MWC – Wednesday Update

As I had predicted with the previous Mobile World Congress post, there really hasn’t been a great deal of buzz produced by MWC this year. Yes, Samsung announced the Galaxy S5, but it’s a technical iteration of the S4, rather than anything groundbreaking. In some ways, this is a sign of the maturity of the smartphone market – devices are settling into the steady 1-2x updates a year based on new hardware that has long characterized the PC industry. In others, it’s an unconscious nod to the economic realities of the smartphone market.

Today, almost everyone who either wants or can afford a smartphone in the first world countries has one. In England, I picked up a phone for about £79 (a used Nokia Lumia 710 2 years ago), and then decent cellphone service from Virgin Mobile for £15 a month on a postpaid setup. In America, my brother has Verizon’s $99 Moto G phone along with a postpaid plan. These are both fully capable phones for initial outlays and monthly costs that most of the population can afford without a second thought.

So the first world market is saturated. Which means growth has to come from those people who currently don’t have smartphones. By and large, they live in Southeast Asia, China, the Indian subcontinent, Africa, South America, and so on. Areas traditionally referred to as third world countries. But with the exception of the economic elite, they don’t buy the Galaxy S5, or the iPhone, or any other smartphone westerners are used to seeing advertised. Instead, they purchase cheap Androids, “smart” featurephones like Nokia’s Asha line, and others in the same price bracket.

The rise of this bracket of the smartphone market is really the story of MWC. Blackberry announced (via their partnership with Foxconn) the Z3 smartphone specifically for the Indonesian market, Nokia brought out the X, X+, and XL Android phones for India and similar economies, and Mozilla announced several new Firefox OS phones, all of which are bargain basement in terms of specs and cost. Even Microsoft announced their big push to lower spec requirements for Windows Phone in an effort to target this market. And then of course there’s the onslaught of Chinese manufacturers, with Huawei, ZTE, Xaomi, etc. all launching new phones, phones that will never come to first world markets, and instead stay at home and in other similar countries.

Much as we westerners like to think we’re the center of the technical world (and we do get all the flagships first), we’re no longer the focus of smartphone companies (with the notable exception of Apple). Instead, they’re all engaged in a race to the bottom, trying to capture the developing world. Now we get to watch them undergo the same changes we did when the iPhone first landed seven years ago.

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