How McKinsey Misjudged the Cell Phone Revolution

In the 1980s, AT&T was faced with a new and emerging technology—the cell phone. At the time, they were dominating the landline business and couldn’t fathom the impact of this new technology. To get a clearer picture of the future, they turned to the experts at McKinsey for a study. Their question was simple: How many cell phones will there be in circulation by the year 2000?

McKinsey’s response? A mere 900,000. Fast forward to the year 2000, and there were 200 million cell phones in circulation—an order of magnitude off.

Why such a massive misjudgment? It turns out, McKinsey and many others underestimated the exponential nature of technological growth. Technology doesn’t grow linearly—it advances at a pace that often surprises even the experts. This is something we’re witnessing today with advancements in AI tools like MidJourney, which have gone from basic image generation to creating complex animated shorts in just a matter of years.

The lesson here? The future is unpredictable, and it’s often shaped by rapid, exponential changes that are difficult to forecast. From the cell phone revolution to AI advancements, we are seeing technology evolve in ways we never thought possible.