The slowdown was unavoidable, of course. Nothing stays hot forever, especially in this industry. By technology standards, smartphones have been on a roll, but in recent years device makers have been looking for the magic bullet to help turn sales around. The advent of 5G was a welcome breather, but next-generation telecom standards don’t arrive every year.
It’s too early to say for sure whether the move towards device repair amid new and proposed legislation will have a significant impact, but it was a highlight at this year’s show, which HMD made a central thesis. Regardless of how many people take advantage of the ability to repair their devices at home (or have them repaired by a third party), it is another potential pain point for growth in the industry.
Nokia booth at MWC 2023. Image Credits: brian heater
Foldables have apparently lived up to a lot of hype (for Samsung specifically), but not enough to really move the needle. Phone manufacturers have an update problem. For a long time, phone purchases were inexorably tied to carrier plans, putting devices on a two- or three-year cycle. Of course, the types of financing arrangements that allow you to spend less up front have a way of making you pay at the end.
There seems to be a looming sense of carriers and manufacturers trying to get back to something similar under a new name.
“I think there’s going to be more movement towards models where the devices themselves are sold more as a service,” Google’s Sameer Samat told me this week. “I think there’s a lot of innovative work going on on the carrier side to figure out how to buy a device for less up front, use it and return it after a period of time, and get another device as part of your overall subscription. .”
Image Credits: brian heater
In a world where we don’t own our movies, music, or software, the concept of “hardware as a service” is quickly emerging as its own way forward. Just like switching from physical albums to Spotify, it has its pros and cons.
No doubt some consumers will jump at the chance to upgrade hardware on the spur of the moment, but isn’t having your phone the same as not having a CD or disc? Will these ultimately end up costing us a lot more in the end? And at a time when most manufacturers are touting percentages of recycled materials, how much more waste will this model generate?
There is also a feeling that phone makers have indeed backed into a corner. The yearly outperformance ultimately benefited consumers with much better devices. I’ve said this many times, but these days it’s hard to find a bad phone for over $500; there are also an increasing number of good ones for less than that. These days, a “budget” device often means settling for last year’s best chipset.
The best phones last longer, both in terms of durability and future-proofing feature set. Having a three or four year old phone these days doesn’t mean the same as it did three or four years ago. That is also due, in part, to the fact that innovation has slowed. It has become a battle for inches. When was the last time you saw a truly revolutionary update to last year’s model? Are moderately better displays, cameras, or even batteries forcing so many people to buy on impulse?
“The smartphone market initially grew because there was a really innovative product that was useful to customers,” Nothing’s Carl Pei told me in an interview this week. “Now it’s starting to shrink, because my phone is good enough. Why should I upgrade?
Image Credits: Natasha Lomas/TechCrunch
From a broader perspective, none of this is bad per se. It means better products for consumers, as well as a decrease in the massive waste generated by millions of people buying a new device every two years. We all tacitly understand why corporations and shareholders expect such cycles to go on forever, but many of us are glad they don’t. Businesses need one of two things to happen: reverse the slide or shift focus to other sources of revenue.
“There will always be sales of new phones,” says Samat. “But I think it’s now getting to the point where, for a lot of people, it’s their primary computing device. So there are different and more interesting ways to look at the market. I think in terms of what can you do with these devices? How is the commitment? What are the services you are using? And how does it integrate with other parts of your life?
The writing has been on the wall for a while. The slowdown predates the pandemic by some time, but the last three years have certainly accelerated the trend. Shutdowns, unemployment, inflation, supply chain restrictions – you know the deal. Forward-thinking companies invested heavily in content games. That certainly paid off for Apple and some of the competition as well. There were times when wearables and smart home devices seemed to help stem the bleeding, but while both have done well for manufacturers, there isn’t the same sense of ubiquity.
6G is nothing more than a series of different companies vying for adoption of their specific solution, so we’re looking at years before the first devices start arriving. At a conference that loves nothing more than touting a new technology, 5G’s potential replacement only justified a single panel.
Mike, who sat on the panel, notes:
The first thing to keep in mind is that it won’t be coming anytime soon. Projections are that people like you and I will only get 6G in our hot hands around 2030 onwards, so it might be best to calm your anger for now.
Does anyone else feel like it’s 50/50 between the 6G and Mad Max scenario by 2030? It’s okay, maybe it’s just me. Still, that feels impossibly far away and doesn’t do much for any of these companies anytime soon.
Oppo’s Find N2 Flip at MWC 2023. Image Credits: brian heater
Perhaps the foldables have a lot more juice left? If the MWC is any indication, the manufacturers certainly believe it. It seemed like every company had one this year. Well, all except Nothing.
“Personally, I think foldables are supply chain-driven innovation and not consumer insights,” Pei said. “Someone invents OLED and can make a lot of money, because it’s a great technology. Then after a few years a lot more companies do that, so they need to lower their prices. So they need to figure out what else they can sell at a higher margin. They develop flexible OLEDs, which they can sell at a higher price.”
Image Credits: brian heater
It’s hard not to be cynical about these things sometimes. The same goes for concept gadgets, though, as I noted in my “Ode To Weird Tech” post, as someone who follows these things for a living, I’m a sucker for weirdness for weirdness’s sake, be it the roll-up screen of the Motorola Rizr or the OnePlus. shiny coolant fluid. To be sure, following the automotive industry’s lead in creating concept devices is a trend that is likely to only become more widespread.
OnePlus COO Kinder Liu told me this week that gauging consumer interest is one of the “multiple reasons” his company is committing to the concept. He added: “In addition, we want to encourage continuous innovation within our company.”
Just about everyone I interacted with this week echoed the sentiment that smartphones are stagnant. However, for the first time, it is not a foregone conclusion that there is a way out.
