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.
S2 with modified firmware here. Unless expecting a call, I leave it off most of the time, with the battery out. Since giving up commuting to an office, I don't really need it for music playback either. The power even in these three generation old devices is absolutely amazing... especially when you consider their GPUs. Unfortunately, it's totally underutilized by today's software.
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 switch for a good phone like the Nexus 4, about 2/3 of the size and the battery life of the iPhone 5. Otherwise I fall in the 'good enough' camp that unless some incredible new app or technology comes out that needs a new phone, I'm sticking with my N4 for a good while to come.
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 :)
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.
Absolutely. The contract model clearly isn't going anywhere. Outside the US, the contract model has had trouble taking root in many developed countries. And it has been flat-out rejected in the developing world.
Of course, given those issues and noting some cracks in its home market (T-Mobile, more prepaid users)...
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.
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.
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.
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.
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 . 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.
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.
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?
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):
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.
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.
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.