We are now in an era in which technologies such as computing, networks, sensors, artificial intelligence, and robotics are advancing exponentially and converging, thereby allowing industries to encroach on and disrupt one another.
The competition no longer comes from the lower end of a market; it comes from other, completely different, industries. For the taxi industry, Uber came out of nowhere. At first Uber tried competing with high-end limousines. Then it launched UberX to offer cheap taxi service. Now it wants it all. Through UberFresh, it is piloting same-day grocery delivery; through UberEats, it promises lunch in 10 minutes. Uber is challenging supermarkets, Amazon.com, and the catering industry — all at the same time. With UberHealth, it is planning to bring flu shots to people in need. When Uber finishes writing the software for its self-driving cars, it will create a genuine tsunami of disruption in every industry that depends upon transportation.
Tesla has already proven the superiority of its electric cars. Now it is changing their economics. With its Gigafactory, which is expected to come online in 2017, it will halve the cost of batteries and increase their range. These will keep getting better — and cheaper. Tesla is talking about releasing a $35,000 car in 2017. I won’t be surprised if it delivers a version in the early 2020s that travels more than 500 miles on a single charge and costs $25,000. And it plans to use the same battery technology, in Powerwall to provide affordable storage to solar homes so that they can be disconnected from the grid and be energy independent. This cross-industry focus will lead to economies of scale that will disrupt both the transportation and energy industries. Tesla is more likely to acquire General Motors, Ford, and Volkswagen than to have to battle them.
Apple, which has already disrupted the computing and music industries, now has its eye on health care and finance. The Apple watch functions as a medical device; its artificial intelligence will monitor us 24×7 and begin to take the role of our personal physicians. Apple’s ResearchKit has already started gathering clinical-trial data and will upend the pharmaceutical industry by keeping track of the effectiveness and side effects of the medications we take. ApplePay, Apple’s first entrant into the finance industry, will start doing the job of credit-card processors and will disrupt the finance industry over the next decade as it becomes a platform on which we transact commerce.
Google, Facebook, SpaceX, and Oneweb are in a race to provide Wi-Fi Internet access everywhere through drones, microsatellites, and balloons. At first, they will provide their services through the telecom companies; then they will eat their lunch. The motivation of the technology industry is, after all, to have everyone online all the time. Their business models are to monetize data rather than to charge cell, data, or access fees. They will also end up disrupting the cable industry, entertainment, and every industry that deals with information.