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Flat-lining smartphone sales, sliding tablet volumes, and lingering doubts about smartwatches begs the question: what is the next big thing?
In case the headline is not dramatic enough, let me start with this: the end is nigh! Time for the world’s biggest device makers to invest in that basement bunker, stock up on tinned food and binge-watch Bear Grylls for those all-important survival tips.
The reason being, predictions earlier this year about single-digit smartphone volume growth may have been a little optimistic.
IDC this week announced that global smartphone shipments in the three months to 31 March came in at 334.9 million, only slightly above the 334.3 million shipped in the same period a year earlier.
Even louder alarm bells were sounded by Strategy Analytics, which claimed that its figure of 334.6 million smartphone shipments represented a 3% year-on-year decline on Q1 2015.
Both research firms attributed the figures to China’s maturing smartphone market, where growth in low-cost device shipments has not been rapid enough to offset the slowdown at the high end.
"It is the first time ever since the modern smartphone market began in 1996 that global shipments have shrunk on an annualised basis," said Strategy Analytics director Linda Sui.
Smartphones have come a long way in the last 20 years, with Apple’s slick, easy-to-use iPhone kick-starting mass-market uptake in 2007.
Inevitably, the excitement about flagship device launches, even iPhones, has waned somewhat as the list of bells and whistles that can be packed into a new smartphone every year starts to look a little samey.
This was exemplified by Apple’s results this week, which showed that the iPhone 6S was unable to generate the same level of excitement as 2014’s iPhone 6, the first big-screen Apple smartphone.
"Despite the plethora of new features found on the newer ‘S’ models, current iPhone 6/6 Plus owners may feel that a 6S upgrade may not be warranted at the moment," proffered IDC on Wednesday.
"iPhone demand has normalised," said Radio Free Mobile founder Richard Windsor, in a research note this week.
He said there was a lot of pent up demand for the iPhone 6, but "this phenomenon is now over."
Indeed, so spoiled are we, that the checklist for a flagship launch has become if anything fairly mundane in recent years: feature-packed camera; higher-resolution screen; longer battery life; possibly wireless charging; and a choice of colours and memory sizes.
For device makers at the premium end of the market, attempts at innovation have resulted in gimmicks.
Apple’s Siri seems clever, but other than trying to get it to say something funny, I very rarely happen upon people trying to get anything useful out of it. Admittedly, Apple’s 3D touch interface is a good idea, but it requires a bit of training.
Samsung has made a very slightly curved screen for its flagship Galaxy smartphones, which glows different colours depending who is calling. Haven’t seen many jaws hit the floor over that one…
LG thinks modular accessories are the way to go, because when I spend hundreds of pounds on a phone, the thing I most want to do next is spend hundreds of pounds on a camera grip, a speaker, a 360-degree camera, and a spherical robot, all of which will end up in the bottom of a cupboard next to my Game Boy Camera and Game Boy Printer the minute my next smartphone happens not to be an LG.
Virtual reality headset accessories are now available for select Samsung and LG devices. As an enthusiastic PC gamer, VR excites me, and I think that offering a VR experience might be sufficient to attract some buyers, but on a mass scale? I’m not so sure.
Tablets were supposed to be the next big thing – literally, thanks to their larger screens – but that hasn’t turned out to be the case.
According to IDC figures released this week, global tablet shipments in the first quarter were 39.6 million, down from 46.4 million a year ago.
IDC said the performance was down to seasonality "combined with an overall disinterested customer base."
Ouch.
Meanwhile, the wearables segment is picking up momentum, but is by no means a panacea.
IDC predicts annual global wearable device shipments will increase to 237.1 million by 2020, from 110 million in 2016.
Major smartphone OEMs are trying to capitalise on this opportunity, but that has put them into competition with a whole host of new rivals, from established fitness tracker makers like Fitbit and Jawbone, to the traditional watch sector, which has cottoned on to embedding connectivity into new models.
"Although smartwatches like the Apple Watch or Android Wear devices capture the spotlight, they will only account for a quarter of all wearables in 2016 and will grow to about a third by 2020," predicted Jitesh Ubrani, senior research analyst for IDC mobile device trackers.
"It’s time to start thinking about smarter watches – traditional watches with some sort of fitness or sleep tracking but are unable to run apps – built by classic watch makers. These devices have the potential of making the technology invisible while still integrating themselves within day-to-day activities," he said.
With smartphone growth flat-lining, tablet shipments falling, and an uncertain future in the wearables market, device makers are heading for an existential crisis.
Ironically, two of the industry’s high-profile strugglers – BlackBerry and HTC – are arguably ahead of the curve in this respect; as their market shares have shrivelled, they have already had to reassess their situation and forge a new path to growth.
For BlackBerry, that means enterprise mobility management and secure communications, and for HTC, it means gadgets and VR. Whether this actually yields success remains to be seen, of course.
Ultimately, mature-market consumers are not about to stop upgrading their smartphones. However, with form factor innovation plateauing, the clamour to upgrade every year may already be on the wane.
It is up to device makers to bring fresh excitement to what is at risk of becoming a stagnant market.
