Iteration Over Innovation: The Need to Change the Smartphone Design Cycle
I have admitted this before, but I watch a lot of tech YouTube content. It is perhaps a statement on my tech obsession, but there is another reason why I watch these videos. I am often inspired by the commentary from some of these creators. This was the case the other day as I was watching an excellent video from tech personality, Juan Carlos Bagnell. The video was an open letter to smartphone manufacturers, to stop making phones every year and instead to focus on a 2 year refresh period. I thought Juan made some great points in the video, and have some thoughts as to why Android phone manufacturers should take this approach.
The Auto Industry Model
Maybe living in the Metro Detroit area for the last decade and a half has done this to my mind, but I often feel that there are a lot of parallels between the auto industry and the cell phone industry. Both products are essential to most people’s way of life, both have a retail dynamic that is reliant on direct and indirect selling, and most people are very uninformed on the nuts and bolts of the product. With that being said, one thing that the automotive market does well that the smartphone does not is the realization of when to do a design refresh of a product.
Generally speaking, people keep a new vehicle in their possession for about 6 years according to AutoTrader. As a result of this buying trend, cars are redesigned about every 5 years. What does this mean? Auto manufacturers notice that people aren’t upgrading their cars with regularity every 2 years, so there is no need for a massive overhaul year over year. The massive overhaul should only come when most people are looking for another new car. The added benefit of this is universal parts and accessory support. Usually, many parts for a series of a car is in a year range as opposed to different parts for each year.
The auto industry, in this sense, understands the buying habits of the consumer. The same understanding cannot be said of Android phone manufacturers. There is an expectation within these companies that there needs to be a change year over year to create demand. We may have reached a point where there is not enough innovation being achieved to make a year over year upgrade, so companies do the next best thing and tweak the design just enough to make the newer phone appealing and incompatible with previous accessories. And while companies have been getting away with this for a couple of years, the consumer is starting to see this as a fallacy.
More Money, More Pressure
We are well aware that a new phone is released by a manufacturer like clockwork every year. If you are a gadget nerd like I am you even know the time frame. A new Galaxy S phone from Samsung in February or March, a new LG phone sometime in the spring, a new Google Pixel in October, and a new iPhone in September. And with every one of these releases, the company’s put on a show demonstrating the new capabilities of their latest and greatest and why you need to throw away your old phone and buy this new one.
The only issue is that people aren’t buying it. According to a Strategy Analytics poll, many Americans are holding off on upgrading their phones. The primary reason for this has been increasing phone prices. As phones continue to be priced over $1,000 a lot of consumers have decided that the upgrade over a previous is simply not worth it. Ironically, it is this new purchasing habit that caused manufacturers to iterate even more. Let me explain.
Manufacturers have fully leaned into the higher phone prices at this point. To justify these prices, they feel that they must offer the end-user some sort of upgrade to feel that the upgrade was deserved every year. The pressure to justify the $1,000 phone is why slight design changes are made and why companies are in essence charging for the same phone twice. Smartphone marketing of new products is centered around hype building. How this small new feature will be life-changing, and how we must spend $1,000 to merely experience it. However, as phones have become better as the category has matured this type of hype marketing no longer works. There is a better way.
The Two Year Plan
Here in the US, most people still buy their phones through carrier plans. The appeal to the customer is obvious, pay an interest-free amount monthly over 24 months and the phone is paid off. Most people are comfortable with this, which means that people are conditioned to keep a phone for two years. This was the case back when phone contracts were en vogue. The mass amount of people have always agreed to pay for a phone for two years.
The yearly upgrade has been something that has been designated for tech geeks to try out the newest upgrade from a Galaxy S10 to a Galaxy S20. The mass majority of people do not care enough about these small upgrades to make a new purchase year after year. It would appear then, that the companies making these phones are fighting a losing battle while only catering to a very small population of tech enthusiasts. And the ultimate irony of that is that it is the tech enthusiast who more than most is not willing to spend over $1,000 for a smartphone. It is that budget consciousness of the enthusiast that has propelled OnePlus to its preferential status in the last few years. So what is the solution to all of this? Release a new phone every two years instead of one.
On the surface, this sounds crazy. Why would a company make less product and risk losing sales? The reality is that most people upgrade every two years, making the point of the yearly upgrade a bit pointless. Additionally, most upgrades that are happening these days are in the software and machine learning realm more than the hardware. Let’s take a look at some manufacturers releases in recent years and realize that the buzz around a phone would have been more meaningful if the in-between device was skipped.
Samsung: The Korean giant releases phones like clockwork. But in recent years, the upgrades have been few and far in between. Consider the development of the Galaxy S 6 thru 10. Four different models all sharing similar design DNA. If the company had gone from the S6 directly to the S8, and the S8 to the S10 there would have been a more impactful feature improvement. Even considering something as simple as the fingerprint sensor. This update cadence would have introduced authentication mode on every release, which is a feeling of a new feature as opposed to a year after year of iteration.
LG: The company’s V series phones have always been the go-to for content creation. But in recent years there has been a case of over iteration with the V line. If the company had skipped the V50 in between the V40 and V60 then there would have been a real reason to upgrade. The V60 introduced a better solution for dual-screen accessories and camera upgrades over the V40 that would make the upgrade worthwhile.
