FIFTEEN YEARS Before Steve Jobs announced three new products: a music player, a mobile phone, and an Internet communication device. When the head of Apple gave his presentation, his audience slowly realized that the three products were actually one gadget: the iPhone. cue clap, a nod to Apple’s renaissance, and a sign of a new era in technology where the smartphone has overtaken the desktop PC As a personal computing center.
Today, even Mr. Jobs might be surprised at how many uses his versatile device has been found. It’s the small screen for banking, networking, map reading, gaming, and more. Apple and other phone makers have been enriched not just by hardware sales (worth $530 billion last year) but by controlling what happens on the platform, from app stores (which raised $135 billion) to mobile advertising (worth $135 billion) about $300 billion).
However, there is mounting evidence that the age of smartphones is fading. Phone sales have fallen slightly since 2016, as slowing technology improvement has reduced the number of times people upgrade. In rich countries, already saturated, the decline is especially noticeable. So, tech innovators and investors are on the hunt for the next big thing, hoping to win not only the juicy hardware market, but also the ability to control the platform on which it all happens.
The current big idea is virtual reality (VR) headphones, spurred in part by pandemic lockdowns. glasses for augmented reality experience more promising, but further (With), where computer graphics are projected onto the real world. Most of the major US tech companies – among them Apple, Google, Meta and Microsoft – as well as Asian giants such as ByteDance (the Chinese owner of TikTok) and Sony, are either developing or selling VR or With Headphones. What was hitherto a niche market is about to become very crowded.
Any claim to discover the next big platform deserves caution. There were a lot of false starts. Tablets have been advertised as a smartphone competitor, yet Apple still makes six times more money selling iPhones than it does iPads. Smart homes have been seen as another potentially huge platform, but so far Alexa and the like have mostly acted as music boxes and egg timers. In-car technology is another platform that has proven useful and valuable, but it hardly threatens to become the center of anyone’s digital life. It’s easy to imagine headphones, which are now mostly used for gaming, stuck in a similar niche.
However, what appears to be underway is a gradual movement by consumers towards a constellation of new wearables. These include voice-activated smart headphones, which can take calls, read messages and more, and smartwatches that handle scheduling, navigation and fitness. A growing suite of health tech tools measure everything from blood sugar to sleep patterns. In America, sales of these “wearable devices” approached sales of smartphones.
These tools are more like phone accessories than alternatives. But as computing shifts away from the pocket and toward wrists and ears, a growing share of consumer attention and spending is seeping away from the phone as well. as VR And the With Glasses are getting lighter and cheaper, and can be the most powerful part of the wearable collection.
People aren’t about to give up their phones, any more than they did a decade ago. But since they interact a lot with earphones or soon with glasses, more of them will be using their phones as a sort of back office, primarily there to provide processing power to other devices. As chips are getting smaller, phones may not even be needed for this.
Don’t expect any of this to happen right away. Internet-enabled phones were launched in the late 1990s and failed to appear in foreign offices. With Headphones – huge, expensive and so far used only in industry – are in a similar stage. However, when technological tipping points are crossed, things can change quickly. Four years after Mr. Jobs introduced his iPhone, sales of smartphones have surpassed all laptops and desktops worldwide. Silicon Valley’s last great hope is still in action. But if the right product turns up, the future may come very quickly. ■
This article appeared in the “Leaders” section of the print edition under “After the Smartphone”