The challenges and opportunities of a second mobile revolution in which smartphones deliver essential services in the developing world
The Second Smartphone Revolution — Benedict Evans tweeted out this chart yesterday: … The first 2.5bn smartphones brought us Instagram, Snapchat …
Context & Ripple Effects
Fred Wilson is riffing on a Benedict Evans chart showing the first ~2.5B smartphones produced consumer apps like Instagram and Snapchat, and asking what the *next* 2.5 billion devices unlock. Evans had spent late 2015 laying out the mechanics in his 16 mobile theses, arguing smartphones would become the primary computer for people who never owned a PC.
The developing-world angle is where that thesis gets tested against infrastructure reality: by 2019, carriers were still fighting for basic access, with MTN and Orange selling ~$20 KaiOS feature-phones to expand internet reach across Africa. This post sits at the hinge between 'smartphones as entertainment' and 'smartphones as the delivery layer for banking, health, and government services.'
First-order effects
- The next wave of smartphone users comes online without desktop predecessors, so essential services — payments, identity, healthcare — get designed mobile-first rather than ported from web incumbents.
- Carriers like MTN and Orange move up the value chain from connectivity sellers to distribution gatekeepers, since whoever controls the affordable handset controls which services reach these users.
Second-order effects
- Device makers are forced down an extreme cost curve — the ~$20 KaiOS tier shows hardware economics bending to meet carrier price points, splitting the market from flagship-driven design.
- Western consumer platforms that grew rich on the first 2.5B users face a growth mismatch: their ad-funded models assume disposable income and saturated engagement that developing-market users don't yet provide.
Third-order effects
- If essential services consolidate onto the handset, the phone becomes de facto national infrastructure in these markets — pulling regulators into questions of mobile-money licensing, interoperability, and carrier concentration that never arose when phones carried only social apps.
- The industry's center of gravity shifts from app-store ecosystems optimized for developed-market consumers to service-delivery platforms where the operating system choice (Android, KaiOS) determines who can offer banking or identity at all.
The trend: Smartphone growth is migrating from consumer-app saturation in wealthy markets to essential-service delivery across the developing world, with carrier-subsidized ultra-cheap hardware setting the pace.