Two related issues need to be addressed when considering market potential in a new field

Source: Internet
Author: User
Keywords Evans
Tags addressed android apple change data get google + how many

Absrtact: When considering the market potential in a new field, you actually need to solve two related problems: first you have to review how it is now and see how much cheaper it can be. Second, you need to think about who will buy it now if it gets better and cheaper

There are actually two related issues that need to be addressed when considering market potential in a new field:

• First you have to review how it is now and see how much it can get a lot cheaper

Second, you need to think about who's going to buy it now, and who will buy it if it gets better and cheaper, and how to use it.

The second question is difficult. People who know a bit of history should know that when they look at the size of a brick, they say, "Just give it time, this thing can be as big as a card, and the price is only 100 dollars." "Understanding technology should be easy to understand." But the market would be much smaller if the car instead was just a carriage. So it's hard to predict Wal-Mart and Los Angeles.

In other words, predicting "cheaper and better" is easier than predicting subsequent behavioral changes. Pricing is just a variable-it doesn't matter if the price falls to a certain level. Cheaper and better is a necessary and not sufficient condition, and may not guarantee that billions of people will follow it. There has to be a theory to prove why more and more people care about it.

So if I show you a PC for 2015 years in 1975 years, can you predict that there will be 1.5 billion computers on Earth in 40 years? Why? When you look at the iphone or Android phone in 1995, can you predict that there are 4 billion (4/5 adults) in the world now?

So to estimate the size of the market, you have to figure out who cares if the price is cheap. To do this, you will look for numbers that may tell you the answer, such as other similar products, or competitive products-those that can act as agents for you to observe what others think of you. But some markets may be able to get a lot of data, while others can only be guessed.

First, some people will consider entering an existing, quite mature market, with excellent products and attractive prices, hoping to take market share. In this case you already know what the market size is--that is, you know why everyone uses it. For example, the American fridge market is millions, with y million families buying and replacing every x annual. Its price has been low to every household has one, product life can be up to 10 years, so unless the move or repair the kitchen will change. Therefore, the annual sales of the whole market is not you can control, but you can take the share. You can let others buy you, but you can't let them buy more, so the question is how you get the market share through better mode of operation.

Second, there are people who will create a new market. The PC is an example: imagine that you want to predict this thing in 1980. You can see the sales of typewriters, you know how many middle-class families are, and you can assume that only businesses and middle-class families can afford one in the coming decades. But you don't know that the Internet is the key driver of consumer PCs, you don't know how many office typewriters will turn into PCs, or how many typing groups will disappear, and you don't know that every executive will write an email instead of a personal assistant (note: Think about the scene in a mad man).

Mobile phones are the same problem. You can do a bottom-up analysis to estimate how many business travellers, taxi drivers or couriers, and so on, and then figure out the proportion of the population percent. A lot of people did that in the 1990 's. But these guys are all wrong. Mobile phones, like PCs, you have to look at the unknown with an imaginative eye-"I think" the experience is transformative, and people on Earth will buy one if they have money. Moore's law is concerned that "money" means 405 billion of the population, but it is imagination that makes little girls indulge in texting. You can predict that a mobile phone can become very cheap, but it's not clear what it means.

From this perspective, the two mobile ads in the early days of the mobile era are worth comparing. The first ad is very rational, "how many people will need this" start, that is, the so-called "percent" analysis method. The second orange advertisement assumes that everyone wants to have a mobile phone is our job because we are changing the world. Mobile phones do not have special user cases-they are ubiquitous products. So when CEO Hans Snook everywhere that Britain's penetration rate would reach 150%, most people thought he was crazy (note that Cellnet's ad was done 2 years later).

This is also a problem when predicting Apple's watch sales. The annual sales of watches are probably more than 1 billion, and everyone buys watches from 5 dollars (China exported 600 million watches last year, the average price is 3 dollars) to 500, 5000 or even 50000 dollars. But this information has no value. How much you would like to buy a watch or not to buy a watch doesn't tell me whether a new product is attractive. You bought a watch X years ago, and the average replacement rate for your watch is Y. These things don't tell me if you're going to replace that old watch with Apple Watch tomorrow.

That is to say, while you can persuade hundreds of millions of people to buy smart watches in principle, the study of the current watch market does not give a clear conclusion as to how many people are willing to buy it. This is akin to predicting the PC by examining the typewriter market. Look at the broader market for luxury goods that may help (how many women buy 500 to 1000 dollars a year)? Or take a look at the camera market or mobile phone market that is being killed by smartphones. You can use high-end mobile phone market as a springboard for research, but also can be a triangulation of speculation. But we really have to wait and see. How many people find a place in their own lives (smart watches)? We have no data. Just as 20 years ago we had no data to support the idea that almost everyone would find a place for mobile phones.

Third, there may be companies between the first and second types-the market is basically fixed but small where there is a lot of variability. Like the iphone and Android. The global mobile phone market around 3.5 billion to 4 billion users, in accordance with macroeconomic laws in the steady development of more and more widely distributed. Apple and Google haven't changed that-they can't. The number of people who buy mobile phones or even the frequency of their phones has not changed, but by redefining the phone Apple changes the use of mobile phones, and Android to the low price, so that the two occupy about 70% of the sales. As a result, from 2007 to 2014, the average selling price of mobile phones increased by more than 1 time times, from 801 U.S. dollars to about 185 dollars.

Legendary ice hockey player Wayne Gretzy has a far-advanced sense of being able to predict where the puck will appear rather than where it is now, but Apple and Google do not-but change the definition of the game. Similarly, the goal of getting a share of the Y billion market is short-sighted-great companies change y instead of X. So it would be interesting to see how Apple plans to make cars. I'm not sure the size of the market will change as much as a mobile phone.

 

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