Important points
- For years, most smartphone buyers seem to have settled for upgrading every couple of times.
- The thrill is gone. If the existing device is good enough, modest improvements are not a selling point.
- Foldable devices could temporarily revive the excitement of upgrading, but even if they do, it might be a few more years before AR glasses replace them.
Another year, another smartphone update. We just saw Apple launch the iPhone 16 and 16 Pro, Google launched some Pixel 9 phones in August, and Samsung debuted its Galaxy S24 lineup much earlier. In fact, all major smartphone manufacturers are locked into an annual upgrade cycle for reasons we’ll explain later.
But gone are the days when everyone gets excited about the latest model. Sure, there was a new iPhone lineup this year, but it wasn’t the campy lineup we saw in the 2000s or 2010s. Media coverage has also decreased. You’ll probably see reports from the tech and business press, but the days of a particular model being a pop culture phenomenon are long gone. Casual observers may get excited about “the new Google phone” or “the new iPhone,” but they probably don’t care which number it has.
Personally, I think it’s safe to say that the excitement of the early days of the smartphone market will probably never return. There might be a temporary resurgence for a few years, but otherwise I predict wealthy tech junkies will just buy new phones every year.
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Current status of smartphone functions
Or talk about diminishing returns.
The central problem is that smartphone manufacturers are making fewer and fewer important hardware changes. Processors are getting faster, but they often aren’t working on the tasks people care about, even though companies like Apple and Google claim they need generated AI and perhaps console-quality gaming. Existing processors are more than sufficient. Camera systems usually only have higher megapixel counts or better telephoto range. You might get a bigger screen, a bigger battery, faster charging, but never anything game-changing like a battery that lasts two full days.
All fundamental problems have been resolved and there is no incentive to start a revolution.
This isn’t all that surprising. In the early days of the smartphone era, there were no templates to work with, and companies were still developing basic technologies such as cameras that didn’t take blurry, low-resolution, cluttered images. Each new model had the potential for revolutionary improvements and solving fundamental problems. For example, the iPhone 4 was just huge with a non-pixelated display, a decent rear camera, and a front camera for video calling.
These days, all the fundamental problems have been solved and there is no incentive to start a revolution. Mobile phone manufacturers know exactly what they can sell while maximizing profit margins. Devices like the Galaxy S24 Ultra will impress sufficient That’s what buyers think, even though it doesn’t do anything dramatically different than the S21 Ultra. Meanwhile, people who are invested in the Apple ecosystem have little choice if they want something that will last a long time, whether it’s the iPhone 16 or if it breaks.
Ever-expanding upgrade cycle
Your phone is just like a computer
According to 2023 Statista data, the average upgrade cycle for smartphone buyers in the U.S. is just over two and a half years, but many people keep their phones for three to four years, just like they do with their tablets, if not longer. It has become common to continue using it. Or a laptop.
It’s no wonder. Fast forward to 2021, and I was surprised at how little the iPhone 13 felt compared to its previous device, 2018’s iPhone XR. The screen is brighter, apps are a little faster, and low-light photos are noticeably better, but that’s about it. If I had bought a standard iPhone 16 instead of the 16 Pro, I would probably be saying the same thing today. It’s mainly the Pro’s additional features like the telephoto lens and 120Hz display that make it a radically better experience. If I had the money back then, I might have had an iPhone 13 Pro.
Businesses are realizing that they are slow to upgrade their phones, which is why they are paying more attention to services and accessories. It provides a source of income during off years. Subscriptions provide stable income. $100 a year for Google One Premium may not seem like a lot compared to a smartphone, but it adds up over time. Google will happily add YouTube Premium, YouTube TV, or Google Fi to your bill as well. .
foldable promise
An undervalued market that has yet to be discovered?
Perhaps the only technology that will see an accelerated upgrade cycle in the near future is foldable technology. Foldable smartphones have been around for a few years, but they’re still relatively new. Manufacturers continue to grapple with fundamental issues like app support, ideal form factors, and how to keep dust and water out of the hinge. It’s a huge generational leap, like the Pixel 9 Pro Fold.
Every time Apple gets closer to releasing its rumored foldable iPhone, there’s a chance the foldable device will break out of its niche. The company has a history of being late to the product category, but has since refined it to make it more appealing to the masses. If they can accomplish that with a foldable iPhone, it could begin the same kind of regular one-upmanship in the industry that we’ve seen since the original iPhone in 2007.
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However, there are some potential obstacles. It’s the price more than anything. So far, flip phones have been incredibly expensive, exceeding even the price of most flagship phones. If Apple and others want to be able to upgrade their foldables frequently, they’ll have to lower prices, but I doubt that will happen. They hope it will be easier to tap into the “premium” market and ultimately ease production costs.
In fact, by the time foldable devices become affordable, the general public may be ready to switch to AR glasses instead. Meta recently demonstrated some of the potential of AR with its Orion concept glasses. Why bother with a 7-inch OLED panel when you can simulate a larger virtual screen anytime, anywhere? This doesn’t even take into account the possibility of overlaying data onto real-world objects. I ride an electric unicycle, and it would be very convenient if Google Maps directions were displayed on the road in front of me.
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Are smartphones reaching the end of their lives?
It’s hard to catch up
If I were a gambler, I’d bet that most smartphone buyers don’t revert to annual or biennial upgrades, which is a common practice. With AR glasses on the way (something like that) and foldable devices showing no signs of getting cheaper, it’s probably going to take 2 to 4 years from now until smartphones lose relevance, or at least cease to be the dominant device. The cycle will remain as it is.
The current 2-4 year cycle will likely remain the same until smartphones become obsolete.
So why do cell phone manufacturers bother with upgrades every year? A cutthroat marketplace, pure and simple. The idea is that people teeth When you’re ready to upgrade, you can avoid jumping to a rival brand with slightly newer specs. That’s okay, especially when you realize it’s going to other devices anyway. My Apple Watch is just as important to me as the iPhone it’s connected to, so I want to use Steam Deck and EUC for entertainment. If AR glasses aren’t where I need them in 2027, I’ll still buy a smartphone. I just don’t get all that excited about it.
