The impending US tech bubble
Yesterday you have become aware of the impending Tech Bubble. I foresee a bubble similar to that of the DOT-COM bubble of a decade ago. Here's why:
- Platforms are stabilizing
- Consumer needs have been satisfied in many ways
- Technology can only be "so fast" before we stop realizing the issue
- Open Source is part of "the problem"
First let's look at the TV market. TV ownership is something like 99% of households in the US. The need from an innovation was to receive signals from around the country / globe and see what people are doing. Then came LCD screens. Now the need became energy efficiency, cost, screen size, and overall product dimensions. These needs have been (relatively) met by the market.
Most people have no need for TVs above 42" - 52" screens. While we can make them larger then that, there's no need for 60+ in the majority of households. Because of this, the market turned and said "HOW CAN WE REMAKE OURSELVES!?". Introducing 3DTV. The glasses based hell that no one asked for and no one cares about.
Whenever new tech comes out, old tech reduces in price as a product of over-supply vs. demand. There are a ton of LCD plants online overseas, yet we aren't buying like we used to. A lot of people have TVs that are "good enough" and the "improvements" aren't significant enough to get you to buy. Fast forward to yesterday with the iPhone.
WHAT!? NO IPHONE 5??? Are you kidding me!
Yes, no iPhone 5. Apple stock dropped 5% on the news. People don't want something "slightly better", they want something that is earth shatteringly different / better. A phone that's JUST faster, JUST a better camera and JUST slightly different software is no longer good enough. Consumers don't care about JUST a little better because most things are so well integrated in their lives that they have little room for improvement.
I think the bubble is coming because people will start to realize: "Hey a lot of people already have phones that are good enough for the time being" much like they've started to with TVs. Open source and platform unification further complicate matters because they make things "too easy" to do.
Think about it, you used to pay for things like a browser, DVDs, encyclopedia, operating system, etc. Now you have web-apps, streaming video, Wikipedia, and free alternative operating systems like Linux, Unix, Chromium. The "value added" proposition is now minor UI tweaks and minor integration points (Ala OSX Lion). The let down with software is happening as well as you can't sell an OS in the same way. Mac / windows upgrades cost almost nothing relative to what they were only a decade ago because all the innards are assumed / required for the market. Mac is Unix under the hood, you can't charge for it in the same way you once good in a proprietary world.
Just some more rambling but I see Google using this type of strategy right now in terms of giving away "free stuff" all over the place in an attempt to collapse (and long term, dominate) many platforms and markets.
