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What Will Drive Smartphone Market Now?

What Will Drive Smartphone Market Now?
by Pawan Fangaria on 12-09-2014 at 7:00 am

Whenever a market matures, either it gets plagued by substitutes or it looks for complementary products or technologies which can fuel its maturation curve into further growth opportunities. While PCs and Notebooks got substituted by smartphones, there is no other device in foresight to substitute smartphones. The reason is smartphones have inherited many functions from other devices including communication, computing and consumer applications. Communication and computing being two powerful functions ‘on the go’ have provided huge boost to smartphones in the hands of consumer which has attracted other applications to get into smartphones. Now smartphones are ready to further displace other devices such as remote controls for TVs, ACs, and Cars and so on. People are tired of having so many remote control devices; they would prefer to use just their smartphones from anywhere they like!

Guess, what will drive smartphones to take control of their own destiny – it’s IoT. IoT will enable smartphones to control all other devices in consumer, home, personal, security, automotive, healthcare and other spaces.

IC Insights is correctly predicting cellphones to be the largest driver for IC sales; and wireless and IoT to exhibit the fastest growth for next five years.

In its reportfor 2013-2018, IC Insights predicts strongest IC sales growth in subsystems for IoT and wireless networks; while IoT is expected to grow at CAGR of 22.3%, wireless ICs can grow at CAGR of 19.7%. Similarly, the systems sales associated with IoT are expected to rise at the fastest CAGR of 21.1% (in another graph). And cellphone ICs will continue to top the IC sales share at $70.7B.

This foresighted trend is being reflected in the strategies of leading semiconductor companies. Last week, I was studying about Samsung’s plans after major fall in their profit from phone business. Samsung is putting major emphasis on IoT which will stitch together most of their other businesses and generate benefits across their product lines – Smartphones, TVs, computers, watches, cameras, fridges, washers and dryers and so on.

Lee Jae Yong of Samsung has established collaboration with Intelto develop and strengthen its own operating system, Tizen; joined Thread Group, led by Google’s Nest Labsto build home automation; and signed global patent licensing agreement with Ciscoto strengthen connected devices systems. They acquired SmartThings who specializes in developing mobile applications that remotely control household devices.

Samsung has massive plans to setup chip manufacturing for wearable and connected devices. They have already setup a large Innovation Museum (in a five storied, glass walled building) that signifies smart living and inspiring. There are booths to demonstrate connected life in hotels, shopping malls, offices, living rooms in homes, airplanes and so on. And everything is controlled through your Smartphone; for example, you can check-in into the hotel by pressing a key on your Smartphone without waiting in the queue, warm your oven or clean your room before coming home, check all security and condition of your home even after leaving from there, all from your Smartphone.

Samsung is not alone; Qualcommhas low power wi-fi platform that connects major home appliances to the network; IntelQuark plans SoCs that are smaller and low power than atom to support IoT; Applehas HomeKit and HealthKit; Google Nest provides thermostats and smoke detectors that can be managed through smartphones. GEforays into industrial internet with portfolio including equipments, internet-linked sensors and software to monitor and control performance. Cisco provides network convergence system that enables fabric suitable for IoT.

Next era will be for IoT enabled smartphones; IoT will drive Smartphone market into a new growth trajectory and retain the fortunes of these phone and wireless companies as well as those which enable smart things to be done through IoT and smartphones. Comments welcome!

More Articles by PawanFangaria…..

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