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Jan 2, 2019 · 24m · a16z

a16z Podcast | Mobile Falls Hard for Virtual Reality

Benedict Evans · 19m spoken Michael Copeland · 3m spoken
0:00 / 0:00
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Analyst Benedict Evans joins host Michael Copeland on the a16z Podcast to review key insights from Mobile World Congress, analyzing mobile hardware commoditization, regional OEM market dynamics, and the rise of Virtual Reality as a future computing platform.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. How this is scored →

The host as informed peer 2.8 Guest teaching 6.5 Guest disagreement 1.5 The host pushing back 1.5
05100:0010:0020:005:15–9:18 · The host as informed peer 3/10 Emerging Trends at MWC and the VR Landscape Copeland guides the conversation by bringing up modular phone trends and asking how hardware makers profit from VR. Evans dominates the segment by providing deep context on MWC VR announcements, price points, and Apple's fast-follower strategy.9:18–13:44 · The host as informed peer 2/10 Android OEM Dynamics and Local Brand Dominance Evans delivers a detailed breakdown of global Android OEM dynamics, highlighting regional brands like Algeria's Condor and France's Wiko. He gently refines Copeland's PC clone comparison by explaining that mobile OEMs outsource manufacturing rather than assembling in-house.13:44–19:53 · The host as informed peer 3/10 Operating Margins, Google's Android Strategy, and Market Scale When Copeland guesses that TV margins are better than cement margins, Evans directly corrects him by noting TVs yield virtually no profit. Evans goes on to explain the massive scale of smartphone operating systems as user acquisition platforms relative to the PC market.19:53–24:22 · The host as informed peer 3/10 Value Chain Shifts, Future Platforms, and VR Demos Evans outlines how value has continually moved up the stack from telco networks to operating systems and application platforms. Copeland offers his personal take encouraging listeners to try entry-level VR, leading into Evans's description of crowd behavior at MWC.5:15–9:18 · Guest teaching 6/10 Emerging Trends at MWC and the VR Landscape Copeland guides the conversation by bringing up modular phone trends and asking how hardware makers profit from VR. Evans dominates the segment by providing deep context on MWC VR announcements, price points, and Apple's fast-follower strategy.9:18–13:44 · Guest teaching 7/10 Android OEM Dynamics and Local Brand Dominance Evans delivers a detailed breakdown of global Android OEM dynamics, highlighting regional brands like Algeria's Condor and France's Wiko. He gently refines Copeland's PC clone comparison by explaining that mobile OEMs outsource manufacturing rather than assembling in-house.13:44–19:53 · Guest teaching 7/10 Operating Margins, Google's Android Strategy, and Market Scale When Copeland guesses that TV margins are better than cement margins, Evans directly corrects him by noting TVs yield virtually no profit. Evans goes on to explain the massive scale of smartphone operating systems as user acquisition platforms relative to the PC market.19:53–24:22 · Guest teaching 6/10 Value Chain Shifts, Future Platforms, and VR Demos Evans outlines how value has continually moved up the stack from telco networks to operating systems and application platforms. Copeland offers his personal take encouraging listeners to try entry-level VR, leading into Evans's description of crowd behavior at MWC.5:15–9:18 · Guest disagreement 1/10 Emerging Trends at MWC and the VR Landscape Copeland guides the conversation by bringing up modular phone trends and asking how hardware makers profit from VR. Evans dominates the segment by providing deep context on MWC VR announcements, price points, and Apple's fast-follower strategy.9:18–13:44 · Guest disagreement 2/10 Android OEM Dynamics and Local Brand Dominance Evans delivers a detailed breakdown of global Android OEM dynamics, highlighting regional brands like Algeria's Condor and France's Wiko. He gently refines Copeland's PC clone comparison by explaining that mobile OEMs outsource manufacturing rather than assembling in-house.13:44–19:53 · Guest disagreement 2/10 Operating Margins, Google's Android Strategy, and Market Scale When Copeland guesses that TV margins are better than cement margins, Evans directly corrects him by noting TVs yield virtually no profit. Evans goes on to explain the massive scale of smartphone operating systems as user acquisition platforms relative to the PC market.19:53–24:22 · Guest disagreement 1/10 Value Chain Shifts, Future Platforms, and VR Demos Evans outlines how value has continually moved up the stack from telco networks to operating systems and application platforms. Copeland offers his personal take encouraging listeners to try entry-level VR, leading into Evans's description of crowd behavior at MWC.5:15–9:18 · The host pushing back 2/10 Emerging Trends at MWC and the VR Landscape Copeland guides the conversation by bringing up modular phone trends and asking how hardware makers profit from VR. Evans dominates the segment by providing deep context on MWC VR announcements, price points, and Apple's fast-follower strategy.9:18–13:44 · The host pushing back 1/10 Android OEM Dynamics and Local Brand Dominance Evans delivers a detailed breakdown of global Android OEM dynamics, highlighting regional brands like Algeria's Condor and France's Wiko. He gently refines Copeland's PC clone comparison by explaining that mobile OEMs outsource manufacturing rather than assembling in-house.13:44–19:53 · The host pushing back 2/10 Operating Margins, Google's Android Strategy, and Market Scale When Copeland guesses that TV margins are better than cement margins, Evans directly corrects him by noting TVs yield virtually no profit. Evans goes on to explain the massive scale of smartphone operating systems as user acquisition platforms relative to the PC market.19:53–24:22 · The host pushing back 1/10 Value Chain Shifts, Future Platforms, and VR Demos Evans outlines how value has continually moved up the stack from telco networks to operating systems and application platforms. Copeland offers his personal take encouraging listeners to try entry-level VR, leading into Evans's description of crowd behavior at MWC.

