How does the current economy influence smartphone technology?
The economy. It’s a topic on everyones mind these days and very much a primary factor in whats taking place at the consumer level with smartphones. All the news we read about the latest phones dropping are a direct result of this and the degree that we are all affected by the economy heavily influences our choices in mobile communication. If you’re reading this, chances are you either have a smartphone or are around people that use smartphones as their primary means of communication. When discussing a vast abstract concept such as “the economy” and a complex ecosystem like “smartphones” there is quite a bit to take into consideration. In this post, I’ll explain a few of my observations in regards to how the global recession thats currently taking place is influencing smartphone technology.
Form Factors
A popular talking point that has been widely adopted by the media and the blogosphere is the “iPhone vs. every other phone” discussion. The argument here is that the iPhone revolutionized the way consumers view smartphones and the process of developing applications for smartphones. The post iPhone mobile landscape was one of every other mobile phone company trying to release touch screen phones, their own app store, whatever they could to get a product out there that somehow competes with the iPhone. One aspect of Apple and the iPhone that isn’t widely discussed are processes that occurred at Apple in order to create this climate. By establishing touch as the main focal point of the modern smartphone experience, Apple intentionally forced competitors to allocate resources faster than they otherwise would have in order to get their competing phones to market. All Apple had to do at this point was sit back, run commercials, and let the hype machine run with the notches turned all the way up to 11. Today, the form factors that smartphones appear in are a direct result of how that particular company allocates their industrial design resources. With declining revenues and consumers being more careful about what they spend their money on, companies are having to be as efficient as possible with the form factors that they deliver smartphones in. Consumers today have increasing demands with what they expect in mobile devices and pulling a waterworld with a newly released device can be devastating.
Calling Plans
When people everywhere have less disposable income, all monthly bills are assessed. Saving $20 a month on your phone plan by reducing the number of minutes that you use every month is something people everywhere have been doing to reduce expenses. Some people have even ditched smartphones with the accompanying data plan and gone back to standard phones. These specific consumer actions in aggregate have effects all the way up the chain. And by chain, I mean a corporations bottom line. Carriers and manufacturers have greater incentive in today’s economic climate to deliver competitive data plans in order to lure consumers to purchase a smartphone on their network. Lots of people want smartphones, but not everyone can pay $80 a month for that data plan. One of the primary selling points of the G1 was that you could get a decent plan( 600 minutes + 250 text messages + unlimited data) for $60 a month. I would say a plan such as that would be “competitive” by todays data plan standards and a $90 a month plan for an iPhone to be “unreasonable”. When you’ve been looking for a job for months because you’ve been laid off, having the unlimited internet and twitter apps on your phone quickly becomes a luxury. In the current economic climate, families and people everywhere have had to go back and evaluate the value that they place on their mobile devices and their resulting monthly use.
Marketing
Marketing is one aspect of a company’s plan when bringing a smartphone to market. I don’t think its a primary aspect on the ground level with consumers, because no matter how slick a campaign is, if you can’t afford a $200 phone then you simply can’t afford it. Despite this, companies are having to be more savvy in their advertising delivery in effort to (again) allocate resources efficiently. Advertising is a investment and if the returns (consumer purchases) aren’t optimal, then companies have to evaluate how they are trying to sell their phones to consumers.
R & D
This is probably one of the single most important factors that can deliver benefits to both companies and consumers. How companies engage in research and development is directly related to the type of devices they release. With declining marketshare, revenues, and employee reductions, companies are having to be very smart in what they choose to develop. A R & D cycle that leads to vaporware is unacceptable today. Companies want innovations that they develop to hit the streets as soon as possible because the quicker these technologies are released the faster a company could move ahead of competitors in the marketplace. Currently, Apple, Google, Microsoft, Nokia, Palm, Samsung, Sony Ericsson (to a degree), RIM, and HTC are in a race to deliver the most cutting edge smartphones to consumers. Companies like IBM and Intel are acting as secondary market participants that are helping develop some of the underlying technologies that power these phones. How does a company know exactly what consumers want? To answer this look no further than the phone you have in your pocket and how satisfied you are with it.
