The Largest Tech Cycle of All Time: The Wearable Mobile Post-PC Suite

 

In the sections below, we bring the full power of the Cyclefund Strategic Innovation Framework and the Cyclefund Strategic Investment Framework visual analytical tools to bear on the greatest technology category cycle of our time, perhaps of all time: The rise of the wearable mobile post-PC suite of cloud-connected smart devices. Our purpose is twofold: a) to teach self-directed individual investors and independent private wealth managers how to apply Cyclefund analytical tools to game-changing companies and b) to demonstrate the value of the tools in predicting the impact of long-duration technology cycles, medium-duration category cycles, and relatively short-duration product cycles on profit cycles, the ultimate driver of stock performance and investment returns.

 

We begin our analysis by briefly reviewing how we arrived at this moment in time, a period representing the dawn of the wearable mobile post-PC suite. Our reference model for the review is the Five Cycles Model of the Cyclefund Strategic Investment Framework (source: Post-PC Portfolios page of cyclefund.com).

 

Post-PC Technology Cycle and the First Post-PC Device

 

The post-PC technology cycle began in 2001 with the very first post-PC device, the Apple iPod digital music player (source: Post-PC Q&A page of cyclefund.com). The company that created the iPod, Apple Computer Corporation, was the primary beneficiary and driver of the digital music category and product cycles that gave rise to the rapid consumer adoption of digital music players from 2001 - 2008.

 

By strategically developing and launching a sequence of highly innovative ultra-portable digital music players in 2004 (iPod mini) and 2005 (iPod nano), Apple was able to clearly establish a dominant position in the portable digital music player market (source: iPod page of inocles.com).

 

More specifically, by simultaneously employing cost-minimizing orange-path and revenue-maximizing blue-path product innovation and evolution strategies, Apple was able to offer products in the digital music player space that no competitors could match at the time (source: The Rise of the First Post-PC Device with Competitive Differentiation Highlights diagram on the iPod page of inocles.com). This unique converged-path, or collision-path, competitive strategy enabled Apple to crush all incumbent competitors, capture the lion's share of profits in the digital music player industry, and ultimately drive Apple's stock price to all-time highs (sources: Question 25 and Question 26 on the Post-PC Q&A page of cyclefund.com).

 

The key lesson that we takeaway from the success of the Apple iPod is that product innovation and evolution strategies are central to shaping the fundamental technology, category, and product cycles that drive profit cycles and ultimately stock performance and investment returns, assuming well behaved macro cycles.

 

Post-PC Technology Cycle and the First Post-PC Touch-Screen Device

 

In 2007 the post-PC technology cycle gave birth to a new post-PC product category cycle, the post-PC smartphone category cycle, with the introduction of the Apple iPhone, the industry's very first touch-screen post-PC device (source: iPhone page of inocles.com). Similar to the way in which Apple benefited and drove the prior portable digital music player category cycle, Apple was the primary beneficiary and driver of the Internet-connected smart mobile phone category and product cycles that gave rise to the rapid consumer adoption of smartphones from 2006 - 2012 in developed markets and 2011 on in developing markets (source: Strategic Games Model of Intergame Competition for Mobile Devices in Developed and Developing Countries diagram on the Post-PC Waves page of cyclefund.com).

 

By strategically developing and launching a sequence of highly innovative and game-changing ultra-thin smartphones in 2010 (iPhone 4) and 2011 (iPhone 4S), Apple was able to clearly establish a dominant position in the Internet-connected smartphone market (source: iPhone page of inocles.com).

 

Specifically, by relentlessly employing profit-maximizing blue-path product innovation & evolution strategies, Apple was able to offer products in the cloud-connected smartphone space that no competitors could match at that time (source: The Rise of the First Post-PC Touch Device with Competitive Differentiation Highlights diagram on the iPhone page of inocles.com). This unique blue-path competitive strategy enabled Apple to decimate all incumbent competitors, capture the lion's share of profits in the smartphone industry, and ultimately drive Apple's stock price to all time highs (sources: Apple iPhone Multidimensional Strategic Product Roadmap from 2008 - 2012 with iPhone Unit Shipments and Apple Equity Performance diagram and Apple iPhone Blue-Path Evolution Strategy diagram on the iPhone page of inocles.com).

