Niranjan Gidwani is an independent Consultant Director and former CEO of Eros Group. He is also a board member at Society of Sustainability & Green Materials (SSGMUAE) and a member of the UAE Superbrands Council and HBR Advisory Council.
What is the device we spend the most time with? At times even more than with our loved ones. There is hardly anyone who cannot answer. It’s the smartphone. This device has become one of the key segments of the consumer electronics business, contributing in a major way to the entire value chain, and has become so central to our lives that it is almost like an extension of our body.
Almost everyone believes that the smartphone is something we will continue to carry with us, both literally and metaphorically, and although the smartphone market may never see the same meteoric rise that it did some years ago, the all-powerful pocket computer is surely here to stay. In fact, at this point it’s hard to function in society without one, and that is not going to change any time soon.
Form will evolve
While a small percentage of the world will get the newest high-end model, many will opt for the mid-to-high range products, and others will use the basic product until it falls apart. With that being said, one thing is certain. The form factor and specifications will really evolve. Right now, the world is comfortable with the candy bar design, and we can expect that to stick around for quite some time, but a significant portion of the market will become foldable.
Foldable phones can not only change the way content is consumed but can change to a different size to perform a specific task. When unfolded, they can go from being a small smartphone to a tablet type device. Smartphones and tablets could, therefore, merge and people are surely going to be looking to get more utility out of that one device as the smartphone market shifts.
Battery innovation
In addition to improved artificial intelligence and machine learning capabilities one key feature that is ripe for innovation is battery technology. Smartphones continue to get major upgrades to cameras and sensors, but interestingly, batteries have not changed much in years. Alternatives to lithium-ion batteries can allow for faster charging and longer battery life while some technologies even allow batteries not to lose capacity over time.
Imagine that a phone runs out of battery and there is no charger immediately available. That may not be a problem in a few years’ time, as it is expected that the next smart devices can be charged wirelessly over the air. There are also devices being planned which have the potential to be charged by solar power, something which will be a much-needed boost as the global order is shifting to more and faster data consumption and longer hours of usage on the device.
It will be interesting to see whether brands improve battery technology soon or continue the current strategy of selling newer models each year. The future holds exciting promise. And yet, for each of the last six years demand for new phones has been on the decline. China and North America have been the biggest drivers of negative growth, and more so this year. Global inflation and an uncertain environment are making consumers reluctant to make faster upgrades to their devices while the re-furbished and used phones are creating another big dent in the new phones market.
The challenge of e-waste
With premium and ultra-premium growth still strong among the top two global brands it is important to consider that there are opportunities in markets that are still under-served. In Africa for instance many of the phones in use are still feature phones rather than full-fledged smartphones. We are also seeing immense potential in India’s 5G expansion over the coming years.
Additionally, the tech industry has done extremely well at keeping customers coming back on a regular basis to purchase the latest and greatest models. Every year brings a slew of new products and brands are constantly raising the bar on what their flagship smartphones can do. This all means that in the process, the e-waste problem keeps getting bigger and more complex.
About 10 years ago, no-one could imagine how much smartphones would evolve in a decade. Yet, smartphone technology has accelerated so much that the first smartphones now seem like primitive dinosaurs. For 80% of the world’s population that has a cell phone they no longer need to use countless devices to check the weather, take photos, read emails, or listen to music.
Although the pace of development seems to have slowed recently, smartphones will continue to evolve. And while I believe that AR and VR will surely create a buzz and pockets of interest it may never come close to the popularity of a smartphone.
The biggest challenge for the planet will revolve around e-waste and sustainability. Just tinkering with the packing material and plastics used will help, but in a very small way. And interestingly, very few of the big, organised global players are working on a strategy to tap into the used phones segment which will represent almost 25 percent of sales by 2026.
Smartphones are not disappearing soon.
