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.
We may be hitting the power ceiling, but we're far off the battery life ceiling. (Ceiling as in consumer needs)
Remember, not too long ago, a cell phone that lasted all week was normal.
It is perhaps interesting to note that the ubiquity of both USB charging devices (standardization) and after-market Chinese clone batteries (free market competition) has sort of encouraged this obsolescence resistance by allowing devices to last longer.
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?
If Google doesn't come out with some compelling hardware (through motorola or otherwise), I'll definitely get the new iPhone.
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.
Of course, given those issues and noting some cracks in its home market (T-Mobile, more prepaid users)...
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.
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.
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.
Plus, tablets, which are really just handsets with bigger displays, are going to eat a majority of the PC business.
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.
Edit: For anyone that wants to try out their devices and compare, Linpack for Android is what I used. Finding out the MFlops of older PCs, I just looked up on the web.
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):
Also, too many mobile apps are still CRUD-over-the-wire.
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.
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.
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.
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.