 

The key lesson that we takeaway from the success of the Apple iPhone is the continued confirmation that product innovation & evolution strategies are central to shaping the fundamental cycles that ultimately drive stock performance and investment returns.

 

Post-PC Technology Cycle and the First Post-PC Mobile Suite

 

Having competed our brief review of the post-PC music player category cycle and the post-PC smartphone cycle, we are now well equipped to understand and thoroughly analyze what we strongly believe to potentially be one of the greatest technology category cycles in the history of humankind, the post-PC wearable mobile suite cycle. In the next several sections, we will answer the following six fundamental questions related to understanding strategic innovation and making strategic investments in this virtually unbounded and rapidly accelerating new space:

 

  1. What is a wearable mobile post-PC suite?
  2. What are the core device competencies of a wearable mobile post-PC suite?
  3. Which firms are taking leading roles in shaping this game-changing product category?
  4. What are the geotemporal characteristics of the largest technology cycle of our time?
  5. How can we use the Strategic Innovation Framework to predict the firms' product roadmaps?
  6. What are the competitive dimensions that will determine winners & losers in this new space?
  7. How can we use the Strategic Investment Framework to predict the firms' stock trajectories?

 

In order to answer the first two questions and help explain and understand the concept of a wearable mobile post-PC suite and its associated smart device competencies, we reference the Multidimensional Strategic Positioning Framework for the Post-PC Era (source: iGlass page of inocles.com), as well as the Wearable & Non-Wearable Multiscreen Smart Device Competency Framework for the PostPC+ World (source: Vision page of postpcplus.com).

 

Specifically, we rearrange and reorganize these two frameworks into two entirely new derivative diagrams specifically tailored to illustrate the concept and competencies of a wearable mobile post-PC suite.

 

Definition of a Wearable Mobile Post-PC Suite

 

A wearable mobile post-PC suite is an integrated collection of independent Internet-connected post-PC wearable devices, such as smart watches, glasses, and bands, and post-PC mobile devices, such as smart media players, phones, and tablets, collectively designed and individually optimized to provide a unified and seamless multiscreen cloud experience for consumer, business, government, and education users across the globe.

 

In addition to the written definition above, we provide a visual definition below in order to further illustrate this key concept. Specifically, the diagram below depicts the core dimensions and internal structure of a framework for visually understanding and strategically positioning cloud-connected wearable mobile post-PC suites.

We refer to this diagram as the Visual Definition of a Wearable Mobile Post-PC Suite of Cloud-Connected Smart Devices. (The diagram also represents a slice of a broader visual framework which we refer to as the Wearable Mobile & Non-Mobile Smart Device Strategic Positioning Framework for the Multiscreen Cloud-Connect Post-PC Era.) The diagram is organized along two core dimensions. The first is the wearable mobile dimension, and the second is the post-PC dimension. In accordance with the dimensional arrangement of the diagram, a wearable mobile post-PC suite is positioned in the upper left-hand quadrant.

 

Furthermore, within the upper-left quadrant, the visual definition diagram is structured into three strategic rows, with each row containing a specific type of wearable mobile post-PC suite. The first row contains a suite of smart devices designed to penetrate and meet the needs of mass market consumers and businesses seeking relatively lower cost products. The second row contains a suite of smart devices specifically designed to penetrate and target the needs of mass market consumers and businesses seeking premium products. The third row contains a suite of smart devices specifically optimized to penetrate and meet the needs of luxury market consumers and businesses seeking premium plus products.

