Smartphone Market in Need of Key Transformative Technologies to Stimulate Replacement Cycles

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4Q 2018 | IN-5246

The smartphone market is frequently experiencing growth and change, despite an overall level of saturation. Vendors are offering devices with an increasing number of transformative features in an effort to make their technology more desirable and improve replacement cycles. Features like Fingerprint on Display (FOD) and multiple cameras are starting to enter the smartphone market, offering users the ability to easily unlock phones and take higher-quality photographs—two features that are often demanded by consumers. Other features such as foldable displays and 5G will begin to appear by 2019, offering users the ability to have a larger screen without a larger form factor and an improved broadband connectivity experience. Over the coming years, a number of other transformative technologies are likely to be implemented in smartphones, ensuring that the market continues to evolve.

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New Transformative Features Help to Keep the Market Moving as It Reaches Saturation Levels

NEWS


The smartphone market is frequently experiencing growth and change, despite an overall level of saturation. Vendors are offering devices with an increasing number of transformative features in an effort to make their technology more desirable and improve replacement cycles. Features like Fingerprint on Display (FOD) and multiple cameras are starting to enter the smartphone market, offering users the ability to easily unlock phones and take higher-quality photographs—two features that are often demanded by consumers. Other features such as foldable displays and 5G will begin to appear by 2019, offering users the ability to have a larger screen without a larger form factor and an improved broadband connectivity experience. Over the coming years, a number of other transformative technologies are likely to be implemented in smartphones, ensuring that the market continues to evolve.

Transformative Technologies Set to Drive Market Replacement

IMPACT


As an enhancement to current smart biometrics, FOD offers an improved scanning experience, allowing users to scan their fingerprint directly from the screen rather than via a single sensor, providing a faster, simpler way to unlock a device. The technology is set to expand into the smartphone market and is already used in Vivo’s X20 Plus UD, Xiaomi’s Mi 8 Explorer Edition, and Huawei’s Porsche Design Mate RS. FOD will increase in popularity between 2018 and 2027, and over 553 million smartphones will feature the technology by 2027.

For some time, dual cameras have found their way into an increasing number of smartphones. This technology allows for an improved photography experience—meaning that users can take high quality photographs in a number of environments, including indoors, low light, and nighttime. Devices such as Apple’s iPhone X, Samsung’s Galaxy S9 and Note 8, Xiaomi’s Note 5, and LG’s V30 offer dual-camera technology. Most commonly, these dual cameras are found on the rear of the phone; however, LG’s V30 also features dual front cameras. Three rear camera sensors are also beginning to enter the market, with Huawei’s P20 Pro being the first to offer this technology, housing 40 Megapixel (MP) color, 20 MP monochrome, and 8 MP zoom lenses. Multiple array cameras will continue to find their way into smartphones, with vendors launching flagship devices that include the technology.

Foldable displays are expected to appear in the smartphone market in 2019, most notably viaSamsung’s rumored Galaxy X, followed by Motorola’s new RAZR. This feature will allow the device to have a large tablet-like screen on a small device form factor. This will improve the overall experience and allow for multiple apps to be open—and accessible—simultaneously on each side of the screen. Foldable displays allow each app to take up a significant amount of space, making them more readable and recognizable. The current lack of smartphones with a foldable display can be due to the complex manufacturing processes involved, the requirement for the device to be able to withstand the wear and tear of everyday use, and the cost of implementing the technology. However, by 2027, most major vendors will have launched a device with foldable display technology. ABI Research expects that over 248 million smartphones will ship with a foldable—or flexible—display.

Also appearing in 2019 is 5G, which will experience large growth and a key driver for device migrationto become the standard for most smartphones by 2025. This is due to its ability to offer an enhanced wireless broadband connectivity experience—improving not only the speed but also the connectivity—and diverting users away from public Wi-Fi while increasing video call and video streaming quality, AR experiences, and instantaneous cloud connections.

Points of Differentiation Must Be Found within Transformative Technologies to Improve Replacement Cycles

RECOMMENDATIONS


Smartphones, both flagship and others, must continue to offer transformative features to cater to the growing list of requirements from consumers, which includes biometric technologies, improved cameras, better form factors, faster connectivity, and more. Vendors must continue to develop these new transformative technologies and integrate them within their devices to allow them to be distinguished from others in the market. In order for vendors to offer smartphones that stand out while creating differentiation, they must continue to develop and offer new transformative features that provide consumers with new, unique, and innovative ways to interact with their devices. These advanced features (i.e., smart biometrics, multiple cameras, foldable displays, and 5G) will completely transform how users interact with smartphones. New technologies should be patented quickly to combat differentiation within the market.

To provide transformative features, particularly those with enhanced technologies such as 5G, smartphone vendors need to invest in in-house expertise or look into the possibilities of outsourcing or partnerships. This approach will ensure that such features are included effectively and efficiently into the device without compromising the user experience. For example, in the case of 5G, vendors need to solve the increasing radio-frequency complexity that goes along with the improved connectivity if they are to launch a smartphone fit for the 5G market. Work must also be done to ensure that these new features function seamlessly with the smartphone and its operating system before the device goes to market to prevent any backlash from consumers.

Smartphone vendors must ensure that relationships with suppliers are built to allow for an adequate supply of the key components. This will help to prevent shortages or delays in supply that will adversely affect the supply of smartphones. Strong relationships with channel partners and sales platforms must also be in place to ensure that the smartphones make it to consumers quickly and efficiently. Other partnerships with banks and retailers should be in place to help boost mobile payment services, which are in high demand by consumers, and strong ties should be in place with content creators to guarantee that games, videos, Augmented Reality/Virtual Reality (AR/VR), and other content are enhanced.

If cost seems to be an issue when trying to add various transformative technologies to smartphones, vendors should consider offering multiple options to consumers. Budget smartphones should have limited features, and more exclusive and expensive devices should ship with multiple distinguishing features. This allows for vendors to cater to numerous markets, budgets, and requirements, offering consumers more than one option to choose from, along with varying features depending on the device.

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