There are times when predicting the future becomes painlessly easy because it’s already here. Peak iPhone? We’ve been here a few years already. Peak smartphone? Look around. Smartphone users are holding onto their devices longer, using them more, and are less likely to upgrade every year just because Apple or Samsung have a few new features dangled before our eyes.
All that glitters is not gold.
Last quarter Apple sold about the same number of iPhones as it did a year earlier and a year before that, but made more money because prices went up. Apple knows how to squeeze gross margins and prices from their sales, customers are loyal to a fault, and– all things considered– there really isn’t anything new under the sun.
iPhone X looks and feels and acts like a different iPhone 7 or iPhone 8, but at the $1,000 price barrier also has limited appeal to the customer base; hence Apple’s largest iPhone lineup to date; from iPhone 8 and 8 Plus down to the diminutive SE. Apple is hedging its bets.
What about Samsung? Check out this headline from Yonhap News Agency in Korea:
The first-day sales performance of Samsung Electronics Co.’s new flagship Galaxy S9 smartphones were around 70 percent of the previous series in South Korea… reflecting the market’s weaker-than-expected reaction.
What happened? iPhone was a revolutionary device and it took less than a decade for the smartphone revolution to take over most of the developed world. Despite Touch ID and Face IT and iris scanners and cameras that mimic mid-range DSLR’s with computational photography, we’re really sitting on peak smartphone.
There is nothing new under the sun– at least, nothing to excite the masses to dump last year’s models to stand in line for the latest and greatest. Remember those days?
Although Samsung has been declining to disclose preorder figures for the Galaxy S9 smartphones, industry watchers presumed that the performance would be roughly 70 to 80 percent of the Galaxy S8 series, pointing out that the new devices lack innovative features.
Even expectations are down. In retrospect, is appears as if Apple was smart because it introduced a revolutionary smartphone (for Apple; OLED display, Face ID, etc.) at a revolutionary price tag and expanded the product line down to less than $350 for an iPhone. Fewer phones sold, but more revenue and profits.
Samsung seems to have recognized the same trend toward meh.
Maintaining most of design from the Galaxy S8, the new smartphone features a rear camera with a variable aperture that can automatically or manually switch between F1.5 and F2.4. Users can also make optimized emojis based on their selfies.
Incremental, iterative improvements over previous models, but no Notch (it has become a design trend to copy; I know, go figure, right?), no decent facial recognition, but plenty of the same old same old.
Sure, a few billion inhabitants of planet earth do not have a smartphone but for those who can afford it, they do, they’re holding onto them longer because this year isn’t that much better than last year, and prices for the good models are going up, not down.
Peak smartphone is here and likely to be around awhile. Apple’s strategy of owning the premium end of the smartphone product spectrum looks pretty good.