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December 8, 2015
The Battle for the Second Screen
December 1, 2015
Smart Assistants Making Progress…But Slowly
November 24, 2015
Consumer Device Purchase Trends
November 17, 2015
Screenless Wearables and New Means of Interaction
November 10, 2015
The Technological Magic of Autodiscovery
November 3, 2015
IOT's Biggest Impact? Business Models
October 26, 2015
Mobility Isn’t Just a Technology, It’s a Mindset
October 20, 2015
The Arrogance of Tech
October 13, 2015
The Tech World Moves to AND, Away from OR
October 6, 2015
Reimagining Personal Computers
September 29, 2015
The Rebirth of Virtual Clients
September 23, 2015
What's Next for Consumer Tech?
September 15, 2015
The Key to IOT Security
September 9, 2015
Home Gateways: Extinction or Evolution?
September 1, 2015
The Real Software Revolution? It’s in the Data Center
August 25, 2015
Is The Tech Market Hitting Middle Age?
August 18, 2015
Building Vertical Platforms for IOT
August 4, 2015
The IOT Monetization Problem
July 28, 2015
The Windows 10 Hardware Argument
July 21, 2015
The Complexity Challenge Drives Shadow IT
July 14, 2015
The Hidden Opportunity of Corporate Smartphones
July 7, 2015
The Analytics of IOT
June 30, 2015
IOT Momentum Starting to Build
June 23, 2015
Breaking the IOT Connection
June 16, 2015
Software is a Service
June 9, 2015
The Challenge of Rising Expectations
June 4, 2015
Insider Extra: Rethinking the Conference Room
June 2, 2015
Win10 + Intel Skylake + Thunderbolt 3 = Interesting PC
May 26, 2015
The IOT Opportunity is Wide Open
May 21, 2015
Insider Extra: The Carrier Challenge for Consumer IOT
May 19, 2015
Maker Movement Drives the Future
May 14, 2015
Insider Extra: The Next Step for Wearables: Health Care
May 12, 2015
Making Sense of IOT
May 5, 2015
A Fresh Look at Wearables
April 30, 2015
Insider Extra: The Amazing HoloLens Leap
April 28, 2015
The Device Dream Team: Large Smartphones and Thin Notebooks
April 23, 2015
Insider Extra: Mobile Sites Should Be Dead
April 21, 2015
Wearables + Connected Cars = IOT Heaven
April 14, 2015
The Future of Wearable Power Is Energy Harvesting
April 7, 2015
Twinning Is Key to Connected Devices
April 2, 2015
Insider Extra: Competing Standard Co-Existence For Wireless Charging and IOT
March 31, 2015
Riding the High-Res Tidal Wave
March 24, 2015
Smart Cars Accelerating Slowly
March 19, 2015
Insider Extra: The Future of Computing is Invisible
March 17, 2015
Smart Home Decade Dilemma
March 10, 2015
Apple Event Surprises
March 3, 2015
Flat Slab Finale?
February 26, 2015
Insider Extra: "Phablet" Impact Continues to Grow
February 24, 2015
Paying for Digital Privacy
February 19, 2015
Insider Extra: The Wire-Free PC
February 17, 2015
Whither Apple?
February 12, 2015
Insider Extra: The Real IOT Opportunity? Industry
February 10, 2015
Business Models For The Internet of Things (IOT)
February 5, 2015
Insider Extra: Is "Mobile Only" The Future?
February 3, 2015
Sexiest New Devices? PCs...
January 29, 2015
Insider Extra: iPhone Next
January 27, 2015
How Will Windows 10 Impact PCs and Tablets?
January 22, 2015
Insider Extra: Hands-On (or Heads-on) With HoloLens
January 20, 2015
Whither Windows 10?
January 15, 2015
Insider Extra: Mobile Security: The Key to a Successful BYOD Implementation
January 13, 2015
Smart Home Situation Likely To Get Worse Before It Gets Better
January 6, 2015
More Tech Predictions for 2015
December 30, 2014
Top 5 Tech Predictions for 2015
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December 15, 2015
By Bob O'Donnell
The problem isn’t a new one for technology products, but it is for smartphones.