 

We refer to the individual suites contained in the first, second, and third rows of the definition diagram as the affordable, aspirational, and luxury wearable mobile suites, respectively, where each individual suite is highly optimized to meet the specific needs of its associated target market population.

 

Within each row, the diagram is further structured into four columns, with each column representing a particular type of cloud-connected smart device. The first column represents smart watches, the second column represents smart media players, the third column represents smartphones, and the fourth and last column represents smart tablets. Each column shows representative product examples from Apple, including products from the Apple Watch, iPod, iPhone, and iPad product lines; however, one could easily substitute equivalent product lines from Samsung, Google, Microsoft, Nokia, Amazon, Lenovo, or Xiaomi.

 

Example: Samsung Mobile Suite 2014 vs. Apple Mobile Suite 2014

 

The post-PC wearable mobile suite framework presented above is a valuable visual tool for organizing and analyzing the strategic positioning strategies of two or more competitors providing post-PC suites of cloud-connected wearable mobile devices to consumer and business users worldwide.

 

For example, consider the ongoing intense global competition between technology powerhouses Samsung and Apple. As of this writing in late 2014, these two leading post-PC vendors are actively designing, developing, and strategically positioning seamlessly integrated collections of highly innovative wearable and mobile products in order to capitalize on, what we believe to be, the largest technology category cycle of all time, the wearable mobile post-PC cycle.

 

Moreover, given the winner-take-all nature of rapidly accelerating mobile technology cycles propelled by powerful installed-base network effects, Apple and Samsung, as well as its strategic mobile operating system partner Google, are keenly aware that 2015 represents a pivotal year in the battle for dominance of the newly emerging wearable mobile post-PC space. Since many of the products launched or announced in late 2014 (or early 2015) are likely to comprise the bulk of any relative competitive advantage of one post-PC smart device vendor relative to another throughout most of 2015, let us now apply our newly minted definition of a wearable mobile suite to Samsung and Apple and assess their relative positions as they both strategically prepare for the greatest of all tech cycles in 2015 and beyond.

 

Samsung Smart Wearable Mobile Post-PC Suite 2014

 

Using the wearable mobile post-PC suite framework presented and discussed above, and extending its column structure to include the full range of wearable and mobile post-PC devices, we can now readily organize and clearly define the 2014 Samsung Wearable Mobile Suite as follows:

 

  1. Smart Band: Samsung Gear Fit
  2. Smart Watches: Samsung Gear 2 Neo, Gear 2
  3. Smart Glasses: Not Available
  4. Smart Players: Not Available
  5. Smart Camera: Samsung Galaxy Camera
  6. Smart Phones: Samsung Galaxy S3, Galaxy S4, and Galaxy S5
  7. Smart Phablets: Samsung Galaxy Note 3, Note 4, Galaxy Note Edge
  8. Smart Tablets: Samsung Galaxy Tab S 8.4, 10.5, Tab Pro 8.4, 10.1, Note 10.1
  9. Smart Pro Tablets: Samsung Galaxy Tab Pro 12.2, Note Pro 12.2

 

Moreover, by using the pre-defined row structure of the suite framework, we can now for the first time readily identify the three different types of Samsung smart wearable mobile suites:

 

  1. Affordable Mobile Suite: Gear Fit; S3, S4; Tab
  2. Aspirational Mobile Suite: Gear 2 Neo; Camera; S5, Note 3; Tab S, Tab Pro, Note
  3. Luxury Mobile Suite: Gear 2; Note 4, Note Edge; Tab Pro 12.2, Note Pro 12.2

 

Note, semicolons separate the distinct classes of smart devices within each type of smart wearable mobile post-PC suite.

