Given Nokia dominated the feature phone market in the past decades, they must have effectively managed the cost to gain a substantial market share. Will Nokia come back as a dominate player in the next phrase of smartphone market?
On the other hands, will Apple change their strategy to build a low end smartphone, giving up their position of prestige in the electronic market?
Are we talking about a tipping point or hitting a saturation/feature curve?
Remember when we paid $6000 for a desk top or laptop of somewhat high performance? Now for $1000 we can get a PC that is pretty close to the tops in terms of performance, crazy gamer PCs aside (and no offense intended). There has always been lots of money to be made in the PC space though because as prices declined, unit shipment increased.
The phone market is different. There is already fairly high penetration albeit the highest end phones still have quite a way to go for penetration.
However, just like the PC, we will hit a point with phones where there are really no more features to pay for or at least to demand high end prices. There are limits to what a phone in a given form factor can or that you would want it to do, even with an augmented reality user interface. Given that situation, and hitting saturation, it is only to be expected that total smart phone sales (in dollars, not units) will eventually decline. Such is the world of tech where things get cheaper to make.
Obviously its saturation point that Junko meant. "tipping point" is normally used to refer to start of a high growth phase.
"Financial analysts are acknowledging that they made hopelessly optimistic forecasts for smartphone sales"
We already know, these guys arent the smartest. Dont we?
FWIW, according to wikipedia's wiktionary document:
(catastrophe theory) The point at which a slow, reversible change becomes irreversible, often with dramatic consequences.
The point in time at which some new technology becomes mainstream.
For some reason I always associate it with the point when a canoeist approaching rapids feels his boat physically tip forward and accelerate dramatically. I guess you just have to hope it's a wild ride ahead, not a vertical drop onto the rocks.
This doesn't really come as a surprise.
I've been speculating for a while that in the not too distant future all phones will be smartphones because they *can* be. Hardware has gotten steadily smaller, faster, and cheaper, and today's low end phone was top of the line hardware not that long ago.
The distinction between smartphone and feature phone was hardware and price, with feature phones less expensive because they were based on less powerful hardware and cost less to make. The hardware distinctions are fading fast, as things like dual-core 32 bit CPUs, DRAM, and other components steadily drop, and the price distinction fades in consequence.
The differentiation now is in software, and precisely what the phones can do.
I concur the high end is saturated. I don't see a lot of growth for Apple in new iPhone sales, for example, because everyone who wants (and can afford) an iPhone likely has one, so the market will be replacements and upgrades.
There is a lot of growth in the low end possible, but that has the challenge of making actual money on commodity products with commodity pricing.
Speaking personally, my cell phone is the smallest, cheapest, least capable phone Samsung makes. All it does is calls and SMS, and that's all I want it to do. Everything else is something else's job. (Among other things, I simply want a bigger screen for the "everything else" than a practical phone will have.)
But I'm in a distinct minority. For an increasing number of people, a smartphone is their main computing device.
Apple will sell more Iphones, they just will cost less than the current Iphone and there will be less profit. Will they be as cheap as commodity Google products .... unlikely, just like the Mac and PC. Dedicated following who just wants something that works without hassle. I am not MAC person, but can appreciate that sentiment at times. It actually works for the vast majority of consumers.
I am not buying completely into the smartphone being the primary computing device for an increasing number of people. For those who cannot afford anything else, yes, but for those that can, the form factor just does not work for far too many tasks including something as simple as reading and surfing. Sure you can do it, but if you had a tablet in one hand and a phone in the other, which will you pick? Same with a tablet and a laptop if you have to write a letter.
I think the tablet and laptop will meld for 80% of the market, with geeks like us always wanting or needing more power.
There is also the concept of the transportable computing platform (Phone) that plugs into user interfaces (displays, keyboards) as needed. They could even run in higher performance/processing modes when docked. This I see, but then what about the impact of cloud computing?
@Jack L. "Apple will sell more Iphones, they just will cost less than the current Iphone and there will be less profit."
The question is whether Apple will accept less profit. Historically, they've valued revenue and profitability over market share. What would the price need need to be to make a non-Apple user "trade up" to an iPhone? It gets complicated because most sales get made through carriers and are subsidized as pat of a multi-year contract.
"I am not buying completely into the smartphone being the primary computing device for an increasing number of people."
The issue is indeed form factor. I wouldn't try to use a smartphone for many tasks for the reasons you state. But you can't carry a tablet in your pocket. When you are at home, you may use a desktop, laptop, or tablet. When you are out and about, what do you want to carry? For many, the answer is "Nothing that won't fit in a pocket." I was just corresponding elsewhere with a woman who sometimes SSHes from her phone into servers to do admin chores because she's out, because she really doesn't like to carry a bag or purse large enough to hold a tablet or other device.
"There is also the concept of the transportable computing platform (Phone) that plugs into user interfaces (displays, keyboards) as needed."
I've been expecting that, too. The hardware is fast enough and small enough that you could have a main computing device in a phone form factor.
"This I see, but then what about the impact of cloud computing?"
What about it? If anything, it enhances the probability. If the real work is done on a server off in the cloud and your data lives there too, what you need to have is reduced to something that can access those resources.
What do most users actually *do* with a computing device"? The main use cases are web browsing and email, and you can do both with a phone.