The 2 Billion User Sweet Spot

Apple, Alphabet (nee Google), and Amazon all reported their financials as the reporting season reaches its peak. Frankly, you can pore over the endless chatter about the results, but this paragraph is about all you need to know about the gist of the analysis:

Challenging! That’s the euphemism of the moment, used by way too many tech CEOs (including Tim Cook and Sundar Pichai tonight and Mark Zuckerberg and Evan Spiegel in recent days) to describe either 2022 or the current moment or both. Translated from corporate-speak into conversational English, it means business is bad. Just how bad became clear from the December-quarter results reported Thursday by Apple, Amazon and Alphabet. Strikingly, for each company, its core business—selling iPhones, online shopping and advertising, respectively—shrank.

The Information

This could be a wake up call for tech companies that have pretty much floated across macro-economic turbulences for years and years, impervious to downturns, pandemics, war, famine, pestilence, and general end times events. Big tech has a boo boo, and that’s about all it is. There is plenty of cash, employment and hires are up over previous years even taking into consideration the large rounds of layoffs, and they have piles and piles of stored up cash reserves. They just don’t like the fact that growth isn’t handed to them on a silver platter.

But let’s look at a magical number that will put everything into perspective: 2 billion. That’s the number of active devices that Apple is claiming around the world. That is, coincidentally, the number of active users that Meta claimed for Facebook the day before. That is a staggering number and less laudable, more frightening.

Source: Meta

The threshold for the big tech companies is so high that they create their own macro-economic turbulence. We see the problems and challenges they experience as being the same as ours. On one level, what this should tell you is that even with all that monopolistic dominance, these companies are getting nicked and that translates into bigger cuts for lesser entities without a few billion users to cushion the blow. On the another level, if the giants are stomping around, and sulking about the market then, they are just going to rattle everyone else around them, whether they like it or not, and pass on their woes through shockwaves. We tend to eschew government and authority, but act like multi-trillion dollar corporations are our friends and the smartest people we know.

But, enough proselytizing. Let’s get to the point of all this for displays. Well, there are probably 5-6 billion TV users in the world. There isn’t any real connection to those users other than the ones who register a product for a warranty or something like a ThinkQ app. With connected TVs and just a general likelihood that TVs don’t play dumb anymore, the display industry needs to ask itself, How come we are so popular and yet so divorced from our users, we’re tech, too, dammit?! Maybe connected TVs can change all of that. Maybe the distribution channels, the regional make-up of the industry, and the general multi-tiered chain of supply and demand makes it impossible for display vendors to build that an active user mindset. You just have to ask yourselves, why?