
Has the Smartphone Boom Peaked? - ytNumbers
http://www.forbes.com/sites/roberthof/2013/07/07/has-the-smartphone-boom-peaked-ominous-signs-pile-up/?partner=yahootix
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vyrotek
I think a lot of people are getting to the point of having a smartphone that
is "good enough" and can last them a while. Just like what happened with PC &
laptop sales.

All the hardware has reached the point of letting people use Facebook, Email,
Take HD photos, and use GPS navigation. A huge number of consumers don't have
a reason to upgrade.

Personally, I have a S3 and I will stick with this thing for a while well
beyond my contract ending. If I do switch, it will only be because Sprint
finally released a decent Windows Phone. I'm only willing to switch to try a
completely new phone experience. It's hard to get excited about getting a new
phone but staying with the same OS you're on now.

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psbp
I'm still happy with my iPhone 4. It's not as snappy as it use to be, and I
had to replace the battery last year, but it's still good enough for my needs.

I'll see what the iPhone 6 or the Nexus 5 have to offer, but if they won't
radically change my day to day use, why bother upgrading?

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maxjus
I had an iPhone 4 until a few weeks ago, much in the same mindset as yourself.
Though it can do 99% of what the 5 does, the speed difference really makes it
feel like a completely different experience. Also the new screen has a much
better aspect ratio for watching videos. It sounds silly, but that was my
experience. If you're due for an upgrade I would highly recommend it. I
promise I don't work for Apple :)

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chime
Using iOS7 beta with painfully slow animations on my brand new iPhone 5, I
have a feeling that iPhone 6 will make iOS7 fly, giving me a good reason to
upgrade.

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programminggeek
Um, the smartphone has one advantage over the PC or laptop or server - it will
get broke and replaced every 2 years (or less) like clockwork.

Phones are small, easy to drop, and you carry them with you everywhere. Also,
with contracts they have a built in 2 year replacement plan. They are the
disposable tech.

So, in terms of pure growth, maybe that is slowing or will slow down, but that
doesn't mean people will stop buying smartphones, it just means that they will
be a large, sustainable, profitable product worth selling for a good long
time.

That might get boring to write about, but there will be a lot of successful
companies making a lot of money selling phones for a long time.

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w1ntermute
Without the contract model, I think that the rate of phone replacement will
drastically decrease. Although some people do break their phones, I know
plenty of people who don't.

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pekk
The contract model isn't going anywhere.

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w1ntermute
If T-Mobile continues improving its network and people realize that they don't
need to get a new phone every 2 years, things could start to look very
different.

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adventured
The boom has peaked, the initial explosion. This is somewhere between 1988 and
1994 in PC terms however. The market will still double in size globally over
the next decade, reaching deeper into the bottom 50% of consumers that have a
hard time affording an Internet connected smart phone today.

There are also a vast array of innovations yet to be uncovered, as we connect
our lives in a mobile way. In that regard it goes far beyond the innovation
limits of the desktop computer (for example). Indeed, having max distribution
will facilitate an innovation boom for mobile.

So while 75% of American adults might have a smart phone, that says nothing
about the pace of innovation for either the hardware or software, and that's
far more important than the sales growth rate in my opinion.

As you get closer to max distribution, the profit center will shift to the
software and away from the hardware.

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habosa
We've passed the adoption peak, but a truly good smartphone is still somewhat
rare. If you look at where we are with laptops, you can walk into Best Buy and
pick up a 15", Core i5, 4GB RAM, 250GB HDD laptop for ~$500. For smartphones,
the equivalent would be a Tegra 3 device with a 720p screen and 1-2GB RAM for
$100. We're not there yet, and when we are there the potential to harness the
collective mobile power will be incredible.

Edit: And all of that is just focusing on the US perspective. The adoption of
smartphones in less developed countries is a whole different topic.

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fpgeek
Ugh, not Tegra 3 - dual-core Snapdragon S4/400 or better, please. And LTE
(HSPA+ and lesser standards are and 802.11b equivalent, at best).

But, thematically, you're absolutely right. We're very close to actually good
$99 smartphones and tablets. And when that hits, we're going to see a phase
transition.

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fpgeek
Sigh. No. The _expensive_ smartphone book may have peaked, but that's not the
important one.

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contingencies
Right. As cheaper smartphones penetrate the developing world as the new
globally dominant internet access and personal media consumption devices, they
will provide huge potential for many people who have formerly been
educationally marginalized to seek and impart information freely. That will
also have some market changing potential, particularly in certain ubiquitous
services.

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Zigurd
There are significant improvements in battery life, display technology, glass,
and packaging yet to come. plus 4G radios and BLE. Let's talk in 4 or 5 years.

Plus, tablets, which are really just handsets with bigger displays, are going
to eat a majority of the PC business.

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jemeshsu
I think its peak for certain markets such as US, Japan. But it is not so for
markets such as China, India, and these requires a lower priced models. That's
why Apple is likely to introduce cheaper models in September to sustain its
growth, largely targeting these markets.

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nivla
I feel phones don't correlate well with affordability. People tend to invest
more into commodities that have a sense of usability, social status and a
statement of fashion. I remember reading somewhere that India has more mobile
phones than toilets. Even taking your own example, Apple's Iphone has about 3%
market share in India [1]. 3% of the total handset market not just the smart
phone market. It relates to about 26.79 million subscribers, and at a cost of
$600 each (which is way more than an average middle class Indian could
afford), that is pretty unbelievable.

