Smartphones are now capable of doing most things we could want them to. Citi wonders if utility in the industry has leveled off, as many OEMs have resorted to adding features to phones of dubious value (e.g. air gesture, smart scroll, screen mirroring) and calling them innovations.
They argue that smartphone hardware is following the typical pattern of diminishing marginal utility, and may be approaching the point of near-zero marginal utility. This incidentally puts the onus of incremental utility on software and services since hardware has little room to improve.
Screen resolution has become a major selling point for smartphones and laptops alike, but high-end products have already attained “full-HD” levels. Apple Inc. (NASDAQ:AAPL) markets its retina display as having pixel density high enough such that the human eye cannot detect pixels at a typical viewing distance. While some would argue that, the claim is at least close enough to true. Therefore, we can deduce that ultra-high pixel density devices provide no additional value to the consumer.
Smartphone cameras are also approaching the point where additional pixel quality will not make a difference to the user as the human eye won’t know the difference.
So, have we reached peak smartphone? Are software advancements the only useful innovation left?