New, improved
If the premiere mobile phones are the best they can be, how can manufacturers improve on them?
You don’t really need a new smartphone.
Sure, some of them squeeze more screen into a smaller form. The cameras keep getting better, if you look very close. And you had to live under a rock to miss the hoopla for Apple’s 10th-anniversary iPhone X or the Samsung Galaxy S8. Many in the smartphone business were sure this latest crop would bring a “super cycle” of upgrades.
But here’s the reality: More and more of Americans have decided we don’t need to upgrade every year. Or every other year. We’re no longer locked into two-year contracts and phones are way sturdier than they used to be. And the new stuff just isn’t that tantalizing even to me, a professional gadget guy.
Holding onto our phones is better for our budgets, not to mention the environment. This just means we — and phone makers — need to start thinking of them more like cars.
We may have reached peak smartphone. Global shipments slipped 0.1 percent in 2017 — the first ever decline, according to research firm IDC. In the U.S., smartphone shipments grew just 1.6 percent, the smallest increase ever.
Back in 2015, Americans replaced their phones after 23.6 months, on average, according to research firm Kantar Worldpanel. By the end of 2017, we were holding onto them for 25.3 months.
“Are smartphones across the board valuable longer to people? The answer is definitely yes,” Gartner analyst Brian Blau told me. “Are the devices sufficient to take care of people’s needs today? Pretty much.”
On Thursday, Apple reported its first-ever holiday quarter decline in unit sales of iPhones. It was just a dip, from 78.3 million to 77.3 million phones. These results could reflect Apple had one fewer week — 13 vs. 14 — this year to market its newest models. Regardless, Apple’s results communicated that the “super cycle” of phone upgrades isn’t exactly going super.
Apple CEO Tim Cook, in his call with stock analysts on Thursday, said Apple doesn’t “overly fixate” on how long people go between new smartphone purchases. “We’re thrilled with the reception of iPhone X,” he said.
One major driver of the change in our behavior is that phones now mostly look alike. “Consumers say, ‘I will buy when I see something new or hear something I need,’” said Ryan Reith, a vice president at IDC. Many of the biggest recent advancements, like augmented reality, have come largely through software. The iPhone X uses cameras in new ways to recognize its owner and environment — but it’s going to take time to see more interesting uses.
A longer phone life cycle is also a compliment to Apple and Samsung, even if some investors don’t love it. It’s a sign that their products are reliable and less susceptible to wear and tear. Adding water resistance to the iPhone 7 and Galaxy S7 helped a lot with that.