Sohn’s thesis is that the growth opportunity is in the world’s emerging middle class wherever that may be happening, rather than following particular geographies or specific product types.
However this emerging middle class market is clear about what it wants – smartphones. “Consumers all want smartphones,” said Sohn, adding “the emerging markets are by-passing the PC.”
These emerging middle class consumers require a product which has full Internet connectivity, the growth of this market is controlled by the retail price with a target of $100 to $200 and the base performance requirement for the product is ARM11.
Supplying this market requires” new ways of doing things” said Sohn because no one can afford to do it all. Sohn praised ARM and ASML as “good examples of how you can become world-class companies dominating their space” by developing a surrounding ecosystem such as ASML’s initiative of getting its customers to invest in ASML to secure the funds to develop EUV.
Large companies have the problem of getting imaginative projects off the ground, said Sohn. He pointed out how Sun developed Java as an off-site secret project with a team small enough to sit around a table in a Chinese restaurant, and how a Lockheed Skunk Works delivered the first 400mph fighter plane with a small, isolated, crack team of engineers working in secrecy with short decision loops.