Will Samsung Suffer as Smartphones Become Less Innovative?

Back when the iPhone first made an appearance in 2007, there was simply nothing else to which to accurately compare the device. It was the first of its kind, really, an unexpected fusion of telephone and computer all contained within one easy to use and easy to carry package. It largely replaced, for many, several separate devices—from the MP3 player to the digital camera—and shook up the world of work as we knew it even just 10 years ago. But a new report from Frost & Sullivan says that innovation in the smartphone market may be starting to slow up, and it's being personified not by the iPhone, but rather by Samsung's Galaxy S5 smartphone.

A report from Frost & Sullivan's ICT consultant, Lawrence Lundy, notes that the market is in “a sort of stasis now when it comes to smartphone innovation.” Lundy clarifies this statement by noting that smartphone innovation isn't specifically finished, but much of the innovation now will come from software rather than from hardware, as well as the increased use of more and better sensors built into the phones. In fact, Lundy sees a variety of key points emerging as a result of declining innovation in the phone's hardware, and several possibilities in terms of future development that may arise.

One key point Lundy sees is at the high-end consumer level, where Apple has enjoyed dominance for some time and likely will continue so to do for some time to come. Differentiation, as Lundy notes, is “key to success in this segment,” but Samsung will find itself particularly behind the eight-ball here as proper differentiation here will depend more on design and brand rather than on features. With Google actively working to prevent fragmentation of Android, Samsung will have a progressively harder time making that differentiation that would help drive sales.

Meanwhile, at the lower end market, the low end will really only get lower the farther in we go as new brands like Wiko and Micromax step in at the $100 to $200 price segment. These are less profitable segments, so for Samsung, a focus on margins has to come into play to make profit in a less profitable market. The report also took an examination at the long-term prospect, and brought up a topic that, really, few smartphone makers seem to be considering: the Internet of Things (IoT).

The IoT as a whole is fueling spectacular growth in terms of sheer numbers of devices coming out, and that in turn is posing opportunities for smartphone makers to get in on the action. With devices ranging from refrigerators to light switches having some element of connectivity, being able to control all these devices from one central hub could be a very valuable point in a lot of users' day. The smartphone could step in to be that hub, and if Samsung can establish itself early on as the “central control point” of the IoT, then it may have a major competitive advantage over even Apple.

Consider that Samsung already makes a variety of other devices itself, from washers and dryers to, yes, refrigerators. If it's not at least considering this as an option, then there's some serious disconnect between Samsung and the rest of the world. However, reports suggest that Samsung may have one serious impediment to delivering on this: machine learning capabilities. This may be an easy fix, however, and once that particular point is addressed, Samsung may well have the future of smartphones already in its grasp.