This day will gain historical interest in the years to come. When the sales of the product that led the last decade of technology is now falling, the games is over. The illusion of growth is going to face reality.
Since the smart phone market in the US is mostly saturated, Apple has been optimistic about growth in China and India. But with China’s economy in decline, the future is no longer certain.
This uncertainty will effects all the growth in the tech sector, because most of the growth in technology is related to the growth of the smart phone. The sales growth of all smart phone vendors and service companies have been riding this wave for many years. Much of the growth in companies like Google and Facebooks was coming from an increase in Ads on smart phones.
In a global recession, a smart phone is not very useful. In the last ten years the smart phone has found little business value. The primary use of the smart phone is for games, contacts and entertainment. In a recession, who can afford a toy?
And the millennial generation is tired of exchanging a home for a smart phone. A $100 phone bill is about how much principle that is paid each month of a 30 year mortgage. The choice is either to live in a high rent apartment with a smart phone or buying a house and forgo a smart phone.
Business value
The future of the smart phone rests on business value. Business applications that increase production or efficiency will determine the future of the market. If Apple has the vision to see this trend, they would move more engineers into making business use of their smart phones.
What this trend means to businesses is that smart phone companies will demand businesses pay more money for the cost of the entire infrastructure, from the data plans to the app engineers to the manufacturing companies like Apple. As consumer usage drops, they will target the businesses to pay more. The businesses that use smart phones are currently enjoying low prices because the cost is spread out by the number of people using them as toys.
The increasing costs will put further pressure on the businesses that use smart phones to evaluate how much value they are really getting from the adding cost they are being asked to pay. And this in turn with roll back to the manufactures to justify the business value of their products.
What this trends means to consumers that use smart phones as toys is that they will want lower costs, maybe $5-10 month with only basic features like texting and a camera. This will remove the need to purchase a new phone every year, which will remove the profit margin of the manufactures to innovation new features for new versions. In a few more years, the smart phone will get commoditized by the lowest cost producer with the minimum features who will survive by being better at downsizing their business then their competitors.
In ten years the smart phone will be mostly history.