Apple has reported slowing sales of the iPhone, sales of the iPad have been falling for some time now, and Samsung and other phone and tablet manufacturers are struggling. Why? What is the reason and what does the future hold?
All phone and tablet manufacturers are finding it difficult to sell their latest gadgets and the public seems to have lost interest in them.
Samsung has just launched the Galaxy S7 and it looks brilliant, but it probably won’t sell that well. Apple is launching iPhones this year, as it does every year, but expects sales growth to be much lower than in previous years.
There are often articles reporting that the tablet is dead and that few people are interested these days. It is plain to see in the sales figures they say. Sales figures and usage are two different things and the problem is not that people are not using their tablets, it is that they are keeping them longer and are not replacing them as often.
The same is true of phones too. In the past we would exchange our nearly-new barely-a-year-old phones for the latest model on an annual basis, but now we are keeping them longer and swapping them less frequently.
The reason is easy to see when you consider innovation against time. Here is a simple chart that shows these two factors.
When a new product comes out, such as the launch of the iPad in 2010, which kick-started the tablet market, or the iPhone, which was one of the first smartphones back in 2007, innovation is rapid. Back then we were at the beginning of the curve where it is the steepest.
The initial part of the innovation-time chart is a rapid climb indeed and this indicates the speed at which innovations come. Phones had a 2MP camera, then a 4MP camera, then 8MP camera and so on. There was 2G, 3G, 4G connections in rapid succession and phones got much faster data connections.
Tablets gained a front camera, a back camera, became thinner, lighter, faster, screen resolutions increased year on year, and so on.
As time progresses, the innovations become smaller and we are near the top of the innovation curve where it is beginning to flatten out.
There are fewer differences between successive models and each of the differences are smaller. When phone cameras were 2MP and jumped to 4MP they doubled in resolution and were 100% better. They were twice as good. When an phone camera is 8MP, as in the iPhone 6, and is increased to 12MP, as in the iPhone 6s, it is just a 50% improvement. You might not notice the increased pixels when viewing photos on a small iPhone screen too. It shows how the pace of innovation slows.
We are currently near the top of the curve where each new phone and tablet is barely better than the previous one. What's more, it may come with features that you do not care about. Well, not enough to consider upgrading, given the high cost of doing so.
Your current phone and tablet is probably good enough. The Samsung Galaxy S7 has now been launched, but many Samsung Galaxy S6 owners will have had their phone for less than a year. What’s more, the S6 is a great phone and there is absolutely nothing wrong with it. It’s fine and it works well, so why change it for a few minor tweaks here and there.
The same is true of the iPhone and the 6s is better than the 6, but the differences are not that significant. It is likely that the iPhone 7, which will surely launch this September, will be very similar to the 6s. Will it be worth upgrading? Probably not if you have a 6s and the benefits are likely to be small with just a few tweaks here and there. And there is nothing wrong with an iPhone 6s. It is a great phone. It will still be a great phone when the iPhone 7 comes out.
Slowing innovation and phones and tablets that are good enough are the cause of the slowing sales. It means tough times for phone and tablet manufacturers in the months or years to come.
At some point in the future something brand new will probably come along and a new innovation-time curve will begin, like when dumb phones became smartphones. No-one knows what the next big thing will be though.