In each of the past three decades, a different electronic equipment category has reigned as the killer application. Interestingly, each new application appears at one-tenth the cost and an order of magnitude higher volume. Letting vanity get the better of me, I'll call this phenomenon Donovan's Law.
In the 1970s, mainframe computers took the world by storm. For those crazy about historical accuracy, yes, the two hottest mainframe products were actually introduced in the 1960s. IBM Corp. introduced the System 360 in 1964 at a cost of about $90,000 for a low-end system. Digital Equipment Corp.'s PDP-8 appeared in 1965 for about $18,000. So, systems cost tens of thousands of dollars.
But what about unit volumes shipped? Reliable information on mainframe shipments in the 1970s is not easy to come by, but assume unit volumes were in the single-digit millions. So much for IBM chairman Thomas Watson's 1943 statement, "I think there is a world market for maybe five computers."
Fast forward to the 1980s, the age of the PC. IBM announced its new personal computer in August 1981. Selling for $3,000, it came with 64k of RAM, one floppy drive and a screaming 4.77-MHz Intel 8088 microprocessor. By 1985, the PC market had hit 14 million units. One can imagine IBM was more than pleased to have proved Watson so wrong.
Next, the 1990s brought mass adoption of the cellular phone. With a cost in the hundreds of dollars (compared with thousand of dollars for PCs the decade before), cellular phones had reached unit volumes of 171 million by 1998.
If the trend continues, this decade should reveal a new category of electronics that ships in unit volumes of a billion units at a cost in the tens of dollars. Things get a bit tricky here, since there are only 6 billion or so people in the world. This means either that some of the population will own many of this mythical piece of equipment or that nearly every man, woman and child on the planet will own one. Memory cards and smart cards seem to fit that bill pretty well.
In a decade or so, killer apps will cost a couple of dollars at most and sell in volumes in the tens of billions. Though one cannot predict what that piece of electronic equipment will be, one can begin to think of the characteristics. Each human being will have one or two. That means this device will probably be wearable or implantable as well as disposable.
As always, I challenge readers to consider the trend and submit your own ideas.
Jeremey Donovan is Chief Analyst at Gartner Dataquest. Contact him at jeremey.donovan@gartner.com.
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