Happy Lunar New Year of the Pig!

Lunar New Year of the Pig

Happy Lunar New Year of the Pig! A fond farewell to the Year of the Dog as well – which I have no doubt will go down in the annals of the tech industry as an inflection point marking the end of the incredible growth of the smart phone and the transition to…

To what exactly? Perhaps the driverless car, though there are growing doubts as to when or even if that will ever happen. Or, more likely, a period of experimentation as the industry tries to figure out what the next blockbuster device will be – assuming of course one exists.

Let’s return to the smart phone for a moment. It’s important to note that although global shipments are declining slightly, the market size is still well over one billion units a year. The difference is that the excitement is rapidly draining form the market as consumers delay purchases of new devices because they offer minimal improvements in terms of features and performance over the ones they already own. Perhaps new foldable form factors may reignite interest in the high end, but this is by no means guaranteed particularly if the pricing is high.

As the smart phone market slows down and margins are put under greater pressure, vendors will inevitably increase investments in complementary IoT and AI devices to boost overall revenues and increase service income. But even though we have seen considerable growth in smart voice assistants such as Alexa, smart watches such as the Apple Watch, and numerous smart home devices, none of these come anywhere near close to the potential of the smart phone in terms of ASP and unit volumes.

There’s a very good chance therefore that the future high-tech hardware market will be driven by minor hits rather than major blockbusters like the PC and smartphone. This may make it more difficult for the media and analysts to track, but it’s sure to make the industry very interesting in the year ahead.

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