The year is 2023, and let’s be honest, it’s hard to avoid owning a smartphone.
They’re a core part of how we work and interact every day.
But the psychology around buying one has changed.
Over the years, cell phones have come in many shapes and sizes,
and you’d get excited about major shifts in the design or a new feature.
But today, smartphone upgrades are more incremental and tend to focus
on bigger and brighter screens or improvements to the camera.
Here, at the world's largest mobile industry trade show, Mobile World Congress,
you can't help but shake the feeling that the smartphone makers have run out of ideas.
There are plenty of new models with better cameras and faster processors,
and a lot of screens that fold in half.
Do you still get excited about the sort of new phones?
I do, I guess not as much as couple of years ago.
It’s not exciting, nobody cares about- I mean nobody,
I don’t care about the new thing that comes out.
I think it’s kind of plateaued recently, because there’s only so much, so far you can get.
I’m not that excited. Like, I used to be like, I don’t know,
back 10 years ago when they released, when they had something to upgrade.
There were more things that were different or that were new,
and now it seems like it's smaller things.
So, is the smartphone industry in an innovation slowdown and, if so,
what does that mean for the future of these computers in our pockets?
I think the iPhone may really change the whole phone industry and, I think,
give us something that’s vastly more powerful.
In 2007, Apple co-founder Steve Jobs unveiled the iPhone.
A thing of curiosity at the time,
it was the first example of a mainstream device that mixed the communication capabilities
of a mobile phone with the ability to connect to the internet.
In other words, a smartphone.
Steve Jobs walked onto the stage, pulled the iPhone out
of his pocket and essentially delivered the dominant design for the smartphone.
It really has made the smartphone the most ubiquitous and most invaluable
device in people's products, and it has subsumed whole categories of product.
Today, what began life as a novel concept has now become widespread in society.
People use their smartphones for everything, from navigating unexplored places to taking
professional photographs to launching entire careers on social media.
The idea that someday, your phone will become a camera and an encyclopedia,
that never entered our minds.
In 1973, long before the smartphone arrived,
American engineer Marty Cooper made the first call from a handheld wireless device.
He says he couldn’t have imagined them becoming the portable computers they are today.
But he had a feeling they’d be popular.
We just knew that someday everybody would have a mobile phone. And it's almost happened now.
There are now more than 4 billion people using a smartphone globally.
In 2024, that figure is expected to surpass 5 billion for the first time.
Smartphone makers constantly work to churn out new devices every year. In 2022, Apple launched
its flagship iPhone 14 range, while Samsung in February 2023 unveiled its new Galaxy S23 lineup.
Both phones retained roughly the same size and design as their predecessors,
with the main improvements being better cameras, enhanced chipsets, and longer battery life.
We now live in this kind of sea of smartphone sameness.
I think we have moved to a point now with mobile phones where people
aren't kind of rushing out saying, I really want to get that new phone.
In many cases, it's almost a distress purchase.
So, you don't wake up in the morning and think I'd love a new washing machine, which has got,
you know, X cycles and does this thing with the water and everything else.
For smartphones now, it's my belief that if something happens to your phone,
it gets stolen, it breaks, people will go out and buy a new phone.
Why has smartphone innovation stalled, though? You know,
we've seen these incremental launches where you get better cameras, better processors.
But it just seems like there's something holding companies
back from launching something entirely new
We are struggling with innovation, because we've been on such a long journey.
The mobile phone industry is alive and well.
But I think on the phone side, everything's got so good. So, the cameras are fantastic.
The overall performance is fantastic, battery life has improved.
So, all the boxes that we used to tick to get people to upgrade have gone.
There’s the question of whether smartphone makers
need to wow consumers with flashy new features and specs anymore.
Manufacturers are increasingly building handsets which are designed to last for longer,
with many firms pledging to guarantee software upgrades for several years.
People now opt to hold their phones for much longer,
and the rising cost of living has made buying a new handset a rarer event for many consumers.
Smartphone shipments plunged 18.3% year-over-year to 300.3 million
units in the fourth quarter of 2022, usually a big holiday shopping period,
marking the largest-ever decline in a single quarter.
Rather than purchasing a new phone outright, many shoppers
are now offsetting the cost of upgrading by handing in their old device instead.
According to a report from insurance firm Assurant, American consumers hold onto their
iPhones for an average of roughly three and a half years before trading them in.
If you look at what's happening globally,
but particularly in markets like U.S., Western Europe and Canada and Japan,
carriers, retailers and OEMs have been putting incentives forward to trade in your old phones.
Despite that, we've been seeing that upgrade cycles creeping up a little bit longer.
This year, phones with folding displays are one
bright spot of innovation in mobile that has industry insiders excited,
with smartphone makers Samsung, Honor and Oppo all showing off foldable phones.
These phones were all the rage four years ago when they launched for the first time.
Since then, they’ve barely made a dent. In 2022, just 1.1% of the smartphones sold
globally were foldables, and this share is expected to increase to just 2.8% in 2026.
We don't really know what the dominant form factor is going to be.
And we also don't know how big that market opportunity is.
Foldables is still a niche, we're talking
about a few 10s of millions of devices potentially this year.
That's nothing compared to the, you know, billion plus smartphones that will be sold.
The elephant in the room is what are Apple going to do.
Personally, I think that Apple have had flexible
display technology in their labs for more than a decade.
They will be all over this technology.
But I don't see any real reason why they need to risk moving into
delivering a foldable iPhone right now because I think it's too risky for them.
When I look at smartphones today, I often think to myself, is there anything more companies can do?
The phone today has kind of reached the limit of what’s possible,
but maybe that’s not such a bad thing?
The phone has become a central hub for plenty of different connected devices.
Your watch, your TV, your thermostat,
even your doorbell, can connect to your smartphone over the internet.
In the future, this integration is expected to become more significant as time goes on.
Two thirds of the people on earth have personal mobile phones,
and the phone is becoming an extension of the person.
The next generation will have the phone, maybe embedded under the skin near their ear.
But there’s still a great deal of unfinished business for the
smartphone industry. Smartphone adoption still lags in many developing markets.
The U.S. is among the most advanced countries in
terms of smartphone adoption, with 74% of the population using one.
By contrast, in China, 64% are smartphone users.
In India, smartphone penetration is even lower,
with 46% of the country’s 1.42 billion people holding smartphones.
I think consumers will continue to have that adoption.
And in countries like India and China and places like that, this is more than just
a fancy device because the smartphone is a way to get paid. It's a way to do financial transactions.
The challenge of society as a whole, the manufacturer, or the service provider,
is to recognize that and recognize they have an obligation to serve all people.