SUBSCRIBE: The future of online services

Some say that advertising keeps the internet lights on. Advertising is a great business model for services but it has limits. There are only so many ad budgets to go around.  What will fuel an internet that outgrows all the ad money in the world?

This is the topic that Ben Bajarin and I will explore in our next event: SUBSCRIBE: The Future of Online Services. 

We will explore:

  • How will the online services business models evolve?
  • How will VR affect entertainment and communications?
  • How will AI affect shopping?
  • How will blockchain affect economics?
  • How will hardware affect software and services and vice versa?
  • How will  users, usage, and capital connect?

Join us to learn more about the internet economy by studying the economics of the internet.

SUBSCRIBE is a 1/2-day event taking place on both coasts. Register at:

The first 20 registrants receive an early-bird discount.

Learn more about SUBSCRIBE at

Asymcar #28 Meaningful

We await the Lamborghini SUV.

Source: Asymcar #28

The Critical Path #166: Glance

Horace and special guest Ben Bajarin of Creative Strategies discuss the Glance conference. They investigate the job of the Watch and touch on the changing responsibilities amongst the upper ranks at Apple.

Source: The Critical Path #166

The Critical Path #165: Audio Port

Horace and Anders discuss the iPhone analog audio port, the lightning port’s use by Apple Pencil and Apple’s viewpoint on privacy and the environment. Horace rounds the episode out with a definition of disruption.

Source: 5by5 | The Critical Path #165: Audio Port

Significant Contribution

In my quoting of the “Cook Doctrine” I cited the primary criteria for Apple to enter a new market:

We believe that we need to own and control the primary technologies behind the products we make, and participate only in markets where we can make a significant contribution.

These criteria, often repeated, were certainly in force when Apple chose to enter the watch market. Apple has sought and achieved a significant market share and did so while owning and controlling the primary technologies behind the product.

I now turn to the significant contribution criterion to study the possibility of Apple’s entry into the car industry.[1]

The significance test shifts the speculation from whether Apple would build a car, to how many cars is could build. Making a few cars is easy (see first commandment of The Entrant’s Guide to the Automotive Industry). Making lots of cars is hard and hence significance in the automotive market (as in watches and phones) means achieving some degree of adoption, a higher degree of usage and a very high degree of profitability.

So what does being significant in the car business mean? Does it mean becoming the next Tesla? The next BYD or the next VW? How quickly?

Fortunately, we have something to compare an Apple entry to. Apple has made a “significant” market entry in phones and others have made entries in cars. If we contrast the rate of growth of Tesla, EVs, and Hybrids[2] to the rate of growth of iPhones in their respective US markets, we obtain a test of significance:

Screen Shot 2016-01-04 at 12.38.39 PM

The graph shows the percent of sales for the alternative car technologies (and Tesla) vs. the percent of US phone users using iPhones (comScore). Here are the conclusions:

  1. Control of the primary technologies behind the product is a topic for another post. []
  2. Of which Toyota has 70% to 80% share []

Asymcar #27


We consider the landscape that Apple’s purported Titan project will address in a few years time.

Horace discusses the pattern of disruption powered by Moore’s law. We turn to the transportation sector and consider the “reimagining” of the car. We further consider scenarios, from sustaining where the current players grow, to new entrant opportunities.

The conversation diverts a bit into the regulatory and taxation regime, specifically US road funding is largely tied to fuel taxes. We note the odd situation where an entry level car driver pays fuel taxes while a luxury Tesla driver does not.

We speculate on Apple’s possible “meaningful contribution” to transportation and the required product, customer experience, sales channel, price and financing options.

Source: Asymcar #27

The Critical Path #164: Rocky II

Horace and Anders discuss viewing Apple’s business as a recurring revenue model, then touch on the iPad Pro somewhat unsuccessfully and host a very special guest.

The Critical Path #164

See also:

Rocky II video
Full episode of the show with video where available. Main segment begins at 39:39

Source: The Critical Path #164

My Favorite Apple Watch Myths 

Apple Watch was released April 10th 2015. Eight months later we are holding the first Apple Watch conference. To kick off the discussion, here are my favorite myths about this new product:

Source: My Favorite Apple Watch Myths | Horace Dediu | LinkedIn

Apple Watch Keeps Top Gift Spot Ahead Of Black Friday

The Apple Watch continues to hold the top spot among products that will be hot this holiday season, as predicted by the IBM Trend app.

Source: Apple Watch Keeps Top Gift Spot Ahead Of Black Friday

The Apple Watch scored 100 out of 100 on the “IBM Watson Trend Scale”. According to various surveys, about 100 million people will shop this Thanksgiving weekend in the US. One wonders how many purchases by 100 million shoppers merit a score of 100/100.

My estimate for units shipped has been 20 million in the first calendar year. About 7 million have been sold in the first two quarters. That leaves 13 for the holiday and Q1 (which includes Chinese New Year.) I still like these odds.

To learn more about the reasoning around this estimate and hear additional supporting data, join us at Glance conference.

The Critical Path #163: You Say You Want a Revolution

Horace discusses politics and disruption with Michael Tofias. Is disruption of government possible? Michael pursues the study of American political institutions, elections, Congress, and computational political economy to reveal how disruption might play out within governments.

Source: 5by5 | The Critical Path #163: You Say You Want a Revolution