Mohanbir Sawhney is a professor at Kellogg School of Management at Northwestern University.The opinions expressed in this commentary are his own.
Samsung just took the lead in the smartphone race with its newly unveiled Galaxy S20 line.Some of the features include 5G capability, enhanced zooming, a gargantuan 6.9-inch screen and four cameras — a clear leap ahead of the three-camera iPhone 11 Pro.All this comes at a pretty steep cost, with the phones starting at $999 .
As smartphones become more deeply embedded in consumers’ lives, there will be continued demand for further advancements in 5G capability, screen display (including folding screens that really work well), battery life and cameras, among other things.But how long will this race continue? At what point do things become ridiculous? Will six cameras be enough or will it be eight? Will consumers finally stop biting when we reach a $2,000 price point? We have seen similar battles in the past.Just look at the razor.
Since 1971, Gillette has gone from twin-blade razors to five-blade razors.Gillette dominated the market for many years and continued to offer higher-end razors at high-end prices.But when low-cost subscription options, like Harry’s and Dollar Shave Club, gained popularity, things changed.Eventually, Gillette was forced to reverse course by introducing lower-cost razors and beefing up its cheaper disposable shaver collection.
Similarly, smartphones will reach a peak at some point, although it may take longer for smartphones than razors.After all, razors only do one thing.
It’s not like consumers can use razors for lawncare, as well as shaving.Smartphones are multifunctional devices that are swiftly replacing other devices, like our cameras, our televisions, our computers and our wristwatches.That means they can continue to become more powerful and more expensive for some time, though that doesn’t mean they should.More Tech & Innovation Perspectives Facebook’s Libra cryptocurrency is a tool for empowerment.
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For example, smartphones have largely replaced digital cameras, with digital camera sales dropping 87% between 2010 and 2019.Over the same period, smartphones have skyrocketed in price from a few hundred dollars to well over a thousand.In 2016, the Galaxy S7 was priced close to $700; the Galaxy Fold — released last year — with its bendable screen is nearly $2,000.
The Galaxy Fold wasn’t intended for generating sales — it was for buzz.It was clunky and had product flaws right from the launch.Read More Indeed, the smartphone camera is fast becoming the only camera most consumers own.
That alone gives Samsung good reason to take its smartphone camera and display technology to the next level.
The S20 Ultra’s optical zooming is more like a traditional, high-end camera than merely a phone that takes pictures.Customers get the convenience of a camera that’s always in their pocket, without a compromise in performance.Similarly, smartphone displays have higher resolution than most TVs and laptops, and consumers can watch videos wherever they go.But there is a limit to this madness.Innovation should ultimately be focused on the customer.More features don’t necessarily translate into more customer value.To make smartphones even better in the future, Samsung and its competitors will need to focus on solving new problems for customers, not just solving the same problem in a better, faster way.
Otherwise customers will balk at paying ever higher prices for smartphones of the future..