 

Apple Smart Wearable Mobile Post-PC Suite 2014

 

As we did for the Samsung suite, we can apply the extended version of the wearable mobile post-PC suite framework to organize and define the 2014 Apple Wearable Mobile Suite as follows:

 

  1. Smart Band: Not Available
  2. Smart Watches: Apple Watch, Watch Sport, Watch Edition
  3. Smart Glasses: Not Available
  4. Smart Players: Apple iPod shuffle, iPod nano, iPod touch
  5. Smart Camera: Not Available
  6. Smart Phones: Apple iPhone 5c, iPhone 5s, iPhone 6
  7. Smart Phablets: Apple iPhone 6 Plus
  8. Smart Tablets: Apple iPad mini, iPad mini Retina, iPad Retina, iPad Air
  9. Smart Pro Tablets: Not Available

 

Again by employing the row structure of the suite definition framework, we can now for the first time readily identify the three different types of Apple smart wearable mobile suites:

 

  1. Affordable Mobile Suite: iPod shuffle, nano, touch; iPhone 5c, 5s; iPad mini
  2. Aspirational Mobile Suite: Watch Sport; iPhone 6; iPad mini Retina, iPad Retina
  3. Luxury Mobile Suite: Apple Watch, Watch Edition; iPhone 6 Plus; iPad Air

 

Comparing the two competing smart mobile suites, we see that the Apple mobile suite is missing a smart band and a smart camera to compete with the Gear Fit and Galaxy Camera within the Samsung mobile suite. The Samsung mobile suite lacks a set of smart media players and a high-end smart watch to compete with the iPods and Watch Edition within the Apple mobile suite. The Apple mobile suite lacks a curved-edge phablet and a pro tablet to compete with the Galaxy Note Edge, Galaxy Tab Pro 12.2, and Galaxy Note Pro 12.2 within the Samsung mobile suite.

 

Lastly, both the Apple and Samsung mobile suites are missing Internet-connected smart glasses, such Google Glass, which are beginning to show highly promising wearable applications that leverage the synergistic competencies of smart devices working together intimately with the cloud to solve heretofore intractable everyday problems.

 

Core Device Competencies of a Wearable Mobile Post-PC Suite

 

During the PC era, the era prior to today's modern post-PC era, the traditional PC model historically focused on a device-convergence strategy; that is, to provide consumer and business users with one general-purpose go-to device designed to meet their personal and professional needs. In contrast, the modern post-PC model flips this traditional model upside down. It does not focus on device convergence, but rather device divergence.

 

Specifically, the modern post-PC model increasingly prevalent in today's multiscreen world is based on a multi-device, competency-centric approach. It provides consumer and business users with a set of independent, highly-optimized go-to devices collectively designed to meet user needs in different contexts throughout the day, whether it be at home, at work, on the go, at play, reading, watching, or at rest. The beauty of this modern competency-centric approach is that it allows designers to highly optimize their products for specific user activities or use cases, and it enables users to select exactly the right device at the right time in the right context. (source: Multidimensional User Activity Engagement Framework for the Post-PC Era on the iPhone page of inocles.com)

 

To illustrate the importance of the modern multiscreen, competency-centric approach, we provide a visual definition of the core smart device competencies of a wearable mobile post-PC suite, as shown in the diagram below.

We refer to this diagram as the Wearable and Mobile Device Competencies within the Post-PC Suite Framework of Cloud-Connected Smart Devices. Like its companion, the visual definition diagram discussed previously, this competency diagram is also organized along two core dimensions, the wearable mobile dimension and the post-PC dimension.

 

Within the upper-left quadrant, the diagram is structured into four strategic columns, with each column representing the core device competencies of a particular class of cloud-connected smart device. The first, second, third, and fourth columns represents the core device competencies of smart watches, media players, phones, and tablets, respectively. The core device competencies of smart watches are the sense and glance competencies. The core device competencies of smart media players are the play and snap competencies. The core device competency of the smartphones is the communication competency. The core device competencies of smart tablets are the read and view competencies. For an introduction to the concept of device competencies see the Core Competencies of Post-PC Devices and PC Devices section on the iGlass page of inocles.com.