[1] [http://www.zdnet.com/iphone-takes-3-percent-handset-
market-s...](http://www.zdnet.com/iphone-takes-3-percent-handset-market-share-
in-india-analyst-7000016190/)

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Ologn
If you look at the smartphone:handset chart, North America was above everyone
else for years, then Western Europe began catching up. Of course, the US has
an oligopoly running the wireless market: Verizon, who also controls the local
loop in much of the country has the most advanced network. Then AT&T has the
next best data network, although their voice and other service leaves
something to be desired. Sprint is next, and has very little LTE rolled out,
even in major markets - even their 4G can be spotty. Then T-Mobile, which has
barely been surviving.

This oligopoly funded a lot of the high-end smartphone development. Companies
wanted people signed up to those two-year $100 a month or more plans, and with
numbers like that, the cost of the phone is relatively low. It makes sense for
the oligopoly to subsidize a high-end phone people will like, so they'll be
more willing to take that two-year, $100+ a month plan. Smartphone models get
better and better - I have a Galaxy S and sometimes use a Galaxy S4 - the
improvement in the three years from the S to the S4 has been very dramatic. My
Galaxy S feels so slow as molasses and dated in comparison. Even the GPS
uplink seems to take forever on the S, relative to the S4.

Android activates 1.5 million devices a day. That daily activation rate has
only been accelerating over the past few years. So far 900 million Android
devices have been activated. Obviously the acceleration of the daily
activation rate has to slow sooner or later.

Android is not yet mature by any means. Google's implementation of staged
rollouts for Android is less than two months old. And they are very welcome
from my end - I beta-test but was terrified of releasing an update to popular
apps for a variety of reasons. Now I can roll it out to a small percentage -
if there's a problem I can rollback the update, if it looks OK I can keep
rolling out to more people until the update is all out. Google's app
translation coordination service trial just kicked in on Friday.

While it's mentioned times are still good for app developers, one reason for
that is tablets. Even if the smartphone market gets saturated, tablets still
have room to grow. And tablets are just one of the possible Android form
factors.

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sliverstorm
Quick! Smartphone developers, start adopting more lazy coding, and maybe we
can double the CPU cycles and RAM size required to run Facebook in the next
couple years!

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nivla
It astonishes me as to how certain apps are laggy on phones that are twice or
more powerful than an average netbook. Smartphone don't even support true
multiprocessing so where are all the resources sucked up to?

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venomsnake
Well the model to not run code directly on the phone but in vm has laginess
built-in and you can only mask it. I never understood the point of Dalvik.

~~~
fpgeek
You might consider asking Intel and MIPS about the point of Dalvik -
especially Intel given the current rumors about Bay Trail performance.

~~~
venomsnake
Can you explain please?

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fpgeek
Intel and MIPS have Android ports to their respective architectures - enabled,
in part, by Dalvik.

So far, neither company has made a significant dent in the Android smartphone
or tablet market, but that may be about to change for Intel. There's a leaked
benchmark of their upcoming tablet SoC (Bay Trail) showing it easily beating
the best ARM has to offer today (Snapdragon 800)... with one hand tied behind
its back (apparently clocked at 1.1 GHz when Bay Trail is expected to go to
2.1 GHz):

[http://www.extremetech.com/computing/160320-intel-bay-
trail-...](http://www.extremetech.com/computing/160320-intel-bay-trail-
benchmark-appears-online-crushes-fastest-snapdragon-arm-soc-by-30)

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zw123456
The overall penetration of smart phones is around 50% as stated in the
article, to take the last half, the price will need to come way down and they
need to be much simpler to use. The second half of the users will always be
less sophisticated and hence the incremental benefit they perceive from a new
device will be far less than the techie market and they will be far less
willing to spend time learning how to use it. Even though the wireless
carriers currently subsidize more than half the cost of most devices, they
make that up by charging extra for a "data plan". All that will need to go
away and the overall price differential, both up front and per month will need
to be much less significant that it is now between a basic phone and a smart
phone before that second half can be captured.

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ctdonath
_When software becomes the more important factor in a technology product, you
know the hardware is likely to take more of a back seat in years to come._

No, high demand for software drives hardware demand. So long as real
innovation and advancement continues we will need more processing power &
storage to keep up. Market saturation may be reached, but giving people a
reason to upgrade ASAP keeps demand up.

It's when the apps settle down into stable patterns that the hardware will
suffer. The PC market is stagnating because email, web, word processing, and
casual games are not demanding more over time (save for what bells and
whistles can be forced in), leaving us with a market where a $200 notebook is
good enough for most users ... And tablets are eating into that.

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hkmurakami
Not till the developing markets have been penetrated.

I'm shocked that this article doesn't even non first world markets. If current
smartphones have surpassed user needs, then clearly we're in a classic
innovator's dilemma situation where there are opportunities abound for new
entrants at the bottom of the market. This shift to low cost smartphones is
still in its early stages. Let's see how that spectrum develops.

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emersonrsantos
While iPhone peaked in US/EU, Android peaked in Japanese/Korean markets.
There's plenty of space for both markets to expand.

We can see more value in iPhone app/music/content market, but to Android close
the gap at US/EU they need to expand and refine to the quality of Apple
products.

~~~
w1ntermute
I can see a valid argument for this in the tablet space, but in the phone
market, Android has been on par with the iPhone (and indeed surpassed it in
many ways) for at least one year.

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venomsnake
I wonder if the trend has something to do with the fact nowadays you just
don't "need" the phone in smartphone.

I have been reducing the total minutes talked per month for years now and more
and more of my voice communication is on skype/viber etc. And that is not
uncommon trend.

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georgeoliver
I think a more interesting question that the article just briefly hints at is
what will replace the smartphone, and when? If the phone is a PC, what's the
laptop?

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lttlrck
If it has it happened remarkably quickly...

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venomsnake
Well not at all ... half the world cannot afford device with BOM of 100$. And
when you ship 600 million devices per year you get the low hanging fruit of
3.5 billion very fast.

