Bet everything on the App Revolution
Websites are dead. Nobody consumes content from the laptop anymore. The only people who spend time on their desktops or even their laptops are those use them to work, hobbies or research.
Since the advent of the smartphone, I’ve begged people to get in front of the App Revolution. Over and over again, really. I was so confident that the App Revolution would truly create trillions of dollars in value for the world and investors that I literally bet my career, money and time on them. I still am, aren’t I?
And since the advent of the smartphone and tablet, most people know that the PC market had faded, but have still failed to see all the ramifications of these changes. In the last five years alone, smartphones went from being geeky/rick people’s devices to the primary device that the entire developed world uses dozens or even hundreds of times a day. Think about this — there are more than a billion smartphones sold every year and there’s been more than three billion smartphones sold since the iPhone hit in 2007. As I’d explained in 2010 in an article called “How to invest today for the app bubble arriving tomorrow:”
“You know that even as the early adopters have been using apps and smartphones for the last few years, it’s just now starting to become a mainstream phenomenon. This year some 250 million people will buy a smartphone, up from 150 million last year and on its way to more than a billion people in less than a decade from now. When was the last time you heard growth statistics for a marketplace that blew your mind like that?”
And in another article called, “The burgeonging App Revolution will change your life”:
I’ll bet you that in two years, when dozens of app-related companies are coming public at wild valuations and there’s a frenzy among Fortune 500 companies to develop their app strategies and as we cross the one billion smartphone users threshold
So with a billion smartphones now being sold annually, basically every one you know has a smartphone and they carry it with them everywhere. How many times a day do you visit a website on your phone vs. pulling up an app? When most people spend time tapping, scrolling and staring at their smartphone, they’re using an app. Not a website.
If you’re working in the media, TV, finance, or just about any other service/entertainment/publication industry and your employer doesn’t have apps, I’d be worried about the future. I find I don’t like to trade from my computer using browsers any more, as the TDAmeritrade, Tradier/Scutify and other trading apps I use actually give me a better overall user experience than the corresponding trading websites do.
Are you reading this from the Marketwatch app? Do you read financial news on a smartphone or a tablet using a browser? Or are you at work, using your old fashioned PC and looking at this article in a browser.
In five more years, apps will become even more important to investors and central to all of our lives as smartwatches and other wearables will also be app-driven.
Best ways to invest in the continuing App Revolution? Apple and Google, as I’ve said from day one. Netflix, though I wouldn’t chase it right now, has truly lived up to what I predicted for it back in 2010 too:
“Netflix has already become a de facto standard for watching video in the 21st century.”
House of Cards is a great show, but Sony has a catalog of hundreds of great shows and it’s not valued like Netflix is. Netflix’s success is built upon their success as an app company. Does anybody go to Netflix.com to watch House of Cards? Maybe 1 in 20 do. In another five years, nobody will be using a browser on a PC to access Netflix shows.
Likewise, Facebook and Twitter are now fully app companies and two that I personally have invested in. I’ve used Vine the app, but I’ve never even visited the Vine website. Facebook’s long used a “mobile-first” strategy and they continue to roll out new apps like Messenger. I’ve owned Facebook since it crashed after its IPO to the low $20s and I’ve owned Twitter since last summer when it fell into the $30s. I plan to own both for many years to come as long as they stay app-centric.
But the single best way to invest in the App Revolution? Do like I did with Scutify‘s four apps for iOS and Android and invest in starting your own app company that revolutionizes the world. I notice that WSJ/Marketwatch has many apps for iOS and Android too, which makes me comfortable that I’ll still have plenty of audience here in the future too.
Finally, just as important as finding winners from the App Revolution is to run for the hills for any company that’s not fully embraced the App Revolution. Blackberry, Microsoft, Hewlett-Packard, IBM and others come to mind.
