The Smart Phone Hits Middle Age


Hixon, Todd

July 8, 2013

Confusion Rules On Samsung’s Galaxy S4 Sales, With Warning For iPhone 5S – Forbes.

The link above is one of a flurry of recent stories that speak to warning signs that the post-PC devices (iOS-like devices and ultra portable lap tops) are graying and showing signs of a paunch.

  • Both Apple and Samsung have taken hits to their share price.
  • At least half the population in the U.S. and Western Europe now have smartphones like the Galaxy S4 or iPhone (source).
  • Apple has lost the market share lead in both smart phones and tablets (products it invented) to Android.
  • Samsung is moving down-market to find growth (see article linked above).
  • Apple is reported to be ready to do the same (more).
  • Samsung and several carriers are backing development of new operating systems that enable lower-powered, less expensive smart phones: Tizen and Firefox.
  • The Taiwan-based supply chain that builds post-PC devices is scrambling to find new sources of growth (more).

This is not new; previous waves of computing technology have hit this point. The PC did so in the mid-90s: after Windows 95, nothing revolutionary happened in the PC hardware/software world again.

The interesting question is, what comes next? Here is some speculation.

1. The action will be in services. This seems pretty clear: a smart phone now has the capability of a laptop of a few years ago, and the mobile network is likewise equal to consumers’ wired connection of a few years ago (albeit less reliable). So the process of re-conceiving existing services for the mobile world, and inventing new ones, will speed forward. After 1995 the revolution in the PC world was services: the Internet.

2. The “Internet of Things” will not amount to much, however. We often hear that the next wave is every device becomes smart and communicating, so, for example, we can know what the temperature at home is at every moment and fiddle with the programming of our smart thermostats. I watched this market for more than a decade when I had an investment in Ember Corporation, now part of Silicon Labs. The problem with the internet of things is the lack of a sufficiently powerful value prop or pain point. Take thermostats, for example: programmable thermostats have been around for 20 years, and most people who own them have not learned to use them. QED. More broadly, “Smart Energy” (using smart meters and appliances to reduce energy consumption) is lethargic because the combination of the long recession and the “Shale Gale” have moderated the growth of energy costs, particularly electricity, sufficiently that there is little motivation to invest for efficiency.

3. Improving the UX for life is a big opportunity. Computers are embedded in every device that is important in our lives. They become steadily more powerful. Making them easier to use and more functional is a big opportunity. This ranges from small things to big things.

A small thing is a clock that resets itself after a power failure, or when daylight savings starts. This is not hard to do: most people have wifi in the house, which gives access to a time reference, and Ember for example can create a cheap and simple link to a wifi network for any device. Why-O-Why do the clock makers not offer a product, for another $20, that resets itself, so I don’t wake up in the morning and see 12:00 … 12:01 … 12:02?

The Nest smart thermostat has been successful. Talking to users, I gather that key value prop is self programming (and the perception that it is cool). Nest fixed the UX for programmable thermostats.

A big thing is the car. Your car is a serious computer already. But the UX for the computer aspect of a car stinks. The screen is tiny and usually not a touch screen. The software is often written by someone who could not get a job in Boston or Silicon Valley (try my wife’s Lexus for a good example). The software is not upgradable, except perhaps by taking a day to visit the dealer and paying hundreds of dollars, and then it’s minor tweak. There is little integration with your phone, which is sitting there with a 4G wireless link and better traffic information than any car company manages to offer. Need I continue?

This problem is solvable. I’m told the Tesla has a great computer UX; not surprising, since it was designed in California by computer guys. Another good example is the Cirrus airplane, which is like the Tesla of light planes. It’s built around a big computer display that gives access to nearly all the functions and information. And it comes from Duluth, Minnesota!

The smart phone and Post-PC device are becoming infrastructure, and breakthrough innovation is moving to a new plane. This creates uncertainty and big opportunity for entrepreneurs and investors. The opportunity that excites me is, in the words of my partner Scott, is using the mobile internet to “take the friction out of life”.


*Image credit: bryljaev / 123RF Stock Photo

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