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Smartphone innovation is slowing, so what's next?

Matt Hamblen | March 25, 2014
Improvements are less significant, leading makers to explore wearables and connected 'things.'

Llamas said he was encouraged by the generally available $179 price plus two-year agreement for the Moto G. "Spec for spec, it's very robust and can hold its own," he said.

Aside from the control that the carriers exert on smartphone makers, big brand names like Apple and more recently Samsung will continue to matter, maybe even more so, going forward.

"If everybody has a smartphone that looks the same, how much does brand count?" Llamas said. "Just look at the marketing spin that Samsung goes through. I do want competition and I want the vendors to push each other."

HTC's declining sales and profits have brought the company itself more attention than its devices, which have been widely regarded for their impressive styling. One overlooked feature in the original HTC One was front-facing speakers, which meant a user could watch a movie on the device without having to lay it on a table to enhance the sound as other smartphones require users to do, Llamas said.

Yet, nobody would buy the HTC One for that single feature alone, which illustrates the problem of a decline in innovation.

Patrick Moorhead, an analyst at Moor Insight & Strategy, said there are still opportunities with innovations that smartphones can try to perfect, including voice command software or beaming the contents of a smartphone to a large display.

"Neither Google, Apple nor Microsoft has yet delivered on the promise of voice commands you can rely on," Moorhead said. "Siri and Google Voice are improving but just aren't reliable enough to be used by many consumers for multiple requests."

Likewise, Moorhead said, "It is still too hard and unreliable to wirelessly connect or beam the contents of your smartphone to display on a large display like an HDT or PC."

What's happening in early 2014 with smartphone innovation is about the same as what happened with desktop computers, and many other electronics products, in their early days.

"As with any maturing marketplace, it gets harder and harder to make any significant innovations that others can't also make or at least quickly copy," said Jack Gold, an analyst at J. Gold Associates. "This applies not only to to HTC, but also Apple, Samsung and others."

This economic innovation cycle is what Gold calls the innovation curve. "When you are trapped by this innovation curve, you have to find a way to break out, but it's not easy to do without abandoning your entire ecosystem and to some extent, displeasing your client base."

The general industry move to the Internet of Things and wearables will help break the constraints of the innovation curve " to some extent," Gold added. "Those markets are not fixed or mature and many experiments are going on. It's very early in the innovation curve for wearables."


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