 

Key Role of the Cloud in Driving Rapid Adoption of Post-PC Suites

 

One remaining critical aspect of the definition of a wearable mobile post-PC suite and its associated core device competencies is the central role played by the cloud. The cloud is critically important to the successful and rapid user adoption of wearable mobile post-PC suites because the fundamental model upon which it is based, device divergence rather than device convergence, is simply not feasible without the cloud. Smart devices must be inherently cloud-connected to provide users with a unified, seamless, and worry-free experience. Without the cloud to automatically synchronize, stream, backup, and store user data, media content, documents, and apps, users would become so overwhelmed by tedious data management tasks that they would long for the traditional converged-device PC model of a bygone era (source: Apple iCloud: A Post-PC Cloud Service Automating Cross-Device Synchronization section on the iPhone page of inocles.com).

 

In accordance with its key role, the cloud is symbolically located at the intersection of the two core dimensions, the wearable mobile dimension and the post-PC dimension, in both the wearable mobile post-PC suite definition and core device competency diagrams previously presented. Moreover, as depicted in the later diagram, the core device competencies of the cloud are the sync and stream competencies.

 

X-Wave Characteristics for Smart Mobile Devices in Developing Counties

 

Up to this point, we have defined the concept of a wearable mobile post-PC suite of cloud-connected smart devices, defined the set of interrelated core competencies associated with such a suite, and identified the leading firms driving and shaping this new and potentially game-changing product category.

 

Now, if we assume that we on the cusp of witnessing a global-scale collision between two of the greatest cycles of all time, a) the post-PC technology cycle and b) the wearable mobile suite category cycle, we can employ the Cyclefund Strategic Investment Framework to analyze the resulting geotemporal tipping point patterns that are expected to occur within a relatively short window in time.

We call the diagram above the Strategic Games Model X-Wave Diagram for Smart Mobile Devices in Developing Countries from 2005 - 2018. It represents a geotemporal characterization of the actual and estimated global installed bases of smart mobile devices and feature phones in developing countries over time from 2005 through 2018.

More specifically, the X-wave diagram represents the strategic intergame competition between smart mobile devices (new game)
and feature phones (old game) from 2005 to 2018 within developing countries and highlights two distinct and important tipping point patterns. The first tipping point pattern, highlighted by the small purple sphere in the diagram, occurs in 2012 and represents the saturation point of feature phones in developing countries. The second tipping point pattern, highlighted by the larger yellow sphere, is projected to occur between 2016 and 2018 and represents the accelerated mass-market crossover point from feature phones to smart mobile devices in developing countries. Taken together, these two tipping points form an X-pattern within the X-wave diagram, as visually illustrated by the red and green waves crossing from above and below respectively to form a highly distinct X-pattern centered on 2017, the most competitively critical year in the post-PC era.

 

The Central Role of Intelligent Eyewear in the Internet of Things

 

Over the past decade, we have shifted from an enterprise-driven PC-centric world of desktops, laptops, and workstations to a consumer-driven post-PC-centric world of smartphones, tablets, and smart HD televisions and UHD TVs. In the near future, we shall shift once again to a new postPC+ world that combines the richness, mobility, and fidelity of the PC and post-PC worlds with the intimacy of cloud-connected wearable devices and the omnipresence of Internet-connected things. (source: Vision page of postpcplus.com)

 

Common Everyday Devices Connected to the Internet of Things

 

In this new postPC+ world, our homes, schools, businesses, factories, towns, cities, states, governments, and nations will be collectively filled with a virtually limitless number of common everyday devices that will be connected directly to the Internet. Current and prospective examples of Internet-connected devices include:

 

