Smartphone innovation stalls, as price beats tech
by Daniel Thomas,
2016-01-05 06:23:38.0
SMARTPHONE makers are facing something akin to a mid-life crisis. The excitement of the early days when people were clamouring for the latest technological marvel is long gone.
Almost everyone has a phone in their pocket and, to a great extent, these devices look and act the same.
Companies such as Samsung, Sony and HTC are struggling to maintain the pace of innovation and are finding sustainable profits difficult in a market that is increasingly focused on low prices rather than high technology.
Analysts agree these groups need to find a way to inject excitement back into the market — and not simply by relying on big-buck marketing campaigns and celebrity endorsements.
But true innovation has stalled in the past two years, according to executives at mobile groups who complain about the lack of differentiation on offer to customers.
Telecommunications executives fear there will be more of the same this year, with little in the plans outlined in confidence by handset makers so far suggesting much will change.
One telecoms executive, who did not wish to be named given her company’s links to the smartphone makers, predicts there will be mostly incremental improvements. Phones will be updated with sharper screens, faster processing and more precise cameras, she says. But they are largely the same shape and broadly the same size.
"The main trend this year will be how the phone looks and feels, as well as with improvements to the battery life and camera," she says, pointing to devices featuring dual cameras to provide greater depth to photos.
Instead, consumers can expect to get better deals on more expensive devices, with Chinese smartphone makers such as Huawei expected to continue to grow market share with phones offering the same sort of features as those from Apple and Samsung, but at a lower price.
Chinese manufacturers are "making handsets a commodity, with high specifications at an affordable price", says one telecoms executive.
However, the most excitement will come from the titans of the industry — Apple and Samsung — who will continue to slug it out with the most high-profile launches of the year.
Apple will almost certainly launch an iPhone 7 this year while Samsung will find room for the Galaxy S7, most likely in February at the Mobile World Congress in Barcelona, Spain.
Both manufacturers are said to be developing pressure-sensitive screens, so the strength of a user’s touch can let loose a range of added menus.
LG, Huawei and HTC are also expected to unveil new handsets. Sony, whose future in the market has been questioned given sluggish sales, is predicted to fight on with the Xperia Z6, while Google will continue to update its Nexus range.
However, there is always the chance of a surprise. CCS Insight predicts at least one manufacturer will offer a "radical new smartphone design using free-form (non-rectangular) display technology in 2016".
CCS says that mobile phones have been constrained by the need for a rectangular display, but that free-form display technology from suppliers such as Sharp will break this mould.
Other innovations will emerge in connected wearable devices, according to telecoms executives, even if some question whether there is consumer demand for more smartwatches.
CCS says that the most popular wearables will have a fitness theme, such as the Fitbit band.
© Financial Times 2015
Chinese smartphone makers such as Huawei expect to continue to grow market share with their low-cast, hi-tech offerings. Picture: BLOOMBERG
SMARTPHONE makers are facing something akin to a mid-life crisis. The excitement of the early days when people were clamouring for the latest technological marvel is long gone.
Almost everyone has a phone in their pocket and, to a great extent, these devices look and act the same.
Companies such as Samsung, Sony and HTC are struggling to maintain the pace of innovation and are finding sustainable profits difficult in a market that is increasingly focused on low prices rather than high technology.
Analysts agree these groups need to find a way to inject excitement back into the market — and not simply by relying on big-buck marketing campaigns and celebrity endorsements.
But true innovation has stalled in the past two years, according to executives at mobile groups who complain about the lack of differentiation on offer to customers.
Telecommunications executives fear there will be more of the same this year, with little in the plans outlined in confidence by handset makers so far suggesting much will change.
One telecoms executive, who did not wish to be named given her company’s links to the smartphone makers, predicts there will be mostly incremental improvements. Phones will be updated with sharper screens, faster processing and more precise cameras, she says. But they are largely the same shape and broadly the same size.
"The main trend this year will be how the phone looks and feels, as well as with improvements to the battery life and camera," she says, pointing to devices featuring dual cameras to provide greater depth to photos.
Instead, consumers can expect to get better deals on more expensive devices, with Chinese smartphone makers such as Huawei expected to continue to grow market share with phones offering the same sort of features as those from Apple and Samsung, but at a lower price.
Chinese manufacturers are "making handsets a commodity, with high specifications at an affordable price", says one telecoms executive.
However, the most excitement will come from the titans of the industry — Apple and Samsung — who will continue to slug it out with the most high-profile launches of the year.
Apple will almost certainly launch an iPhone 7 this year while Samsung will find room for the Galaxy S7, most likely in February at the Mobile World Congress in Barcelona, Spain.
Both manufacturers are said to be developing pressure-sensitive screens, so the strength of a user’s touch can let loose a range of added menus.
LG, Huawei and HTC are also expected to unveil new handsets. Sony, whose future in the market has been questioned given sluggish sales, is predicted to fight on with the Xperia Z6, while Google will continue to update its Nexus range.
However, there is always the chance of a surprise. CCS Insight predicts at least one manufacturer will offer a "radical new smartphone design using free-form (non-rectangular) display technology in 2016".
CCS says that mobile phones have been constrained by the need for a rectangular display, but that free-form display technology from suppliers such as Sharp will break this mould.
Other innovations will emerge in connected wearable devices, according to telecoms executives, even if some question whether there is consumer demand for more smartwatches.
CCS says that the most popular wearables will have a fitness theme, such as the Fitbit band.
© Financial Times 2015
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