The problem with smartphones: they’re losing their cool and wow factor

By , Jul 17, 2013

smartphones1

It has been six years since Apple introduced the original iPhone. The event was likened to a seismic shift that ignited the push to adopt smartphones in the United States. Now with up to 70 percent of subscribers owning smartphones, the big three carriers are searching for ways to encourage upgrades.

However, the push comes as consumers complain the ‘wow’ factor is missing from the industry. The slowdown in smartphone upgrades – evident in Samsung and Apple’s sales – fell nine percent in 2012 with 68 million U.S. subscribers upgrading their devices, according to a Wednesday Wall Street Journal report…

The root of the problem is two-fold: 70 percent of post-paid carriers subscribers in the U.S. already own a smartphone and the impression that there is less reason to update current smartphones.

According to The Wall Street Journal:

With smartphone penetration approaching 70 percent of contract subscribers last year in the U.S., there are fewer customers left to upgrade to the Internet-ready devices and data plans.

And among existing smartphone owner, fewer are seeing the need to buy the latest Apple iPhone or Samsung Galaxy as the pace of innovation slows.

In an interview, a 26-year-old Alabama man who still uses a Samsung Galaxy S2, said “it will be a few years before a breakthrough and people buy phones like when Apple first introduced the iPhone.”

iPhone 5 (two-up, front, back, flat)

Shares of both Apple and Samsung have taken a battering as Wall Street investors voice concern about lower growth for the iPhone and the just-released Galaxy S4.

Investors, used to years of steady growth in the smartphone sector, now worry the best days are behind the two cell phone giants.

For carriers, the wide adoption of smartphones in the U.S. means the days of featurephone owners upgrading to more powerful handsets with data plans has almost reached an end.

While the carriers welcomed paying subsidies of around $400 to attract an iPhone user who will buy a data plan, upgrading a smartphone owner carries little benefit.

iOS 7 (three-up, Photos, Camera, Weather)

In response, carriers have enacted longer periods between upgrades and added new fees to slow the updates, according to the report.

While some carriers – such as Verizon, AT&T and T-Mobile have begun offering quicker upgrades if customers opt out of subsidized handset prices – they are also investigating other revenue streams.

T-Mobile, the nation’s fourth-largest telco, is looking toward wearable devices such as Apple’s rumored iWatch to save the day.

“There is a whole new generation of wearable devices coming that could have some impact on the industry,” T-Mobile CEO U.S. CEO John Legere told the newspaper.

However, as we wrote earlier today, the market for smartwatches is set to grow tenfold next year amid rumors of technology giants entering the market.

In addition to Apple’s iWatch, Samsung and Google are reportedly working on own wristwatch products while Microsoft is developing a smartwatch with a transparent aluminum chassis and LTE capability.

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  • Gróf Attila

    dont forget that there is a whole other world outside of the US !
    always talking about cell phone users in the US..

    • Boss

      How many $650 iPhone’s do you think Apple could sell in Africa? probably less than 1,000

      • Ko Wunna

        dont forget that there is a whole other world outside of the US & Africa !
        always talking about cell phone users in the US vs Africa. :P

      • MarcPhilippeB

        China, India and Brazil are the top emerging markets. And they can sell A LOT there.

      • Mohamed Hassabo

        In the country I live in Africa alone, there are atleast 300,000 iPhone 5 users. I get your point but that’s too little.

      • Ricky

        How about south africa they are rich too

      • Falk M.

        Ho-ho-hoooly crap, what?
        Europe, Japan, South Korea, Australia and NZ, SOUTH Africa, emerging markets, …

        1st world (or going by some of the mentioned areas: “wealthy” at least) is NOT a synonym for the US. Shocking, I know

      • Ali

        Don’t forget Middle east?

        Do you think that the only people buy smartphones are americans?

    • RarestName

      Singapore, Malaysia and South Korea seems to be in the same situation as the U.S. at this point of time. Go anywhere and you’ll see some person with his/her face glued to a smartphone.