Consumer Things

  1. alarm clock
  2. baby monitor
  3. bicycle
  4. car
  5. coffee pot
  6. computer
  7. door lock
  8. dryer
  9. flower pot
  10. garage door opener
  11. glasses
  12. lightbulb
  13. motorcycle
  14. oven
  15. phone
  16. pool filter
  17. range
  18. refrigerator
  19. ring
  20. security camera
  21. shirt
  22. shoes
  23. smoke alarm
  24. sprinkler system
  25. stereo system
  26. tablet
  27. television set
  28. temperature sensor
  29. thermostat
  30. trash can
  31. vacuum cleaner
  32. washer
  33. watch
  34. window shade
  35. wrist band


Business Things

  1. air quality sensor
  2. airplane
  3. airport kiosk
  4. assembly robot
  5. bank kiosk
  6. cash register
  7. conveyor belt
  8. delivery drones
  9. electric meter
  10. fire hazard sensor
  11. fulfillment robot
  12. gas meter
  13. health monitor
  14. hotel kiosk
  15. industrial sensor
  16. inventory monitor
  17. manufacturing robot
  18. rain meter
  19. restaurant kiosk
  20. robotic assistant
  21. security gate
  22. traffic light
  23. train
  24. truck
  25. water meter

 

Each connected device in the list above, whether it is a PC device, post-PC device, consumer thing, business thing, or personal wearable, will supply data to and receiving data from the cloud. The potential number of connected devices is truly staggering. In the limit, one could see the potential number of cloud-connected PCs, smartphones, tablets, TVs, things, and wearables approaching 1 trillion devices over time.

 

Monitoring and Communicating with the Internet of Things

 

Given this imponderably vast number, the central question now becomes: How can any one person (or any one business) possibly monitor and communicate with all of their cloud-connected devices? We strongly believe that the answer to this fundamental question can be simply stated as follows:

 

In order to monitor and communicate with an increasingly large number of cloud-connected devices, an individual (or group of individuals representing a business) will need the assistance of an entirely new class of post-PC wearable devices, whose core competency is knowing things about things.

 

How would such an all-knowing wearable mobile device work in the context of a typical day-in-the-life of an everyday user?

 

Envision if you will a magical new device that presents its user with a giant virtual wheel of screens, where each screen in the wheel is tied directly to one of the numerous things in the user’s suite of things. Suppose a user of such a device desires to check the status of a particular thing in their suite of everyday things, such as a baby cam his or her son John’s bedroom. To do so using the new device, the user employs a simple voice command and vocalizes the phrase “baby camera John’s room” and instantly the giant virtual wheel of screens spins directly to the specific screen associated with John’s baby cam. With that screen now in focus, the user can easily direct the baby camera to zoom in or rotate left or right using simple voice commands or touch gestures.

 

As the user progresses throughout his or her day, starting from time at home in the morning, to time commuting into work, time at work, time with clients, time after work for coffee, time on the way to the gym or store, time traveling home, time at home with the kids, private time with spouse, family time, reading time, and bedtime, there inevitably will be a significant and potentially very large number of points during the day or night where the user will feel the need or be compelled (via alerts) to check the status or issue verbal or gestural commands to one or more things in his or her suite of things.

In most cases, pulling out a smartphone or reaching for a tablet will be impracticable due to time, location, hands-full, or heads-up constraints. Therefore, in order to maximize the use of their limited time, we believe that most users should plan to leverage a wearable mobile solution that enables them to rapidly monitor, communicate with, and ultimately control any of their cloud-connected things without looking down, encumbering their hands, or fishing around in their purse or pocket for a phone.

 

Fortunately, for these busy consumers and business professionals there is, or soon will be, a new, compelling, and viable class of wearable mobile and wearable non-mobile solutions for managing a large and rapidly growing suite of Internet-connected things:

 

Cloud-connected intelligent eyewear, including Internet glasses, such as Google Glass, holographic lenses, such as Microsoft HoloLens, and virtual reality headsets, such as Facebook Oculus Rift.

 

In short, we strongly believe that managing suites of Internet-connected things, or IoT suites, will be virtually impossible without the efficient and intimate assistance provided by next-generation intelligent eyewear and embedded voice-controlled smart personal digital assistants.