As smartphone market matures, makers race to wow consumers


Smartphones,that just a few years ago were seen as a miracle of modern technology are now, for the first time, in the hands of a majority of Americans. (Albert Gea/Reuters)
June 5, 2013

The smartphone revolution has reached Joe Cecconi, which may mean it isn’t a revolution anymore.

The retiree from Fairfax County got his Samsung Galaxy S III six months ago, finally giving up on his old flip phone. He hardly ever uses the apps, but he said he found the smartphone very useful for “the Web, texting and making calls.”

The handheld devices, which just a few years ago were seen as technological status symbols, are now for the first time in the hands of a majority of Americans, according to a study released Wednesday by the Pew Internet & American Life Project. They’ve become commonplace, meaning for every technophile sideloading apps onto an unlocked smartphone, there’s probably a middle-aged office worker peering over a pair of bifocals at a touchscreen.

The two dominant smartphone makers, Apple and Samsung, are still fighting over the declining share of Americans who don’t have one. They are using slick television commercials and aggressive lawsuits against each other because the devices remain critical to their bottom lines. But some analysts say the phones have reached their technological ceiling. New versions have struggled to wow the reviewers and average consumers, a factor particularly important to tech firms, which often sell more products if they are seen as cutting-edge innovators.

“Now that it’s in the hands of everybody, maybe it loses its cool,” said Ramon Llamas, a mobile trends analyst at International Data Corp.

As the market for smartphones matures, Silicon Valley firms are racing to create new categories of products that consumers will have to rush out and buy. The smart money is on wearable technology — think Google’s Glass headset, Dick Tracy watches or Web-enabled shirts and talking shoes.

The first company to mass market such gadgets could reclaim some of the magic that accompanied Apple’s launch of the first iPod or iPhone, analysts said.

“If you can be that innovator and the company that people seek out, you can get the majority of the profits,” said Rob Enderle, principal analyst for the Enderle Group.

The pressure to innovate has been growing for Apple, which has seen its stock fall precipitously after its founder, Steve Jobs, died in 2011. Investors have been questioning whether the firm can continue its streak of groundbreaking hits — the iPod, the iPhone and the iPad — which transformed the company into the most valuable in the world.

In recent years, Apple has released products that were largely updates of former models. Meanwhile, it focused some of its energy on pursuing lawsuits against rivals to prevent them from copying its designs.

The next significant addition to the company’s iPhone line may be a cheap device that could boost sales overseas, where Samsung has become dominant, several Wall Street analysts have said.

Technology analysts say Google has arguably taken the lead in developing cutting-edge innovations, generating buzz about its new head-mounted Google Glass computer, as well as its driverless car experiment in California. Earlier this year, it also unveiled a pair of talking shoes that try to “motivate” a person to exercise.

Other tech companies may not be far behind. Samsung has said that it is working on a smart watch. Nike has seen some success with its wristband called FuelBand, which works with smartphones to track users’ movements. Other firms are starting to make clothes that measure a wearer’s heartbeat or running stance to warn against possible injuries.

Apple rarely comments on products in its pipelines, but chief executive Tim Cook hinted at a technology conference last week that “the wrist is interesting,” sparking rumors that it could unveil some wearable technology at next week’s Worldwide Developers Conference.

“We’re standing on the edge of what wearable computing is going to be,” said Llamas, the IDC analyst. The wearable tech market could sell up to 9.4 million devices by 2016, analysts say.

That doesn’t mean smartphones are going the way of the cassette tape player. Apple is still selling record numbers of its iPhone, though the growth rate of those sales is slowing.

The Pew Research Center study found that 56 percent of all American adults now use mobile phones that run an operating system such as Apple’s iOS, Google’s Android or Microsoft’s Windows Phone. That’s up from 46 percent in 2012 and 35 percent in 2011.

Google and Apple owners account for half of cellphone users, the report said, with 28 percent of respondents saying they use Android phones and 25 percent choosing an iPhone with iOS. The survey also found that despite the rising adoption of smartphones, BlackBerry users are dwindling — down to 4 percent of the population, from 10 percent in May 2011. The survey was conducted over cellphones and land-line phones from April 17 to May 19, among a sample of 2,252 adults over the age of 18.

Overall, the study found, 91 percent of adults own a cellphone. About 35 percent own cellphones that don’t run mobile operating systems.

That used to include Cecconi, a 60-something, who was standing under a tree at McPherson Square on Wednesday. Struggling to read the screen of his Galaxy III phone in the sunlight, Cecconi laughed dismissively when asked whether having the smartphone made him feel cool.

Cecconi, who has started his own consulting shop, said he bought the device for practical reasons. “For me, the smartphone is definitely a tool,” he said. He said he mostly uses it as a “regular phone.”

But Cecconi said he’s holding out hope for a very specific technological breakthrough: a smartphone with a screen that is not affected by sunlight.

Hayley Tsukayama covers consumer technology for The Washington Post.
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