• 07.18.13

The Smartphone Market Is Growing Up–But Don’t Panic

If you believe the Wall Street Journal, the magic has gone from the smartphone market. We think there’s plenty of life left in it still.

The Smartphone Market Is Growing Up–But Don’t Panic

According to the Wall Street Journal, “Smartphone Upgrades Slow as ‘Wow’ Factor Fades.” The statistics behind this headline come from UBS, which has reported that while in 2008 around 20% more U.S. smartphone owners with major carriers were planning an upgrade than in 2007, in 2013 this trend has reversed: About 2% fewer people plan on upgrading this year versus the figure for 2012. The Wall Street Journal all but insinuates that this is terrible, terrible news, and that the future for smartphones is gloomy. No “wow” factor, eh? Awful.


Except this is absolute nonsense, and probably a misunderstanding of the market. Sure, the smartphone revolution has–in its current paradigm–grown past the explosive, exciting stages of its youth. Smartphones are no longer new, and your gran may even have one because they’ve penetrated so far and so quickly through the different sectors of society.

But to say this is a lack of “wow” ignores the fact that the market has changed. Phones have gotten better and companies like Apple and Samsung are now releasing software more frequently that adds radical new functions to existing phones. With the upcoming release of iOS7 for example, phones from 2011’s iPhone 4 upward will be compatible and may even gain new features. Why, many consumers will argue, do I need to buy new hardware if my recent, expensive purchase still works?

The smartphone market is also about much more than the plain hardware: Smartphone app markets are a global billion-dollar phenomenon, and are growing and adapting all the time. Recent data from Flurry shows that these markets are also maturing–90% of iOS apps are free, up from about 80-84% during 2010 to 2012. That’s actually not much of a shift, and it may reflect that the iPhone is appealing to lower-income markets as well as its traditional higher-end ones (paralleling the Android app store’s long-standing bias toward free apps). And old apps tend to hang around on the app stores, often free versus their original paid-for status, to drive a tiny dribble of income via embedded ads and perhaps to extend app branding a little. Why not leave them there, as it doesn’t cost developers anything to do so? And I don’t think anyone would suggest that apps per se have gotten dumber, or less powerful or less exciting today than yesterday.

I’d argue that the “wow” factor for smartphones hasn’t gone anywhere. It’s just matured a little and shifted. The excitement really isn’t about the hardware so much now (the current paradigm has all phones as black, glossy slabs anyway), although there’s always going to be the frisson of owning something cutting edge.

Instead the excitement in smartphones is more about what you can do with them. Look at the rise of companion wearable devices, which give amazing new power to phones. Look at the arrival of personal assistant apps like Siri. Look at the dramatic explosion of social photography, which relies not on cutting edge photo gear, but instead has many users digitally corrupting their photos to look like they were taken in 1974 on wet film.

As a developer you should be excited by the news that the smartphone market has matured, not made to feel nervous. It means your audience understands the app world better, and is actively looking for the next app that adds a new “wow” factor to their much-loved device. Something new. Something unexpected, clever. That’s actually a great challenge.

[Image: Flickr user Sara Thompson]

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