    • Chris Kirimi

      Kenya too is an emerging market…there are so many iPhone users like myself

  • abdullah575

    can you help me to FIX 1349 Eorror !!! In iTunes !!!

    • Damian W

      you probably need to go into recovery mode to restore the phone.

      Connect your phone to the computer and open up iTunes.
      First hold down together for a long time the sleep and home button until the screen goes off. Once it is off, wait for about 2-3 sec holding the two buttons. After 2-3 sec release the power button, but continue holding the home button. After 5-8 sec your iTunes should show you the phone is in recovery mode. you can let go of the home button and go to iTunes restore your phone.

      I think this is what you are looking for.

      • felixtaf

        Edit: DFU mode

      • Damian W

        right, edit submitted

    • felixtaf

      Is it 1349 or 3249 error? Try the suggestion by @redevil1987:disqus (Damian W). If that doesnt work, you need to edit you host file in ur computer.

  • cordell

    Smart phones dnt need a wow factor just do what they need to more efficiently every year while making innovation

    • madmaxmedia

      This. They are called ‘smartphones’ after all, not coolphones.

  • Markus Hudobnik

    I agree that’s why companies like Samsung are putting out like svey feature they can think of in their phone.

  • Chindavon

    That’s what happens when a hundred new smartphones released annually.

  • MarcPhilippeB

    a new kind of battery technology will be the next revolution.

    • D.

      Hopefully we see this soon. I’m not a fussy smartphone user. I like the features available (along with a few awesome JB tweaks), but a longer battery life will make the iPhone complete.

  • MarcPhilippeB

    the iWatch will gonna be a big thing. Following things will gonna be key:

    - extend the iPhones ability, show notifications, messages, etc. while using Siri to control it

    - bio-technology: it will measure our physical constitution, counts calories burned, calories eaten, blood pressure, fat-percentage, gives nutrition assistance, records our runs

    -air pressure, altitude, water pressure, compass, weather forecasts, rain risk, temperature, etc

    - MAPS: show you current location, navigate, specialized on hiking and foot naviagtion

    - long battery life: several days without charging!

    THIS IS GONNA BE HUGE!

    • Re

      You literally are just basing this off of rumors. You have absolutely NO IDEA if it will have half of these features, and chances are, it probably won’t.

  • Raul Henriquez

    People are getting smart and the phones are getting smarter and better.
    An iPhone 5 can last you 3 years with no problem. So it gives customers less of an incentive to buy a new phone, every two years on contract. As a matter of fact, the trend now is pre paid. So people are becoming smarter and the only thing holding this industry back is the major carriers. For instance!, I want to keep my Unlimited data but I can’t upgrade at a subsidized fee nor do i want a contract. I rather pay the full retail price of the phone every two years, and that can save me over $2,000 with a prepaid carrier like AT&T Go. I would just have to change my data habits. The point here is the Carriers are slowing down growth with their plans, that don’t have more value over there prepaid counterparts. Why would I want an iPhone with 2GB of data limit, this is plain stupid so yes smartphones are going to lose some appeal. Carriers need to pass on savings to customers once they completed there contracts and please get rid of the billion hidden fees that come with a Post paid plan.

    • Ben Giddings

      tl dr

  • Gorgonphone

    Exactly smart phone are just okay now cause mist folks have one and they all do the same things now so now its all about price and brand

  • Ted Forbes

    How about a phone that is not only to talk on, but a phone that can also talk to me? I am not talking about Siri or GoogleNOW or whatever. I am talking much much more than that. And AI in my pocket. A phone that can almost hear me thinking, that really talks without touching it! Whether in my pocket or bag. On and off the Internet. A phone that turns itself on and off, a phone that ask questions to alert me. A real AI in my pocket! Who will be the first? iOS, Android, Windows, RIM, or unknown? Now thats a WOW!