I think this interesting ReThink Wireless article predicting the end of a ‘smartphone decade’ as “consumers turn their fickle attentions to new devices” flies in the face of the advice to go Mobile First in 2016 and the fact that Smartphones have been with us for a lot longer than a decade already (eg. 17 years ago I had a Nokia 9100 Communicator smartphone!).
It also propels a common misconception about how the cost of smartphones is something that’s perpetually in decline so I thought it might be worth sharing my thoughts on it.
“Samsung gears up for tough year ahead as smartphone growth set to fall below 10% for the first time in 2016”
I don’t see how you can make a case for the ‘smartphone decade‘ being over based on the fact that US demand for new me-too Smartphones is waning a little? It might not be growing by more than 10% according to an analyst but the iPhone 6 has been a massive success, the low cost iPhone isn’t out yet, refurbished/second hand iPhones are finding new homes and the total market hasn’t actually stopped growing in size. Surely it’s obvious that by 2020 (by which time Tomi Ahonen predicted a smartphone as capable as the iPhone will retail for $10) it’s not going to be actually possible to buy a dumb/feature phone and the 2G networks that they use will be increasingly re-farmed for 3G broadband networks?
Clearly Apple’s Tim Cook (a man in control of a +$200 Billion cash reserve) doesn’t think it’s over for smartphones yet either…
…and why should he when for years you can have documented video consults with registered Doctors, record and share a Clinical Grade ECG and now it’s even possible to use your smartphone to give yourself a full head to toe ultrasound exam!
Perhaps I’m completely wrong but I can’t personally see the Smartphone era even beginning to end until there are low cost feature phones that feature clinical grade ECG and Ultrasound sensors that work straight out of the box.
“The decade of the smartphone will end this year, as upgrade fatigue sets in and consumers turn their fickle attentions to new devices… …And that is the other dilemma for the vendors. Everybody will still buy and carry a smartphone, they will just want to pay $150, not $600, for it, while still having all the latest features”
I remember hearing exactly the same talk in a meeting with the Head of Nokia Research in 2006 just before the iPhone came out. To think I had to sign 20 page NDAs to hear people rambling on about how they’d packed in features like GPS, browsers, video cameras, etc, etc, yet their research had conclusively shown that no one was prepared to pay anymore than they had paid for the last device that they bought (that in most cases was fully subsidised by the mobile operator).
Lacking the imagination to innovate they failed to see that Apple was about to increase the cost of smartphones while dramatically widening the appeal and then using apps developed by other people to sell their hardware (they did this by cutting out the Mobile Network Operator middleman and selling content directly to customers via their Appstore).
When you consider the success that Apple’s had with embedded SIM offerings and Apple Care/Financing plans for iPhones together with the success of Google’s Fi network, it stuns me that more haven’t realised that the fortunes of mobile handset manufacturers are primed to grow as they take yet another chunk out of the dying on the vine mobile operator relationship/revenues eg. you might today pay $150 for your handset and $480 to your MNO for your connectivity ($40/month x 12) but if you paid it all to Apple/Google that’s them still taking +$600 without even requiring a handset price increase.
“The economics will be extremely tough for most suppliers, hence the quest for new markets in the smart home or vehicle, and the broader Internet of Things”
There’s no industry as tough as Mobile but Samsung know this all too well (remember it wasn’t long ago that their brand jumped from #4 to #1 in just 2 years as Nokia – the industry #1 brand at the time – dropped off the cliff).
“Last month, Samsung announced a significant corporate reshuffle, replacing the head of its struggling handset operations with the executive, Koh Dong Jin, who led the creation of some important software platforms in security and mobile payments. Samsung, which lost over $8bn in market value in 2015, largely because of weakness in the smartphone and TV segments, will release preliminary fourth quarter figures on Friday, and is expected to announce its lowest annual net income figure for four years”
Samsung Mobile only exists because of it’s capacity to completely reinvent itself and I’m positive about the prospects following DJ Koh’s appointment. I had a meeting him in 2007 (before the original iPhone was launched) when he was Samsung’s Research VP and he’s a great listener and one of the smartest people I’ve ever met in the Mobile industry and even that far back he had a great interest and understanding of the mHealth opportunity.
Okay so the ‘Welt‘ belt they are launching this week at CES is probably going to be up there with one of the daftest things I’ve ever seen Samsung do (and the company really struggles with mHealth as it’s practically illegal in S Korea) but now that they’ve practically fired their entire US based mHealth team and have DJ Koh onboard the company will now hopefully get it’s mHealth strategy back on track.