speaking balance: gold is the host, purple is the guest (3 minute bins)

0:00 · the host 0% · guest 100%0:00 · the host 0% · guest 100%3:00 · the host 0% · guest 100%3:00 · the host 0% · guest 100%6:00 · the host 0% · guest 100%6:00 · the host 0% · guest 100%9:00 · the host 0% · guest 100%9:00 · the host 0% · guest 100%12:00 · the host 0% · guest 100%12:00 · the host 0% · guest 100%15:00 · the host 0% · guest 100%15:00 · the host 0% · guest 100%18:00 · the host 0% · guest 100%18:00 · the host 0% · guest 100%21:00 · the host 0% · guest 100%21:00 · the host 0% · guest 100%24:00 · the host 0% · guest 100%24:00 · the host 0% · guest 100%
Sharpest disagreement ▶ 14:18 Direct Margin Rejection

Evans quickly counters Copeland's assumption about TV margins, pointing out that nobody makes any money in TV manufacturing.

 Hardest push from the host ▶ 8:29 Questioning VR Monetization

Copeland presses Evans on the economic reality of mobile VR, asking how hardware makers actually plan to monetize headsets beyond phone sales.

 Biggest teaching moment ▶ 14:18 TV Profitability Schooling

Evans corrects Copeland's misestimate on consumer electronics profitability, explaining that TV manufacturing operates at razor-thin half-point margins.

 The host holds their own ▶ 5:16 Identifying Modular Phone Shift

Copeland shows strong sector awareness by identifying modular phone announcements at MWC as an attempt to challenge Apple's design form factor.
the scores for every segment, with the reasoning behind each
ChapterTopicThe host as informed peerGuest teachingGuest disagreementThe host pushing backWhy
Emerging Trends at MWC and the VR Landscape 3612 Copeland guides the conversation by bringing up modular phone trends and asking how hardware makers profit from VR. Evans dominates the segment by providing deep context on MWC VR announcements, price points, and Apple's fast-follower strategy.
Android OEM Dynamics and Local Brand Dominance 2721 Evans delivers a detailed breakdown of global Android OEM dynamics, highlighting regional brands like Algeria's Condor and France's Wiko. He gently refines Copeland's PC clone comparison by explaining that mobile OEMs outsource manufacturing rather than assembling in-house.
Operating Margins, Google's Android Strategy, and Market Scale 3722 When Copeland guesses that TV margins are better than cement margins, Evans directly corrects him by noting TVs yield virtually no profit. Evans goes on to explain the massive scale of smartphone operating systems as user acquisition platforms relative to the PC market.
Value Chain Shifts, Future Platforms, and VR Demos 3611 Evans outlines how value has continually moved up the stack from telco networks to operating systems and application platforms. Copeland offers his personal take encouraging listeners to try entry-level VR, leading into Evans's description of crowd behavior at MWC.

Statements from this episode (5)

Assertion Supported
Evans: Global telecoms is a $1.2T industry, 10x online advertising
“Telcos, which is about a 1.2 trillion dollar industry, so over double the size of the entire online, and the entire advertising industry for context, and something like 10 times the size of the online advertising industry.”
Benedict Evans Jan 2, 2019 ▶ 0:29
Assertion Supported
Evans: European telecom carrier revenue has been flat or down for a decade
“The European operators, their revenue has been flat down for over a decade.”
Benedict Evans Jan 2, 2019 ▶ 3:24
Prediction Not checkable as stated
Evans: Apple will wait to enter VR before releasing a market-defining product
“There'll be, my suspicion is they'll wait a while. Apple tends to be kind of a fast follower in this stuff and then come in with what they hope is kind of a market defining product.”
Benedict Evans Jan 2, 2019 ▶ 9:06
Assertion Supported
Wholesale entry-level 3G Android phones cost $25-$30 and 4G cost $40
“And incidentally, the entry price of an Android, three G Android phone now, with half a gig of memory, is probably 40 to 50, no. 25 to 30 dollars wholesale. And then four G is more like 40 dollars.”
Benedict Evans Jan 2, 2019 ▶ 11:20
Assertion Partly supported
Evans: None of the original cellular pioneers remain in the handset business
“If you think back again, 15 years ago, none of the companies that kind of created cellular are in the handset business anymore. Like, none of them. They're all out of it. Like, Nokia, Ericsson, Siemens, you know, Motorola. All of those companies are out of the…”
Benedict Evans Jan 2, 2019 ▶ 20:52
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