OnePlus: The company that made its name by “never settling” has been settling more recently when it comes to phone design. Recently, the Chinese firm released its new OnePlus 8 series that truly feels like the most modest of improvements. So much so, that most people are suggesting foregoing purchasing the device and getting a discounted OnePlus 7T instead. Had the phone not been released, and instead had the 7T as the default phone for another year while new ideas were developed, then perhaps the reception to a new phone would have been more than simply lukewarm.
Hit Me With An Update
As hardware innovation has started to peak, the real race for differentiation has been on the software front. This has been the case across all manufacturers. The inclusion of AI into the camera, battery management, and other areas of the phone experience has come front and center. As this continues to be the driving force of innovation, the need for new hardware becomes less and less important.
If we were to expand upon the two-year model for a moment and use Google as an example. When the Pixel 3 launched in late 2018, it shipped with Android 9.0 Pie and a great camera. In the time since then and through the launch of Pixel 4 there have been countless software improvements to the user interface and camera with features such as gesture navigation and astrophotography mode. If Google had delayed the Pixel 4 an additional year all of these improvements would have been made available to the Pixel 3 and increased the value proposition of that phone. Delaying the Pixel 4 an additional year would have given Google more time to refine the design of the product and to make sure that Soli was more than just a gimmick to change songs on Spotify.
Additionally, as it relates to the state of software updates on Android a longer release cycle ensures that a manufacturer can update software more effectively. Android fragmentation is often mentioned as a detriment to the platform. A reason that a lot of companies use as an explanation for a lack of updates is that there are so many phones and models to keep updated. By reducing the frequency releases from annually to once every two years, this excuse goes out of the window. This comes down to quality over quantity. The focus on a device for 2 years without distraction from the new device in a frantic release and development cycle ensures a better experience for the user.
Over the years, I have heard many Android fans complain about how all of the “good cases” were exclusive to the iPhone. There is a reason for this, iPhones sell very well and fit across multiple generations. Consider someone that bought an iPhone 7 years ago. If they decided to upgrade to an iPhone SE today, they could still use the case on their new phone without much issue. The same cannot be said for any Android phones on a year by year basis. And this also factors into a hesitancy to upgrade.
The ability to continue using the same accessories on phone factors into many peoples buying decisions. By trying to reinvent the wheel every year, a built-in nuisance is added to a majority of the smartphone buying public. By keeping one design as the standard for 2 years or possibly more, accessory makers have more reason to keep making and designing accessories for a phone that will be relevant for a longer amount of time.
This is especially the case for smaller manufacturers like LG and Sony. By keeping their phones as a top priority for two years instead of one, there is an opportunity for companies like Speck, Tech21, and Incipio to make more accessories for a phone that will be in rotation for a longer period. In the case of LG, if there was a longer point of focus for two years for a phone like the LG G5, perhaps the modular accessories for that phone would have lived longer than they did. The lack of proper accessory support is a reason that many smaller phone manufacturers find struggles especially here in the United States where buying cases and accessories is a part of the phone buying experience.
The Test Company
Now the concept of extending the time in between releases sounds great in theory, but what company will take the plunge to do it? There is a very well established cadence currently for many smartphone makers. Most Android phone makers will release anywhere between 4–10 phones per year for sale in the United States every year at varying price points. What company could take the risk of releasing every 2 years instead of every year? The company would need to be relevant enough to warrant such a move so that others would follow. This company should be Samsung.
Samsung is a market leader in smartphones here in the US. As the default Android manufacturer in many people’s eyes, what they do matters. Samsung releases 2 flagship lines every year and as a result, every OEM not named Google does the same (LG G & V series, Sony Xperia 1 & 5, OnePlus 8 & 8 Pro, etc.). Samsung has reached a point of iteration on their phones. The Galaxy S20 was a small improvement over the S10, Note 20 seems to be following the same trend, and even in the mid-range, the Galaxy A51 has been seen as a lateral move compared to the A50 from last year.
Samsung is at a point of maturity in its smartphone cycle that has led to people simply asking for a new Galaxy smartphone without much context. It is a unique situation that other Android manufacturers do not enjoy, a benefit from Samsung’s massive marketing budget. By maintaining a familiar design for 2–3 years more accessory makers that already have a good relationship with Samsung can expand their portfolio with the company. This will cause a ripple effect in the industry and other companies will follow suit. A company that may be the first to follow suit is LG.
LG and Samsung are two companies that are forever linked. As neighboring competitors in the South Korean market, the two companies often mirror one another in release patterns. In terms of smartphones, the company’s strategies tend to be similar. Therefore, if Samsung were to switch to a 2-year release window, there is a good chance that LG would follow. Combined, the two firms account for 30% of the smartphone market share in the United States. This is a sizeable chunk of the market that can influence other companies to do the same.
The simple reality is that smartphones have entered the maturity stage of the product life cycle. The need for a yearly design refresh cycle is no longer relevant. The innovation simply is not happening at that rapid of a pace any longer. The product category has shifted from mass innovation to refined iteration, and it is time for smartphone manufacturers to react to the buying habits of their customers. Samsung can lead the charge, but there needs to be an industry-wide change.