The new reigning champion? The cell phone.
The devices left in its wake:
- Digital assistant
- Digital camera
- Alarm clock
- Radar detector
- GPS device
- Video game
- Answering machine
These are just a few. Many many more are being “destroyed” everyday.
Investors should heed the mobile phone’s Schumpeterian powers. When the century began, bankers ‘beamed’ each other information via the now-quaint infrared technology of the Palm Pilot, whose maker boasted a $92 billion market value. Palm shifted into mobile phones but lost 97 percent of its value along the way. This should provide a cautionary tale to other industries standing in the cell phone’s path.
But is this a good thing? With all of these “industries” going the way of the dinosaur, aren’t we all worse off?
There will certainly be winners from the cell phone’s creative destructive properties. New companies will spring up to innovate. Each wave of technological innovation creates more market cap than the one it replaces, Morgan Stanley notes.
Indeed. Rage on.