Posted By Simon Montford on March 7, 2016
Mobile World Congress took place in Barcelona from the 22nd-25th February 2016. It is the world’s largest gathering for the mobile industry. The reason why MWC is so important, in the context of the Internet of Things, is that the smartphone has become an integral part of the IoT ecosystem. In fact it is rapidly becoming the centre of it; a hub for all things connected. Everything we touch from televisions, wearables, and appcessories such as smart umbrellas, smart wallets, and smart luggage, to cars and domestic appliances will increasingly be controlled via smartphone apps.
As a society we have become so reliant on our phones that a condition called "Nomophobia" actually exists, where people experience a feeling of anxiety when out of mobile contact. Furthermore, repeated surveys show that the majority of people would prefer to lose their keys or wallet over their phone.
This is perfectly understandable because we now live in a world where we use our phones for almost everything from proving our identity, to gaining access to our homes, vehicles and even public transport. Pretty soon our phones will replace all kinds of physical objects like passports, credit cards, cash, keys, and tickets.
The "on-demand" economy has shifted power to the smartphone
Almost every industry will be forced to reinvent itself or become "Uberized". This is because consumers are increasingly growing accustomed to "on-demand" services; everything from shopping, shipping and dating will be delivered, almost instantaneously with a tap on an app. For now the smartphone is the king of connectedness, but for how much longer will it reign supreme?
In future we will be surrounded by "smart objects" that will do our bidding. We will interact with them in our homes, offices, vehicles, and they will become embedded into the fabric of our daily lives. City planners will install them ubiquitously within urban infrastructures to reduce congestion, crime and pollution, making cities of tomorrow cleaner, safer and more efficient. Our bodies will be covered in connected sensors; embedded within our clothes, wearable devices, and even on or under our skin. When this happens in a few years' time, will this render the smartphone redundant, or will the phone remain at the centre of our connected universe?
The smartphone's future is uncertain as iPhone sales decline
All evidence from this year's MWC indicates that the smartphone does indeed continue to reign supreme, but it looks like our fixation with upgrading to the latest shiny and new models is starting to wear off. Perhaps this is because many of us have become desensitised, which has resulted in a collective lack of enthusiasm for products that, only a few years ago, we lusted after. Today it appears that, in the eyes of an increasing number of consumers, all that glitters is no longer considered gold, particularly among Apple fans. Sales of the iPhone are down for the first time in history, so has the Cupertino giant's flag ship product finally lost its sparkle? It will be interesting to see if this decline is an anomaly, or a trend that will signal an end of iPhone/iOS dominance. I'd argue it's the latter for the following reasons.
Firstly, I concede that market maturity and "phone fatigue" is a contributing factor, but why has iOS seen such a disproportional decline? Sales of the iPhone are down by 0.1%, whereas although sales of Android devices have slowed, they are still up by 7.6%.
I get that a significant number of consumers, particularly those within developed territories, have opted to stick with their existing handset, perhaps because the latest crop of devices aren't considered sufficiently innovative or appealing to justify an upgrade. The thing that worries me about Apple is why iOS has been so badly affected? Well I'd wager that what we're witnessing really is the beginning of an Apple decline within the smartphone sector.
I predicted this a while ago, because I regard myself as a Canary in the coal mine, having not purchased an iPhone for quite some time. My reason for not doing so was simple, and one I have never regretted. Having been a huge Apple fan for many years, I simply couldn't justify the huge premium that Apple commands, especially when the equivalent Android phone is not only as good, but pause for effect... more desirable - gasp!
One of my big take-aways from this year's MWC was that, even if you disagree, you must surely concede that the gap between Apple and its Asian rivals has narrowed - considerably. In fact, I am even prepared to go one stage further and say that Apple is being out-innovated in almost every aspect; price, features, quality and even, dare I say it again - desirability. This begs the question, who in their right mind is going to pay twice, or even three times the price for an inferior product? The only advantage Apple currently has is "3D Touch", but it looks like Google's new Nexus phone, developed with HTC, will come with pressure-sensitivity display technology, and Android N will allegedly have 3D Touch natively embedded.
