Smartphone makers looked for a way forward at MWC 2023

by Ana Lopez

The delay was inevitable of course. Nothing stays hot forever, especially in this industry. Smartphones have done well by technical standards, but in recent years device makers have been looking for the magic bullet to help turn sales around. The arrival of 5G was a nice reprieve, but next-generation telecom standards don’t arrive every year.

It’s too early to say for sure whether the move to repair appliances amid new and proposed legislation will have a meaningful impact, but it was a highlight at this year’s show, which HMD made a central thesis. Regardless of how many people take advantage of the ability to repair their devices at home (or have them repaired by a third party), it’s another potential pain point for the industry’s growth.

Nokia booth at MWC 2023. Image Credits: Brian Heating

Foldables have seemingly met a lot of expectations (specifically for Samsung), but not nearly enough to really move the needle. Phone manufacturers have a refresh problem. For a long time, phone purchases were tied inexorably to carrier subscriptions, so the devices followed a two- or three-year cycle. Of course, the types of financing agreements that allow you to spend less up front have a way of getting you paid in the end.

There seems to be a looming sense that carriers and manufacturers are trying to return to something similar with a new name.

“I think there will be more movement towards models where devices themselves are sold more as a service,” Google’s Sameer Samat told me this week. “I think there’s a lot of innovative work going on on the carrier side of figuring out how you buy a device up front for less, you use it and return it after a certain amount of time and you get another device as part of your total subscription.”

OnePlus

Image Credits: Brian Heating

In a world where we don’t own our movies, music or software, the concept of hardware as a service is quickly emerging as its own path forward. Like moving from physical albums to Spotify, it has tradeoffs.

No doubt some consumers will jump at the opportunity to upgrade hardware without thinking, but is not owning your phone the same as not owning a CD or record? Will these end up costing us much more? And at a time when most manufacturers tout percentages of recycled materials, how much more waste will this model create?

There’s also a sense that phone makers have effectively painted themselves into a corner. The annual one-upmanship ultimately benefited consumers with much better devices. I’ve said this many times, but these days it’s hard to find a bad phone for over $500 – there are more and more good ones for less than that too. These days, a “budget” device often means settling for last year’s best chipset.

Better phones last longer, both in terms of durability and future-proof features. Having a phone three or four years old today doesn’t mean the same as three or four years ago. This is also partly due to the fact that innovation has slowed down. It has become a battle of centimeters. When was the last time you saw a truly revolutionary upgrade from last year’s model? Do moderately better screens, cameras, or even batteries drive so many people into impulse buying?

“The smartphone market initially grew because there was a really innovative product that was helpful to customers,” Nothing’s Carl Pei told me in an interview this week. “Now it’s starting to dwindle, because my phone is good enough. Why should I upgrade?”

A colorful 'Metaverse' logo is displayed atop a booth at the MWC 2023 trade show in Barcelona

Image Credits: Natasha Lomas/businessupdates.org

If we look at it more broadly, none of this is necessarily a bad thing. It means better products for consumers, as well as a slowdown in the massive waste caused by millions of people buying a new device every two years. We all tacitly understand why companies and shareholders hope such cycles will continue forever, but many of us are glad they don’t. Businesses need one of two things: either reverse the slide or shift focus to other revenue streams.

“There will always be new phones being sold,” says Samat. “But I think you’re getting to the point now where this is their primary computing device for a lot of people. So there are other and more interesting ways to look at the market. I think in terms of what can you do with these devices? What does engagement look like? What are the services you use? And how is it integrated with other areas of your life?”

The writing has been hanging on the wall for a while. The slowdown predates the pandemic, but the past three years have certainly accelerated the trend. Closures, unemployment, inflation, supply chain constraints – you know the drill. Forward-thinking companies have invested heavily in content plays. That certainly paid off for Apple and some of the competition as well. There were times when wearables and smart home devices seemed to help stop the bleeding, but while both have done well for manufacturers, there’s not the same sense of ubiquity.

6G is nothing but a number of different companies vying for adoption of their particular solution, so we’re looking at years before the first devices arrive. At a conference that likes nothing more than to hype a new technology, the possible replacement of 5G just justified a single panel.

Mike, who was on the panel, notes:

The first thing you will notice is that it does not arrive quickly. The projections are that people like you and me won’t get 6G in our hot little hands until about 2030, so it’s best to hold back your anger for now.

Does anyone else feel it’s 50/50 between the 6G and Mad Max scenario for 2030? OK, maybe it’s just me. Still, that feels impossibly far away and doesn’t do much for either of these companies in the short term.

Oppo’s Find N2 Flip at MWC 2023. Image Credits: Brian Heating

Maybe collapsible items have a lot more juice in them? If MWC was any indication, manufacturers certainly believe it. It seemed like every company had one this year. Well, everyone but nothing.

“Personally, I think foldable products are supply chain driven innovation and not consumer insights,” Pei said. “Someone invents OLED and can make a lot of money because it’s a great technology. After a few years, many more companies do so, so they have to lower their prices. So they need to figure out what else they can sell at a higher margin. They develop flexible OLEDs that they can sell for a higher price.”

Image Credits: Brian Heating

Sometimes it’s hard not to be cynical about this sort of thing. Ditto for concept devices, but as I noted in my “ode to weird tech” post, as someone who follows this stuff for a living, I’m a fan of weirdness for weirdness’s sake, whether it’s the roll-up Motorola Rizr screen is or the OnePlus glowing coolant. Certainly following the lead of the automotive industry in creating concept devices is a trend that is only likely to become more pervasive.

OnePlus COO Kinder Liu told me this week that gauging consumer interest is one of the “multiple reasons” his company is dabbling in the concept. He added: “We also want to encourage continued innovation within our company.”

Pretty much everyone I interacted with this week echoed the sentiment that smartphones are in a rut. However, for the first time, it’s not a foregone conclusion that there’s a way out.

Learn more about MWC 2023 on TechCrunch

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