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It's Time to End the Yearly Smartphone Launch Event

Samsung announced the Galaxy Note 9. But as we reach peak smartphone, there's less-and-less that distinguishes one phone from the other.

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Aug 10 2018, 2:03pm

Thursday, at a flashy event in New York, Samsung unveiled yet another phone: the Galaxy Note 9. Like you’d expect, it’s rectangular, it has a screen, and it has a few cameras. While unveiling what it hopes will be the next hit, it unknowingly confirmed something we’ve all been wondering: the smartphone industry is out of ideas.

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Phones are officially boring: the only topic that’s up for debate with the Galaxy Note 9 is the lack of the iconic notch found on the iPhone X, and that it has a headphone jack. The notch has been cloned by almost every phone maker out there, and the headphone jack is a commodity that’s unfortunately dying. However, the fact that we’re comparing phones with or without a chunk out of the screen or a hole for your headphones demonstrates just how stuck the industry is.

It’s clear that there’s nothing really to see here. Yeah, the Note is a big phone, and it has a larger battery too. It’s in different colors, it’s faster than last year, and it has wireless charging. Everything you see here is from a laundry list of features that other smartphone manufacturers also have, and the lack of differentiation becomes clearer every year. It’s the pinnacle of technology, and it’s a snooze-fest.

This is, more or less, what smartphone market analyst GlobalData said in an email sent to journalists about Samsung's event.

"The Note 9’s improvements are iterative, and as consumers hold onto their phones longer, Samsung is having a hard time selling expensive phones that are not well differentiated from their predecessors," GlobalData said in a statement.

It’s just another beautiful, complicated, technologically advanced rectangle.

This isn’t exclusively a Samsung problem: Every manufacturer from Apple to Xiaomi faces the same predicament. The iPhone’s release cycle that Apple trained the world to be accustomed to, with splashy yearly releases and million-dollar keynotes, is clearly coming to an end as consumers use their existing phones for longer every year. As the distinction between last year’s phone and this year’s has become ever-more marginal, there’s even fewer reasons to upgrade, making those keynotes all the more painful to watch.

As smartphones pushed the boundaries and iterated at breakneck pace over the last decade, they’ve quickly run into limitations governed by the laws of physics: A phone can only get so thin or light, and the year-to-year speed and battery upgrades are becoming less-and-less impressive. There’s only so many millimeters you can shave off, and megapixels to cram into the camera, before it’s good enough for most people and nobody cares anymore.

The notch in the iPhone X might have been the biggest hardware change we’ve seen in years, but we’re clearly scraping the bottom of the barrel and any alleged innovation such as Face ID is pushed harder than ever, despite being similar to existing technology, repackaged in a new way.

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The fact is that many of these year-to-year changes are simply designed to try to get you to upgrade. Apple appears to have succeeded in this regard so far with the iPhone X, convincing consumers to buy a more expensive phone to get the notch and Face ID, and has ultimately raised revenue per unit to stave off the shrinking industry for now.

Samsung isn’t so lucky, and has resorted to the video game industry’s tricks to try and revive its ailing sales with exclusive software. The Galaxy Note 9, for example, is one of the first phones in the world to get Fortnite, thanks to an Android exclusivity window it brokered with its maker, Epic Games.

Samsung teamed up with Spotify as well, bundling the music streaming service in the setup of every new device for similar reasons. There’s a smart speaker too, with Samsung’s own virtual assistant, and the phone can be used as a limited computer as well. These are forays right out of Apple’s playbook of building out ecosystems of alternative revenue sources. Today, they’re ultimately meaningless for the most part, but adding a smart speaker and other related services may help revive sales of hardware in the short term, just like the HomePod and Apple Music helped with in the iOS ecosystem.

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As smartphone sales begin to stall and phone makers clamber to figure out what’s next, we’re in a period of uncertainty: is the decade of continued, unprecedented growth going to come back? Analysts have been firing warning flares for almost a year now, saying that smartphone shipments are beginning to slow, but the effects have felt on time delay as minor innovations continued to flow in the meantime. In Q4 of 2017, analysts saw the first global decline in smartphone shipments, which hasn’t gotten any better, with reports of slowing European sales continuing and even the chipmakers themselves reporting a shift.

We’ve already seen an example of the consequences of a industry shift first hand: HTC’s gradual decline. Just a few years ago the company sold millions of phones a quarter, and was consistently a top handset manufacturer, but today, it’s essentially non-existent, with much of the handset division sold to Google in 2017.

The PC industry has already faced this problem. As it peaked and began declining, we saw dozens of device manufacturers from Compaq to Sony throw in the towel year after year, as the pie began to shrink. I believe that we’re seeing the beginning of phones lasting longer than ever, and ultimately becoming boring to the consumer. Phones are getting ever-closer to commoditization.

Samsung’s event today made it clear that the smartphone has gone over that peak, and we’re in new territory now: smartphone makers are out of fresh ideas. It’s just another beautiful, complicated, technologically advanced rectangle.

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