Close to 2000 new models of phones are released every year.
How did this boom come to be?
In this report, we’ll chart the progress of the mobile phone industry from the flip phones of the mid-90s to the smartphones of today.
We’ll also look at the companies that shaped this evolution, and the forces that drove these changes.
The data from this report comes from Semantics3’s Catalog for Mobile Phones (US and UK), unless otherwise specified.
This catalog was built by crawling and curating data from across the web. All in all, we surveyed ~20,000 models of phones.
1995-1998: The Early Years?
The Early Years made the original mobile phones more mobile with innovation in design. Flip phones, colored screens and Snake took the world by storm!
1999-2002: The Functionality Years
The industry shifted focus from what phones looked like to what we could do with them.Camera phones, web browsers and QWERTY keypads made an entry.
2003-2006: The Connectivity Years
With 3G becoming mainstream – enter the smartphone! The mobile phone started to become a genuine alternative tool to access the internet.
2007-2010: The App Years
The iOS vs Android battle led to many thousands of new apps. WhatsApp launched and 4G was introduced.
2011-2014: The Big Tech Years
With smartphone ownership becoming the norm worldwide, standardization set in.Voice search and fingerprint scanning received native OS support.
2015-2018: The Cool-Down Years
The innovation engine slowed down as incumbents fought to stay differentiated. Previously budget Chinese brands laid siege to the premium market.
Today, 80% of households in the USA own a smartphone
How did smartphones become so indispensable?
At the heart of this growth is something called the ”Network Effect”.
When telephones were first introduced, adoption rates were low; there was little value in owning one if your friends and relatives didn’t own one too. Over time though, as number of telephone owners grew, so did the value of owning one yourself.
In the initial period when the number of users is low, the product/network doesn’t offer much value.
BUT, the value of the product increases exponentially as the user base multiplies, even though costs increase only linearly. As the number of users reaches a critical mass, the value from the network far surpasses the potential cost of adding new users.
For mobile phones, the Network Effect was spurred by advances in telecommunication, software development and hardware development.
The Telecom Ecosystem
Faster the growth in mobile penetration, the quicker the adoption of each new generation of network tech. >90% of phones released in 2018 had 4G support.
Jobs in Mobile Development
“Android/iOS Developer”, roles that didn’t exist 10 years ago, are now mainstream jobs…
...driving growth in both the Apple App Store...
...as well as the Google Play Store.
As the number of apps increased, so did the size of these apps…
...resulting in phones with larger storage capacity...
...driving demand for larger screen sizes
On the back of video streaming and gaming-centric apps which require larger form factors
But larger screens drain batteries faster, necessitating larger batteries
These large batteries, in turn, led to phones getting heavier
Compute-heavy apps spurred growth in processor speeds...
...and the rise in number of cores
Similarly, RAM capacity went up dramatically
Developments in sensor technology provided another pillar of growth
Camera quality too was a core focus of phone makers
Digital point and shoot cameras became nearly redundant.
On the OS front, greater network effects lead to consolidation
Over the years, players like Windows, and BlackBerry have been completely subsumed by Android.
When networks mature, a few players become entrenched and difficult to displace. The app and developer ecosystems of Android and iOS make it extremely challenging for smaller players to put up a fight.
How does all of this affect the sticker prices of phones?
We built an ML model to answer this question.Turns out that the attribute that most affects how much a phone costs is the phone’s brand!
This isn’t a recent phenomenon. Brand value has always mattered.
Which brands' logos command the greatest premium?
You guessed it – Apple is #1!
So, what lies ahead in 2019 and beyond?
We’re keeping our eyes on 3 key trends:
- New form factors including foldable phones and sliding displays.
- Arrival of 5G, and whether its rate of adoption exceeds those of previous generations.
- Processors and battery trends in response to the emergence of AI heavy apps.
Download a PDF version of this report here: Evolution of the Mobile Phone Industry
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