The end of the smartphone – Google’s idea

By February 18, 2011Uncategorized

This morning I went to a breakfast briefing given by corporate finance and research house GP Bullhound to share their ten predictions for 2011.

Their predictions are:

  1. Google’s Android outdistancing Apple’s iOS
  2. Mobile payments to surge in 2011
  3. Social shopping, dating and gambling thrive on mobile
  4. Augmented reality apps take off
  5. Mobile and smart grid applications open the digital home
  6. Privacy becomes a top priority for social network users
  7. Thin film makes a come back
  8. Short messaging format will gain wider support and momentum
  9. Gaming moves to the cloud
  10. A new generation of consumer business intelligence and data analytics apps will emerge

Overall I think this is a pretty good list (and it was very amusingly presented by Per Roman and his colleagues) – as you’d expect, I agree with some of them more than others.  I remain unconvinced that people really care enough about privacy for it to become a ‘top priority’, but I am with GP Bullhound on the business intelligence/analytics opportunity and particularly on the strength of Android – something I have now written about on three days out of five this week.

Per was in Barcelona this week for Mobile World Congress and he met with the Google Android folks.  Google’s belief is that within a couple of years all mobile phones will be smartphones – with touchscreens, good browsers, multi-media capability etc.  Free Android software and cheaper hardware will mean that nobody needs to make do with a low end feature phone anymore, at which point we should simply call them ‘phones’ because everyone has one and the prefix ‘smart’ is redundant.  Hence the end of the smartphone.

The general belief seems to be that in this scenario Apple will hold onto the top end of the market and will be just fine.  I’m not so sure about that.  Developers will start to produce their Android apps first and their iOS apps second given the greater number of potential customers on Android causing early adopters to switch.  Additionally the high end Android phones will come to match the iPhone over time, buoyed by structural advantage of a free operating system.

The news today that Apple is considering making a cheaper phone suggests they see this risk.

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  • I think this is right but incomplete. A big issue I saw in MWC was fragmentation, and the resilience of the attitudes behind the featurephone. Those $100 Android devices are made by Chinese ODMs who’ll do whatever the end customer whats – Mr Operator, you want a custom phone book and white label game store? No problem. You want Wifi locked to your own hotspot service? A custom UI? Video auto-routed through your traffic management system? No Problem!

    Just because that $100 device is running a new OS, that doesn’t mean the underlying industry motivations are new. Hence, so long as people want subsidised phones, things will remain messy.

  • I think the big thing with $100 devices is that there isn’t much to subsidise anymore. People will buying their own phones so they are free to switch operator and phone whenever they want.

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  • There are an awful lot of ‘free’ phones on the market that cost $100 wholesale today. I doubt that will change. Or if it does, it will be because of a much more general drawing away from subsidies by the operators, and it will need more than this to drive that.