After a long, powerful run, the smartphone market is starting to peak. In the US, the market is likely to be flat or even modestly down either this year or next. In the fast-growing China market, they already experienced year-over-year smartphone shipment declines in the first quarter of this year. On a worldwide basis, growth is still expected to occur in 2016, but forecasts have now been reduced to single digit levels.
Many of the recent news stories on the topic point to market saturation, particularly in regions like the US, Western Europe, and China, where smartphones have become ubiquitous. But the problem is actually much deeper—people are starting to hold onto their phones longer, extending the lifetimes of the devices.
In a recent survey of over 3,000 consumers across five countries (US, UK, Germany, Brazil and China) conducted by TECHnalysis Research, consumers said they expected to replace their smartphones every 1.8 years. Now, on the surface, that seems fine, and probably in line with what people have done in the past. The problem is, in response to the same question about notebook PCs, people said they expected to replace those devices every 2.5 years.
In reality, however, notebook PC replacements occur closer to 5 years. In other words, people clearly aren’t good at estimating how long they plan to keep a device. To be fair, I don’t think smartphone replacement times will be double the 1.8-year lifecycle that they responded with, but I am certain they will be longer. And that is the crux of the challenge for the smartphone market.
As we saw first with PCs and then with tablets, once a market reaches the saturation point, then future growth becomes nearly completely dependent on refresh rate and lifecycle—how quickly (or not) you choose to upgrade what you have.
In the case of smartphones, there are a number of key developments that are triggering these longer lifetimes. Here in the US, the gradual disappearance of subsidies from the carriers has been a big factor, but in many other parts of the world there have never been subsidies and people have always had to pay full price for their smartphones. In those markets, and now in the US as well, the bigger issue has been a slowing down of major innovation as smartphones have matured and reached a level of quality and capability that satisfies most people’s needs.
To be clear, I’m not saying there isn’t any innovation going on in smartphones—there clearly is—but once people get a 5” or larger HD display, a good quality camera, lots of storage, speedy network connections, and access to millions of applications and services, most people think their phone is “good enough.” Larger displays, in particular, have been a key factor in reaching this point, and Apple, though they were late to the party, clearly benefited quite handsomely once they entered the larger phone market with the iPhone 6 and 6 Plus.
Moving forward, however, it’s going to be much harder to provide the kind of clearly better innovations that are going to make people feel the need to upgrade. In fact, that’s part of the reason I believe carriers, as well as companies like Apple, are creating and strongly pushing programs that enable you to upgrade on a regular basis. Many of these companies are concerned you won’t otherwise upgrade frequently (or at least at a rate that they would prefer). Interestingly, early reports on these upgrade programs suggest that a reasonable number of people are signing up for them, but crucially, not that many people have actually turned in their existing phones for new ones. Apparently, many people see these programs almost as a type of insurance that they can use if or when they choose to.
The problem isn’t just hardware, either. As people start to do more and more with their smartphones, the amount of information on those devices is increasingly tremendous. That, in turn, makes the actual upgrade process from your existing phone to a new one much more complicated than it used to be. Instead of just having to transfer over your names and numbers, you now have photos, music, videos, applications, settings, and much more.
Even if you use a number of cloud-based applications, you still have to deal with logging back into all of them, often with passwords that you’ve long since forgotten. Toss in the fact that you’ll likely be moving to a new version of an operating system that may or may not “like” the versions of the applications you use and could require a whole range of upgrades, and you are far from a friction-free process. It’s not as bad as upgrading to a new PC, but having lived through a smartphone upgrade process somewhat recently, it’s getting pretty close.
Despite these concerns, the smartphone market is impressively strong, with shipments in the range of 1.5 billion a year. But it seems clear we are entering a new era for the industry, and the implications of longer smartphone lifetimes are bound to be far-reaching for device makers, component suppliers, app developers, and more. How companies adjust to this new reality of limited growth will be very interesting to watch.
Here's a link to the original column: https://techpinions.com/the-smartphone-lifetime-challenge/42647
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