I personally carry three devices around with me most of the time. The primary device is my trusty Nexus 5 (which I plan to upgrade to a Huawei P9), the latest iPod Touch, and a cheap but well-specced dual SIM Windows phone. I have all my apps duplicated, and arranged identically across each device, apart from those that are not available on every platform - yes Microsoft I'm looking at you! Surprisingly however, all the apps I use most frequently like Instagram, Facebook, Twitter, Trello, Gmail, and WhatsApp, are available on the Windows App Store. Rather unsurprisingly it supports Office 365, which is still, hands down, better than Google Docs.
As smart objects become more intelligent, the smartphone will become irrelevant
So the smartphone industry will decelerate to single-digit growth for the foreseeable future, with Apple’s iPhone experiencing the greatest decline. Could this really be due to phone fatigue and market saturation, or is slowing smartphone sales due to a paradigm shift in the way people communicate and interact with the world? Perhaps market forces aren't to blame after all. Maybe the real root cause is due to sociological and technological disruption, namely the IoT?
Well this brings me back to my initial point, not only do I think Apple has become less relevant, don't forget most of the company's revenue still derives from iPhone sales, but what we are witnessing is the start of a new era where consumers will no longer use their phones to interact with smart objects, and this will inevitably lead to the demise of not only the iPhone, but smartphones in general.
This is primarily due to two factors. The real estate offered by smartphone screens is very limited, and secondly the things we use our phones to control today will be far more intelligent and autonomous tomorrow. Within the near future we'll see a big shift towards augmented displays via AR and VR, as well as pico projectors. Messaging, news, notifications, and short-form content consumption, will be well served by wearable devices such as smartwatches, and any of the ever-increasing number of smart devices that will fill our homes, cars and work places. Everything from domestic appliances to in-car control systems will come with a high degree of Artificial Intelligence, so we won't need a phone to control them.
The physical SIM must be vanquished in favour of untethered, seamless connectivity
In this context, using a smartphone to control the world around us seems completely ridiculous! Why would I unlock a phone, enter a PIN, download an app, then click on it in order to control a device in my home, vehicle, or workplace? As previously mentioned, it make far more sense to instead control it directly via touch screen (embedded on the device), gesture, or voice command.
It's not only the smartphone that's hampering adoption of the IoT, but an accomplice known as a Subscriber Identity Module, commonly referred to as a SIM. This tiny little device is responsible for an unholy alliance that has existed for years between phone OEMs and network operators. As a result, they have total control over how, when and where we connect to the Internet.
We will own 100s or possibly 1000s of smart objects, which will all need super-fast connectivity
The SIM continues to force us to use our phones as a conduit to the Internet. This control means we are stuck with the same operator for the duration of a contract, and limited to tethering only a few devices simultaneously. Well in an era where there'll be billions of connected devices on the planet - this approach won't cut it!
We urgently need to remove this barrier to connectivity - the smartphone, and vanquish the physical SIM. Replacing it with a virtual one makes a lot of sense, because then we'll all be able to use our data plans to connect to whichever network offers the best connectivity, dynamically on the fly, across a limitless number of devices, contract-free. Rather than being locked into one, we'll pay a fee to whichever operator offers us the best connectivity moment-by-moment.
Plans are thankfully afoot to continue a move towards developing a virtual replacement to the outdated SIM. For example, around this time last year Google announced its plans to become a mobile virtual network operator (MVNO), titled "Project Fi". Today American Nexus 6 owners have the capability to be automatically switched between 4G provided by multiple operators, and high-speed wi-fi.
In future, both enterprise customers and consumers must be allowed to connect all their devices directly, sans smartphone, and have the freedom to switch automatically to the fastest available signal, be it LTE, wifi or, when deployed, 5G. The ability to switch signals to the strongest should work across multiple operator networks and geographic territories. Until this day comes, we'll remain in the dark ages, and the IoT will not reach its full potential.
When this day does finally arrive, and I'm optimistic that it will, we'll ditch our smartphones, and we'll think back and laugh like we do now about the first generation of "mobile" phones that were the size and weight of a brick. Smartphones will be replaced with wearables, and wearables will be replaced with embeddables, but everything must become untethered and always connected.
View product highlights, watch a talk I gave about MWC (below), and check out my personal photo journal.
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