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When McKinsey told AT&T that smart phones were a small market
Consulting Humor
July 01, 2024
Happy Monday, team!
Gossip roundup
Top story: McKinsey told AT&T that smart phones weren’t an attractive opportunity in the 1980s
Source: McKinsey website
Underestimated Market: In the 1980s, McKinsey's conservative estimate of 900,000 cellular phones by 2000 led AT&T to exit the market prematurely.
Explosive Growth: By the late 90s, 900,000 new mobile subscribers were being added every three days, driven by competitive pricing and technological advancements.
Pre-Paid Revolution: The introduction of pre-paid phones dramatically increased accessibility, fueling market growth, particularly in economically challenged regions.
In the early 1980s, AT&T sought McKinsey's expertise to forecast the global market for cellular phones by the year 2000. McKinsey's assessment, highlighting issues such as bulky handsets, poor battery life, patchy coverage, and high costs, projected a market of only 900,000 units. This conservative estimate led AT&T to initially withdraw from the market.
By 1999, 900,000 new mobile subscribers were being added every three days globally. Mobile phone ownership had surged, especially in countries with competitive telecom markets, driven by falling prices and technological advancements. The introduction of pre-paid phones significantly boosted market penetration by making mobile services more accessible and affordable, particularly in regions with economic challenges.
Unfortunately, consulting firms can be wrong sometimes. This is a history lesson that hopefully reminds us all that no amount of due diligence can ever guarantee 100% certainty. Besides, there is still a good chance that AT&T is still a McKinsey client 😂
Read more here.
Got to be honest - the formatting on this chart is atrocious. Different font sizes, the random $20 bill is an eye sore, the % change on the left hand side that you can barely read… this one needs a #plzfix
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