Is the ‘winner takes all’ era for marketplaces coming to an end?

On Monday this week taxi app Lyft raising a new $1bn round which included $500m from General Motors. Twelve months ago the received wisdom was that Uber was on a tear and it’s competitors would fail and in response to this  funding news LA Times wrote a piece questioning whether the ‘winner takes all phenomenon’ that characterises so much of the internet doesn’t apply in transportation.

I’m wondering whether the ‘winner takes all phenomenon’ is disappearing more broadly.

In mobile we now have two ecosystems – iOS and Android – that look like they’re self-sustaining. According to observers like Benedict Evans the answer to whether Google or Apple won the mobile internet wars is that ‘both have’.

It could well be that now that in many industries the global market now operates as one massive market with space for multiple large ecosystems to co-exist next to one another.

  • Everyone in the US thinks the iPhone costs $99-199 because of carrier subsidy plans. When you walk the phone store you are given a choice of about a dozen phones ranging from $0 to $199. This causes most people to pick an iPhone at $99 since there is minor financial incentive to pick anything else. It doesn’t matter if you pick a $30 phone or a $900 phone, you’re going to be stuck with the same subsidy payment. And all that happen is that the phone company makes a pile of money off from you if you pick the $30 phone.

    When your two year lock-in (ie payment plan) is up, the carrier does not lower the price of your cell plan. You continue paying $40+ a month even though your phone is paid off. So what do you do? Of course you go get a new phone, they’re free! I’ve thrown out a perfectly good $400 phone and picked up a new free one just because the battery wouldn’t hold a charge. These plans incentivize irrational behavior.

    Now that the carrier subsidies plans are ending. People are going to learn that their iPhone really costs $800 and they have to pay financing charges on it. I suspect this is going to have an immediate and large impact on the number of iPhones sold in the US. Give it 18 months, lets see what happens. The subsidies just started being phased out a few months ago. BTW, they were never “subsidies” they were hidden payments.

    Hopefully now I will stop standing behind people in the grocery store using food stamps while talking on their iPhones.

  • Pingback: Sustainable startup growth and venture capital | THE EQUITY KICKER()

  • Pingback: Does the winner really take all in Silicon Valley? - Invest In Changing The World()