Have Smartphones hit a Plateau?

April 5, 2016

By Ernest Worthman

April 5, 2016 — Smartphones, seen as a key for carriers to lure new users onto their networks, may have reached a plateau phase of their lifecycle, according to one source. That is an interesting observation, backed by some solid evidence.

Smartphone sales are predicted to be 1.4 billion in 2016, up from 1.3 billion in 2015. That is an increase of only about one percent. Why that is significant is because this is the first time in years that smartphone sales haven’t seen in the double digit annual growth.

There are several possible reasons for that. One being that in the U.S. smartphone penetration is about 84 percent. That means the market is moving a replacement model versus a first purchase model. Second, today’s phones are so feature-laden, there is little new that prompts users to upgrade. And the features are advanced. High-rez cameras, long-life batteries, Internet, mail, messaging, streaming multimedia and millions of apps. Then there is Wi-Fi, Bluetooth, GPS and map functions and mobile payments apps.

What was once the driving point in these devices, screens, is reaching practicality. Bigger is better for high-def video, but that is offset by the practicality of the footprint. It seems that six inches is where the comfort zone for workable size hits the wall.

What’s left? Waterproofing is being sold as a new feature but is that really all that important? Do we need higher than 12-MP camera resolution? And with the limits of wireless bandwidth and limited sophistication of apps, are quad-core processors really warranted?

Perhaps this plateau is only temporary. If apps improve, bandwidth increases and speed moves up with 5G and resources like memory and processor speeds ratchet up, maybe there will be another rush to get to the next measureable improvement level.