Smartphone Innovation Is Dead

There's a load of hype around smartphone models such as the "Facebook phone" and the "budget" iPhone. But they're budget phones! Why would anyone care? Because smartphone innovation, right now, is kind of dead, even though the smartphone market has never been more vibrant.

In a relatively short span of time, we'll know the full details on HTC's latest "Facebook" phone (tentatively titled the HTC First, if reports are to be believed), but at the time of writing, it appears that it'll be a distinctly mid-range smartphone. Frankly, I'll be stunned if it's anything but a mid-range phone, if only because HTC already has a premium phone in the HTC One. Why would you try to sell two premium phones at once in an already competitive market, and especially if you're already in the middle of reported supply problems?

Likewise, the rumours about the proposed "budget" iPhone just won't go away. Undoubtedly part of that is the general Apple rumour halo effect, which suggests that by now I should be watching Game Of Thrones on my 3rd generation Apple TV panel at the very least. Still, many analysts think that it would be a sensible move for Apple to enter the budget iPhone space, just as it has done with the iPad Mini.

So why get so excited about what should just be run-of-the-mill phones? It's because the smartphone market, as it currently stands, is a mature market. Most of the innovation of this generation is essentially done and dusted. The current state of smartphone innovation is dead.

Yes, processors will get better and screens may get a little sharper -- and hopefully a little less power-hungry -- but that's an evolution of time issue, not one of revolutionising the smartphone model as it is right now. Software is where we may see some slight innovation, such as Facebook's purported Home Screen, the various apps that Samsung's throwing into the Galaxy S4, or whatever it is that Apple does with iOS 7 if it ever comes out. Smartphones sit in the same kind of mature categories as laptops, printers and other established technology categories right now.

Does that mean that any kind of revolutionary change is impossible? Certainly not. Like it or not, Apple did revolutionise the mobile phone space with the iPhone back when it launched, shifting the focus away from pure phone calls into the world of additional applications and centralised software repositories.

To draw on the laptop example, if you look at a laptop from 15 years ago and one from today, while there are style differences and a whole lot of speed differences, the core underlying model is the same, and identifiably so. That old beige laptop looks much the same, and works much the same way as an Ultrabook. Grab a 15 year old mobile phone and a Galaxy Note II, and the difference couldn't be more stark. Indeed, that 15 year old phone has a lot more in common with the 40 year old model than it does the Note II.

No doubt, the boffins at Samsung, Motorola, Microsoft, HTC, Sony, and, yes, indeed, Apple are beavering away at the next revolutionary change in smartphones, if they're not all beaten to it by the next big smartphone company that's yet to emerge. Perhaps it'll be flexible phones. Maybe it'll be smartphones we make ourselves on 3D printers. Possibly it'll be eyePhones.

I'm not entirely convinced that we'll see any of those within the next couple of years, however, which means that the currently accepted smartphone model is here to stay. A few tweaks around the processor, a few gimmicks in apps and a lot more of a play towards the niches that haven't jumped on the smartphone bandwagon just yet.

Who are those people? They're not the high-end adopters, because that's the first place the now-mature smartphone market went. They're the people who "just want a phone as a phone", or those holding onto old handsets until they quite literally fall apart in their hands, at which time they'll want a new, but cheap phone replacement model -- which means even more budget and mid-range models to come.



    I'm just waiting for Apple to announce the iPhone mini, which will sport a 3.5 inch screen

    And for the Apple fanboys to claim it as revolutionary

    does anyone even use facebook so much that it would warrant a phone dedicated to it, that will most likely be yours for 24 months

      Every teenage girl these days pretty much lives on Facebook.

    You might say "who cares about budget phones" well the truth is: that's where the growth is.

    In first world countries, there is a market for $800 phones from Samsung and Apple - ok that's great but not everyone has that kind of money to spend. So that worldwide market might be 200 million people at best.

    The money is not in hardware, it's in apps. To grow an operating system you have to get the apps out there and the OS in the hands in the users.

    In 3rd world countries, smartphone sales are only just starting to take off, but these people can't afford $800 phones so they need $100 or less phones. The low end is necessary if Google and espeically Apple want their ecosystem to grow in the countries with the world's biggest populations - Africa, India and China. Well Africa not so much because 3G isn't available in most of that continent yet, and "dumb-phones" are the only things in use in many African nations.

    India and China on the other hand are experiencing rapid economic growth, which opens up the market for $200-400 smartphones in nations where many of it's people can't see a need for or afford an $800 "innovation" phone.

