Smartphones. 10 years later.

Deciding to buy a phone is a hassle these days. Either they are all good in your budget category or they are all lacking something you want. Deciding on a phone plan is even worse. So many carriers with so many different plans and they all just as bad as each other. Then you pay for different streaming services and choosing one of them is ever so confusing. Services such as Spotify, Apple Music, Pandora, Gaana and many locals have been there for a while. Paying for all of them at once is not affordable and picking one of them brings you back to square one.

The smartphones (arguably) started becoming popular 10 years ago with the introduction of the iPhone. Ever since then, searching for a phone has become a daunting task since each budget category offers a set of features and there are hundreds of smartphone sellers trying to compete in that category. Same is the case with carriers these days. There are those top 4 carriers in America (AT&T, T-Mobile, Verizon and Sprint) and although they are trying to create simpler phone plans, they have different options at different times for each device offered. Not to mention the fact that you end up paying ridiculous costs for phones each month.

We had never imagined 10 years ago, that we would be able to order a cab wherever we are standing within a couple of minutes by simply tapping on your phone. The same device can also do things like stream TV, music, order pizza, navigate, record health activities, and what not. So what will the future of these devices look like? The idea is to realize what these devices will change rather than what they might be capable of doing.

First of all I believe that the carrier race will become a lot simpler and it will happen sooner than later. With Wi-Fi and LTE becoming available very easily, I think carriers will simply drop the calling and texting and move to VoLTE. VoLTE stands for Voice over LTE (or think of it as 4G-calling). VoLTE uses data to transmit voice signals and then at the backbone it’s simply a matter of exchanging data. Think of it as something like WhatsApp calling, just that it happens over the cellular network. VoLTE along with VoIP (Voice over Internet Protocol) will make the backbone circuit-switched networks obsolete for good. And since data will become a lot cheaper over the years, calling and texting will essentially cost nothing. That will be the only way the carriers can convince you to get a network. Today, a simple unlimited calling and texting-only plan from the top 4 carriers’ costs 30$. ‘You could get a smartphone in that, which can do VoIP for free over Wi-Fi’. Data will become cheap and a lot more easily available 10 years down the road to make that last sentence sound perfectly fine. Unlike today where high-speed data is not always easily available to successfully make a call over the internet or even more importantly, receive a call whenever needed. The networks will cover a lot more land and give better connections indoors and will also become more reliable with newer technologies. Simply put, in order to stay in the race and not become redundant, the networks will have to become better and cheaper. And this is good for consumers.

Now on the smartphone side, I don’t think anything radical will change in the next 10 years. Not because smartphone innovation is slowing down, but because smartphone innovation I believe has been purposely slowed down for more sales and profits. Take the iPhone7 and the Galaxy S7 for example. 7 major generations later, both the phones are more or less the same thing, just better. The original iPhone interface is unchanged and iOS has gone through necessary changes in APIs and multitasking and other under the hood changes, which can be seen as something that were necessary to adapt to the changing tech-world rather than change the tech-world. The first smartphones did exactly that. They brought in something radical never-before seen concept to phones that changed everything. The truth about phones today is that this is not really necessary. The iPod changed how we listen to music. Today, the iPod concept is still the same in the iPhone and it need not be changed. Simply put the big players in the smartphone world don’t want to fix something that isn’t broke.

And this will go on until there is a downward trend in sales rather than a slowdown. There are 7billion people on the planet. Although they all cannot afford smartphones yet, the potential for market is huge. I have been hearing about smartphone saturation for a while. But if you consider a country like the U.S, it’s easy to understand how it can have a saturated market with customers unwilling to upgrade assuming something compelling is not offered every year. This will not be the case though. A person cannot simply stick to an iPhone6 after Apple releases the iPhone8 or 8s or whatever Apple decides to call their next 2 phones. Same is the case with Android phones. By that time his phone will have become obsolete and he will be forced to upgrade simply due to the fact that newer phones perform better and are capable of doing more. But considering countries like India and China accounting to almost 30% of the total world population, it is not something that is saturated by high end phones. And that leaves a big market potential for the big players. The only challenge is to convince the customers to buy these devices at a reasonable price. The customers simply want to buy a cheap device. Although a small market will remain untapped by these big players the next 10 years will be about capturing each other’s markets rather than capturing the untapped market. For example the Pixel is about capturing the market from Apple and Samsung rather than capturing the untapped market.

And this will be where the carriers come in. The carriers today are simply not relevant as much as they were when the first smartphones had launched. You can get an unlocked phone on an installment plan and then use any carrier and plan you find suitable. In the next 10 years the big smartphone players will do something about this. Today people don’t want to be tied to a carrier. Soon I believe customers won’t be tied to their phone either. I think carriers coupled with the phone sellers, especially Apple, will come up with a different strategy. They will bundle a service along with the phone itself for an installment where the customer need not worry about the plan and usages. Each year (or whenever a new phone is out) a person will simply turn in his old phone and take home a new one with nothing changed in his monthly bill. No need to worry about data, upgrade fees, device cost, locking or unlocking. While today a similar approach is being tried, and tested by the carriers I think this is leading to more confusion. The smartphone sellers must take control of this again as they had done when the phones had first launched.

Imagine this example, you pay 79$ a month and every year get a new phone for nothing more with unlimited data, calling and unlimited data with unlimited streaming of Apple Music and TV. If you think this is a lot, drop the streaming and pay just 69$ per month. Today, the carriers offer a similar plan. But bundling of services and then selecting what you want and don’t want becomes a hassle. And why wouldn’t you simply swap for a new phone each year for paying nothing extra? It’s not only a lot simpler for the device owner but also for both the carrier and the seller. And this will happen eventually. The total each month comes out to be the same but it takes out the confusion from everything. And, guarantees the customer upgrades each year and sticks to the device manufacturer.

For example, at 79$ per month in a year you end up paying 948$ in a year. On an installment plan you are paying 27$ for the phone each month (for a 649$ phone) plus another 40$ for unlimited data on the big 4 (not exactly but for 4 lines that comes out to 40$ if you are lucky), another 20$ line access charge and another at least 10$ for a streaming service. And then there are 4 carriers with different sets of devices and different offers. It becomes a lot more confusing and the costs only add up. With a manufacturer taking the burden of this, the only question of sticking to a carrier would be the quality of their network or something unique each carrier can offer (like network speeds or coverage in a particular area).

If you are expecting the next wave of smartphones will have features like virtual reality and what not, you are not wrong. Smartphone manufacturers are already trying different approaches to innovation in the industry but the problem is the larger bunch is not the one buying these. It’s more of a niche market for the ones selling these. Most buyers prefer to stick to the big players and this is where it gets interesting. Instead of innovating in the technology, the next 10 years will be about selling phones bundled with simpler, cheaper and better networks. Of course, I could be completely wrong here and the Apple could surprise us with an iPhone8 feature where it converts to a flying car and takes us to the moon.

To sum it up, until now, the smartphone manufacturers had to make a bold statement to convince a customer to buy their phone. Now the customers are already aware of what features they want and which manufacturer they want to stick to. What remains is the network and costs which can attract customers. And to change this, the manufacturers need to come up with a lot more convincing strategy if they want someone to switch to their phones.

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Author: Chinmay Thosar

Personal blog. Mostly tech stuff.

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