Daily Dose of iQ: The Commoditization of Smartphones. What Does It Mean?

We’re rushing headlong into the era of cheap cell phones,” wrote Mat Honan of WIRED on Friday (May 16). Honan argues that phones like the $129 Moto E or the $80 Alcatel OneTouch Evolve (pictured above) offer a wealth of specs and features without the intimidating price tag.

Budget smartphones aren’t really budget phones anymore. And on the high end, consumers’ expectations of new phones are so high now, it’s hard to impress us with new devices and new features.

It’s gotten easy to get blasé about high end flagship (phones).Mat Honan, WIRED

It’s gotten easy to get blasé about high end flagships,” Honan writes. The processors, cameras, screens, and, increasingly, the apps are all very, very good. We’ve reached the point of incremental improvements. They have parity. You basically know what’s coming, year after year.”

Phones are going through a similar period to what laptops went through a while ago. There are few things to dramatically improve upon in smartphones as they appear today. I think what can be improved on is the use of the device as a hub for your daily life, as a connected device: e.g. the phone as my wallet, car keys, baby monitor, house keys, GPS, etc. Most of this can be done with software, but the integration process is something that the manufacturers could get into. Like what Google is likely planning for Nest, for example.

Smartphones themselves are hard to differentiate now. Your phone’s flexibility as a connected device remains a differentiator.

Flagships aside, Honan is excited about cheap phones. He says the cheap phones are rising and the pricey ones are lacking -- creating parity across devices. Also, with more people around the world (and poorer people in developed markets) getting access to smartphone functionality, there’s a democratization of apps and social media.

These cheap, fast, out of control handsets are something else entirely,” Honan adds. Something new. Something different. Something we can’t really predict. And that’s really exciting.”

I would agree that this is exciting. This means that as an app developer, you can know what your consumers will have in their pocket. You can assume that their phone will be able to handle your application. You can assume that they will have a good camera and data access and an accelerometer, etc. This means that the market is large and relatively uniform -- you don’t have to develop flows for various levels of experience.

As the smartphone playing field levels out, app developers can assume user consistency across specs and features.

There will be weird network effects,” Honan predicts. Unforeseen consequences. Massive business opportunities.”

As the smartphone market becomes more level, you will see consumers making choices more based on OS, price and phone aesthetics than features.

As with most commodities, you buy the one you like, or the one with the most perceived value, or the one that fits your life best.