    Is Alex Kidman completely ignorant of how many billions of people around the world are still connected to 2G networks? Of course he is, or else this article would never have been written. He must also be completely ingorant of the amount of people who are working on minimum wage, are homeless, are travelling students, illegal immigrants, and teenagers whose parents don't give them anything they want. All of these people are in the market for the midrange to low end phones that Facebook and Firefox want to put out.

    If it sees the numbers of smartphone users increase, why is this article's author so against it?

      "Is Alex Kidman completely ignorant of how many billions of people around the world are still connected to 2G networks? Of course he is..."

      Wow. That's a huge -- and entirely unwarranted, I might add -- leap to make. Where in the article, exactly, did I say that mid-range phones were bad phones? Nowhere. Where did I pour scorn on those on lower wages, in different socio-economic environments? Nowhere.

      You know where the money for actual hardware innovation now blending into those mid-budget level phones comes from? It's the early adopters, the higher-income areas, that kind of thing -- the same as it is, for example, in vehicle designs and features. That's what I'm talking about here.

      Oh, no, wait, I'm "ignorant". Carry on attacking the author, because it's not like that's a new thing.

        Carry on attacking the author, because it's not like that's a new thing

        That's right, you're an author for Giz, You should be used to it by now!

        Back to your ignorance corner now! (said tongue in cheek)

        HI Alex - point taken - i should have pointed that out in my rant - my apologies for that.

        I was referring specifically to this line " But they’re budget phones! Why would anyone care?"

        Let me phrase my rant another way that isn't so inflamatory and address the question from the article more directly:

        There are people in this country who need to spend $800 on food, clothes, electricity, water, etc long before they can drop that kind of money on a smartphone. The people that care about budget phones are the vast majority of Australians who can no longer afford to spend $80+ per month on their phone bill or drop more than $500 on a single device purchase because the cost of living is rising rapidly.

        I understand there is a portion of the community who don't see cost of living pressures in the community as a growing problem but this group is shrinking. Perhaps more mobile companies are simply recognising this low-end of the market is growing and are aiming to sell more phones?

        It's how brands like huawei started out - selling lots of low end phones and then gradually maturing into the mid-range and high-end as the reputation and brand awareness improved.

        Hopefully that makes my problem with the statement from the article a little clearer.

        Last edited 04/04/13 5:54 pm

          You missed the actual aim of the article. It was only about the innovation of phone technology, nothing else. Anything you're saying re trends, usage, demographic users & networks is irrelevant to the article. As ever other person replying to you has pointed out, you completely missed the point. You may need to read it again as others a subtlety hinting at.

          A lot of low income earners I know own an iPhone 4/4S or Samsung S2+. A lot of school kids and students own a smartphone these days (just go to a train station at 4pm and you'll see). These groups of people don't make much money at all. I think 80-90% of Australians now own a smartphone. The costs of living are high but we do like to spend on and upgrade our gadgets.

      Ummm. I think the articles focus was on innovation potential in smart phones experiencing the laws of diminishing returns. Not necessarily about emerging markets, 2g, and the budget phones growth potential. Your arguments may be valid, but I'm not sure that's what the article was aimed at.

      You just went full retard... Never go full retard.

    I want to see phones targeted at special needs groups. My mother has poor eyesight and no tech knowledge. She needs to be able to find numbers easily and be able to read large fonts on the screen. Large, programmable hardware buttons, which can be preset for her particular needs. Let's see more specialist phones.

      The Galaxy Grand is aimed at this market:

      the i9082 model is dual-sim while the i9080 is not. A 5 inch display with 800 x 480 resolution makes for some very large fonts and easy reading - plus you can increase the font size for things like menus and text messages in android's settings and most web browsers can be configured to show large text (chrome does this very well)

    Been there done that: Facebook 3 years ago wih AT&T device=massive fail. But, hey, learn from ones failure and take over the iPhone market. Stranger things have happened.

    I don't know about innovation being dead - Google Glass seems pretty innovative to me.

    you guys are forgetting about windows phone.
    This is why I don't live in the android/iOS bubble any more

      I'll consider a move over to there just as soon as Microsoft:
      - introduce support for VPNs (Virtual Private Networks, something i use on andorid everyday)
      - introduce 1080p so manufacturer's can make a 5" windows phone

      After spending some time playing with windows phone (helping a friend set up his HTC 8S and showing him how to use it) I really like what Microsoft have done there.

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