Photo courtesy Rodion Kutsaiev Unsplash

Smartphone Industry is ripe for Disruption

Smartphones were a game changer, making internet access on the go possible while doing the basic function of making calls and texts. It unlcoked an entire ecosystem of businesses that were eager to deliver value to customers. On their part, customers brought the appetite and lapped it all up. That was the proverbial honeymoon phase.

For a period of time, smartphones continued to improve in function and form along vectors that were necessary for usability and adoption of the technology itself. Then came a point when phones were good enough. This is also when internet penetration was increasing at a never before known pace in two of the world’s largest markets, India and China and demand was growing at a rapid pace. The alchemical moment was here. This is when low cost, good enough, phones entered the market and made it possible for a vegetable vendor to own a smartphone. All great progress with meaningful impact on large populations around the world.

In this moment of 'good enough' emerged a new performance variable for the smartphone industry- the camera.Smartphone ads didn’t mention the phone instead showed the pictures it could take. This happened roughly half a decade ago , since then smartphones have marginally improved along form rather than function building on and improving use cases that fewer and fewer people care about. What do I mean by that?

We cared about camera(as an example) improvements for a while. Only a few of us still do. Framing this in the context of cost paints a picture. Flagship models of top brands cost as much as a tablet or a laptop, but have less than half the shelf life.

In other words, (still) improving the camera, the display,the processing power or the screen size is great for a small subset of customers who largely reside within the gaming community. The rest of us who need a device that could reliably get us on the internet, take nice enough pictures, make an occasional video and of course make calls and send texts, we couldn’t care less if we bought an AMOLED display, an A1 chip or a lesser variant of it. Given a choice ,we’d prefer to stick with our "old" perfectly functioning phone. Alas! The choice is made for us and we haven’t even discussed the dubious or in some cases outright illegal practices to force upgrades. ( I’ll refrain from opening that can of worms).

Noteworthy though, is the poorly recognised fact (by the industry) that it is limited by availability of natural resources. Driving over-consumption is environmentally unsustainable. The (non-renewable natural) resources being used to keep the gravy train running may be used to meaningfully advance quality of life outcomes unlocked by the next 10x innovation that will require the same resources to get built.

In conclusion, the smartphone industry is in what I call the 'glutton phase’. What do I mean by that? It has become self-indulgent, largely oblivious to the market signals. It is creating “better" products adding to the performance surplus,not realising that the upgrades it’s offering are no longer meaningful to majority if not all customers and they’ve soured the customer experience by forcing them to throwaway perfectly functioning phones because of poor support cycles.

The seed of disruption is self-contained in the current state-of-play (as it always is) and unless something changes, an innovative startup with a minimalist, environment friendly approach will create a product that - packs a punch in both form and function, has 4-6 year support cycle, doesn’t cost an arm and a leg and delivers progressively greater value through software upgrades (kinda like a Tesla).

We don’t have to force compulsive consumption to grow, but we must innovate compulsively to stay relevant.

To end on a hopeful note, I’ll say this — delivering customer delight (to tired customers) is relatively easy in this moment !