Google’s Eric Schmidt: ‘Rise of smartphone app is reordering the dominance of tech leaders’

The battle between technology providers to produce the most expansive and useful ecosystem for advertisers and consumers online will be predicated on who can exploit the mobile app rush, according to Google executive chairman Eric Schmidt.

Speaking on The Future of the Digital Economy panel at the World Economy Forum yesterday evening (22 January), Schmidt said mobile apps have become a cornerstone of people’s lives. With more people accessing the web through mobile devices, the technology industry is experiencing a major inflection point that businesses risk missing out on if they don’t commit to it, he warned.

“You’re seeing a reordering of the dominance of [technology] leaders because the rise of the app on the smartphone”, claimed Schmidt.

The observation spotlights an area of mobile real estate tipped to be a significant revenue driver for the likes of Google, Facebook, developers and advertisers alike. Google, along with its counterparts, is in a race to supply the highest return for app spend, which has seen them try to outdo each other with ad formats and most recently tussle for app install ads.

“All bets are off at this point as to what the smartphone infrastructure will look like. You have a whole new set of players that are taking this platform, which is essentially a supercomputer, and all of us spend a great deal of time thinking about what are the apps people are going to use and how they are going to use it solve their problem. It’s a completely open market”, he added.

To survive in the expanding market, companies have to redefine what mobility means, focusing on how apps change customers’ lives instead of the short-term gains to be made. Speaking on the same panel, Microsoft chief executive Satya Nadella espoused the approach as one that would shape the future of the internet.

“Today’s form factor is the phone. It’s done a fantastic job democratising access and enabling all this inclusion. It’s only going to become more pervasive”, said Nadella.

“The ‘internet of things’ is what people talk about and there's different types of battery needs, there’s different types of connectivity needs that make computing ubiquitous and intelligence ambient.”

But in order to reach this technological nirvana Nadella said there needs to be a “new global consensus” that allows technology to flourish but at the same time respect the “legitimate”, “cultural”, “societal” and government interests.

“In order for us to truly see the benefits of tech we need to get to that global consensus”, he added. “That narrative has to be broadly understood and believed in. The second aspect is this balance between privacy and the use of data for legitimate public safety.”

This global consensus to establishing trust in technology is key to avoiding fragmentation. Technology is global by definition and yet there is a tendency for regionalisation and fragmentation to sprout from its growth, said the Microsoft boss.

Vittorio Colao, chief executive officer of Vodafone Group, told attendees at the same panel that a “positive and constructive trust environment” needed to be re-established between technology providers, governments, planners and customers to spur the digital economy forward.

“In Europe there is a great opportunity to create harmonisation because we have something called the European Union that should harmonise [the fragmentation] because otherwise we slow down the movie and if we slow down the movie we take away a lot of the benefits from essentially the less fortunate as well as ourselves", he added.

The internet is on the cusp of a transformation, accelerated by the ubiquity of mobile, that will disrupt and digitise many industries but only if transparency around privacy can evolve with it.

Seb Joseph

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