It’s January 9th 2007. Steve Jobs has just finished his keynote at the MacWorld convention in San Francisco, with an announcement that will change the world. The launch of the first iPhone. A phone launched with a bold, courageous message: to  ‘reinvent the phone’. Within a year, 3.7m had been sold. Fast forward to today, and cumulative iPhone sales have reached 2.2bn. At the peak of the iPhone phenomenon die hard fans would queue for days outside stores, dawn till dusk, all for the glory of being able to say that had got it first. 

Fast forward to 2019, and a very different story is emerging. Reports are calling out the decline of the smartphone, with global sales predicted to fall by 3% in 2019. The launch of the iPhone XR, the best ‘value’ model to date, was met with a lack lustre reception of only a dozen people outside flagship stores in London and New York. Samsung, the world’s leading smartphone manufacturer, experienced a 42% decline in profit of it’s mobile division in Q2 2019, citing falling sales of flagship models such as the Galaxy S10 as a contributing factor. 

So what exactly is it that’s causing our smartphone love affair to sour? Some may say it’s a case of feature fatigue. With new smartphone’s being released at an astounding rate (7 flagship models were released by the top three smartphone makers alone in 2018) seemingly with few differences, consumers are switching off. Claims of breakthrough cameras, advanced battery life and unparalleled processing speeds are met with eye rolls, especially when upon first glance, the X feels remarkably similar to the Y. 

Which brings us to the second point: price. Today’s flagship smartphones are, at least from a pure cost perspective, akin to a luxury purchase. In just three years, the average price has risen by 54% to an impressive $1000. At such a high price tag, convincing consumers to trade up requires a lot more than the promise of a slightly improved camera.  

That’s not to say that our smartphones are becoming redundant in our everyday lives: quite the opposite. But, rather that the focus of that relationship has shifted: from the smartphone itself, to the providers of what we use it most for. That for being to binge on content and services. Gaming, films, music, life admin. Whatever it is, we cannot seem to get enough of it. Whilst leading smartphone providers continue to report declines in sales, the likes of Netflix are experiencing exponential global growth. In just over 7 years, Netflix have acquired 157.6m subscribers, generated global acclaim with Emmy award winning series and won an Academy Award. Spotify Premium now boasts 100m paid subscribers worldwide, whilst gaming phenomenon Fortnite has grown to 250 million registered users in just over 8 months

This is not a trend for the short term. In fact, studies suggest our devotion to services is only set to grow. By the end of 2020, a fifth of adults in developed countries are expected to pay for at least 10 subscriptions, averaging at $100 a month. 

The likes of Apple are taking note. With smartphone sales dwindling (sales of iPhone in Q1 2019 accounted for the lowest share of revenue since 2012), Apple have hedged their bets on a more promising prospect. Already behind popular services such as Apple Music and iCloud, this March saw them take their commitment to the next level with a launch event devoted entirely to services. Announcements included a new streaming service (Apple TV Plus), premium game subscription platform (Apple Arcade) and the Goldman Sachs backed Apple Card. So far, so good. Apple reported 13% YoY growth for their services division, with the new launches set to raise that figure even higher. 

Now let’s throw 5G into the mix. The next generation of wireless connectivity, set to transform everyday society. 100x faster download speeds, endless streaming and 4K smartphone resolution as standard only touches the surface of what 5G is expected to deliver. New technologies will be realised to their greatest potential, from autonomous driving to AR. And most crucially, 5G will make IoT connections commonplace; enabling almost every device to assume the title of ‘smart’. As summarised by Intel VP Julie Coppernoll, in the post 5G world ‘nothing will be mobile anymore, because everything will be mobile’.

It’s all starting to feel a bit bleak for the once ‘smartphone’. If all we care about is content, and we can in the future watch it in our autonomous cars, where does that leave the phone? The answer lies in reimagining the notion of a ‘smartphone’. To look for ways to build more emotive relationships, selling experiences over advanced resolution capabilities. Perhaps the solution lies in expanding the smartphone’s role in everyday life, to make it a crucial part of something far bigger. With the number of connected devices set to increase by 1,036% by 2030, the smartphone will become a vital hub for how we manage those devices. Samsung are already leading the charge in this space, outlining their ‘Connected Living’ strategy at CES 2019 with the smartphone a central part of it. Or maybe it is more about focusing innovation, moving away from the incremental to the meaningful. Foldable phones, as it stands, are the most promising example on the horizon. Part phone, part tablet, part PC, foldables are set to make effortless multi-tasking, full screen filming watching and truly immersive gaming a reality. Throwing 5G into the mix, the stretch of immersive experiences the foldable will be able to deliver is seemingly limitless. With Samsung set to imminently release their model and Huawei poised to follow suit, only time will tell if the ‘Fold’ is the hero the smartphone is waiting for. 

Nothing of course, is certain. But the brands who take note of this changing landscape and seek to reimagine the possibilities of the smartphone have the greatest chance of keeping it alive. After all, it’s by continuous evolution and change that the smartphone has become the everyday companion it is today. Whatever the future holds, it’s fair to say it’s not time to give up on the smartphone just yet.