Smartphones, Wearables and Tablet sales have all slowed. Is this the end?
Do component vendors? Display firms? enabling technology vendors, device manufacturers, operators and investors just have to wait for the next big thing? Or is there an alternative path?
There are some big hype cycle items out there of course: IoT (aka Internet of Threats) but irrational exuberance is definitely in play with many analyst firms projecting IoT to be bigger than the entire current IT spend globally. A reality pill is definitely needed when it comes to how much new spend on hardware, software and services will be generated versus reallocation or reclassification of current spend. Beyond IoT which month by month reminds me more and more of the Y2K bubble, what else is there to get excited about?
Is there a new 1B unit, $100B annual device market out there somewhere? Maybe but so far it is very difficult to see anything even remotely approaching the scale, revenue and critical impact of the global smartphone market.
What about Wearables?
Well they are off to a good start but sales have temporarily stalled as real value added use cases have yet to emerge and incremental technology improvements fail to inspire beyond the early adopter segments. The consumer market is in the phase where large numbers of wearables have already been condemned to a top drawer (in the kitchen for me). New innovation in use cases, improvements in marketing and demand creation are urgently needed. The business market has barely been touched in the stampede to consumer fitness bands and smartwatches with little real long term value.
So if not wearables, what about a resurgence in tablets, 2N1 computers?
Nope, we are caught in a downward spiral as first wave needs are met, replacement cycles are long and there is simply no compelling need for the vast majority of non-buyers. Is there a technology wave about to ride to the rescue and create new demand? We dont see it!
What about a new wave in smartphones fuelled by AI or natural language interfaces (any one of 5-6 strong voice assistant type products) or at the risk of inspiring loud belly laughs 5G technology? Nope! The reality is that participants across the smart devices value chain and ecosystem must embrace the harsh reality that technology differentiation will in almost all cases fail to reignite growth.
Oh and it is not just device vendors or their suppliers that must accept that the status quo will not be broken by technology. The same applies to network and servic providers as well as content players.
The obsessions with the Product element of the 4Ps created a myopic vision and inevitable disappointment.
Very, very few products are revolutionary, enable brand new experiences or activities. The reality is the vast majority of product side innovation at best makes things easier, more efficient, more productive but generally do not inspire a huge upward swing in penetration or sales or installed base.
10 Years after the iPhone, we are again mired in a deep deep pool of me too products from 100s of vendors resulting in a race to the bottom in terms of ASP and profits.
What can change the trajectory? Well almost certainly not technology as the history of the electronics industry tells us that tecnology based differentiation is fleeting at best.
To reignite growth, shorten replacement cycles, inspire brand churn and motivate additional spend across devices, service providers, content owners, a return to customer centric planning and a focus on use case development for specific segments is required. How?
Join Strategy Analytics in Barcelona at Mobile World Congress Feb 27-March 2. Or if you are not attending join our webinar Post MWC Wrap up on Monday March 6th.