In an era where everyone carries a smartphone with a video camera it makes you wonder why politicians and pundits say the crazy things they say. Someone is recording every word on Fox News so it can be played back and laughed at on The Daily Show.
Here’s a crazy one I’ll bet you did not see coming. Hardware will be free. Soon. So said Microsoft co-founder Bill Gates just about a month shy of 10 years ago.
Ten years out, in terms of actual hardware costs you can almost think of hardware as being free – I’m not saying it will be absolutely free – but in terms of the power of the servers, the power of the network will not be a limiting factor
Obviously, Gates’ predictions of the future are to be taken with a large grain of salt, all the more so based upon his abysmal record. He’s a soothsayer that the tech industry pundits listen to but give me a list of where his prognostications of the future have been accurate.
Even more obviously, free hardware isn’t in our tech gadget future, but the value of what we get for what we spend continues to grow.
The electronics industry’s answer so far has been to add functions to existing devices – the merging of cameras and cellphones is a good example – or create new markets, while ensuring that the profit margins maintain future growth. Intel and Nokia can produce $10 chips and $30 cellphones, but can’t sell enough to justify current investment levels; which is why they prefer to sell $300 chips and $200 cellphones.
Hmmm. Doesn’t that sound much like Apple’s strategy of owning the premium end of a market segment and let everyone else fight it out to the death on the low end.
As a brief aside, note that Nokia is no longer the Nokia of 10 years ago, and Intel has almost no presence in the rapidly growing mobile segment made up of smartphones and tablets.
What’s happened to the personal computer industry in the post-PC era of mobile devices is more than interesting. Except for Apple, average selling prices of PCs and mobile devices has gone down so low that few manufacturers make any money.
One report indicated that last year Apple took just under 90-percent of all the profits in the smartphone segment. Free hardware might still be part of the future of mobile devices (note that Google and Amazon sell hardware at nearly the cost of manufacture in the hopes of gaining revenue on the backside with media sales, and advertising, respectively) but how long can manufacturers lose money in a vain attempt to make Bill Gates’ predictions come true?