets, fold-around tablet/laptops, dual screen laptops, and more. Each of these form factors caters to the needs of different customers.

The old platforms could not adopt to the new usage models. They were simply unfit. Per Steve Jobs: "When we were an agrarian nation, all cars were trucks because that’s what you needed on the farms. Cars became more popular as cities rose." We are witnessing the same thing in computing. Smartphones and tablets are good enough for most computing most of the time. Why would you drive a truck (PC) when you could drive a car (tablet) instead?

Given my fascination with Google Glass, you might ask how Glass fits into this analogy. It kind of does, and it kind of doesn't. Glass is not good enough to replace many of the most common computing functions: email, browsing the web, reading, music, and video. Glass is inherently a passive and complimentary computing experience. It can excel where PCs, smartphones, and tablets fail, but it cannot replace any of these devices. It can only function in addition to these other devices. Glass and its competitors will grow to take their own chunk of the computing market, but they will not directly compete with modern computing form factors.

Looking forward, I expect the computing market to continue to fragment. As CPUs shrink, computers are showing up in all kinds of new places. 50 years from now, I wouldn't be surprised if there are more than 27 different segments in the computing market.