The most important innovation of the century so far

Commerce is a great engine for innovation, and when new inventions arise, many are born out of a commercial opportunity. However, the long-term significance of any innovation is measured by its greater social impact. By enabling the mobile explosion that is bringing the internet to hundreds of millions of people each year, the Android chipset – the brains and guts of the Android smartphone – will be recognized as the most important innovation of the early 21st century.

Rudimentary smartphones created from a chipset loaded with Google’s free-to-use Android operating system (OS), a touchscreen and a battery are the driving force behind the mobile internet explosion. At present, over 80% of smartphones run on Android, and although smartphones carrying the Android OS come in many forms, the basic model of combining inexpensive components with an open-source OS has enabled enormous change by opening emerging markets to the mobile internet. With very little technical know-how, start-up smartphone brands can buy a chip and build a phone.

In 2012, the average price of an applications processor was $15-17, though low-cost chips were available to buy for as little as $7. In 2013, a low-end chip could be bought for $5. Other basic essentials were also inexpensive: $11-$13 for a touchscreen, $5-$6 for a battery.

As chip manufacturers such as Mediatek, Qualcomm and Spreadtrum have pushed prices down in a battle for market share, the low-end market has exploded. Year-on-year growth has been largely driven by rapid uptake in emerging markets. Around 725 million smartphones were sold in 2012, nearly 1 billion in 2013, and sales are expected to exceed 1 billion for the first time in 2014. Most of this year’s one-billion-plus smartphones will ship to emerging-market consumers: 283 million in China, 225 million in India, 47 million in Brazil and 46 million in Indonesia.

In these markets, it is already possible to buy an Android smartphone for around $30. By the end of the year, I expect prices will drop below $20.

The potential impact on people’s lives is almost inconceivable. Picture, for example, the change in India this year, where one-third of the population will soon access the world wide web through a smartphone.

The internet can bring emerging-market consumers into the global middle class. Smartphones are a path to empowerment that can enable people to increase their wealth and educate themselves. On low-cost devices, billions can connect to online banking and medical resources, to learning and job opportunities, to social media. Just a few years ago, this would have been all but impossible, but now it is an everyday reality for nearly half of the world’s population.

This is not a mere achievement; it is a technological revolution that is changing the world faster than any other in history. I am sure this century will see many more technological innovations – and I hope that most have a positive impact – but when the next great invention arrives, the people of the world will learn about it through their smartphones. That will be the legacy of the Android chipset.

Author: Nathan Eagle, CEO and co-founder of Jana Mobile

Image: A motorist talks on his mobile phone while waiting at a traffic junction in Hanoi, Vietnam, October 31, 2011. REUTERS/Kham