When pretty much everyone in a country who wants a smartphone has a smartphone, congratulations – you’ve reached Peak Smartphone.

For many, this is a very happy place to be, this state of universal plugged-in-ness. Let us rejoice! Throw a tickertape parade, take our families for a picnic and post everything on Instagram.

It is pretty remarkable. Less than ten years have passed since Steve Jobs first dangled the techno paradise of the iPhone before us, what with its promise of redemption from missed emails, a permanent connection to the universe (World Wide Web, same thing), and eternal damnation for Nokia. January 2007, that was – a different era.

Between then and now, one in every five humans has begged, bought or stolen a smartphone.

Inevitably, naturally, the rate of growth has slowed as fewer people remain to buy their first smartphone.

In the UK, for example, 88% of 16-24 year olds now have a smartphone, up from 77% a year ago. So the kids are fully on board, although – note – not their grandmas and grandpas, three quarters of whom are active refuseniks, sticking to the perfectly good phone they bought in 2005 – the one they turn off when they’re not using it in case it runs out of battery.

Oldies aside, let’s accept the fact that in many countries, we are at or very near Peak Smartphone.

It’s wrong to interpret this saturation point as bad news for anyone other than mobile manufacturers. The easy times are over for them. When the market was expanding like a dwarf star, they knew that slapping in a faster processor, bigger screen, and more sound meant that Version Four of the same phone (which is 10% better than Version Three) will sell by the truckload, guaranteed, like a Star Wars sequel. Now their growth will be hard-won, coming as it must from stealing market share and increasingly relying upon lakes of marketing cash, all applied to the task of creating distinction without actual difference in the marketplace.

For everyone else, Peak Smartphone is the point where the real magic starts to happen – the unimaginable things this technology will enable us to do now that nearly everybody has one.

Past technologies that have also reached similar levels of near-universal adoption – like continuous domestic electricity, personal automobiles, office computers – went through a similar cycle from novelty, to mass frenzy, to being just wallpaper.

With hindsight, these technologies only really changed the world once they reached that later, more stable, phase. When people began to install electricity at home, it had one application – light. Most of things we now plug in to the wall were not even conceivable to those early adopters.

The same is true of smartphones. Most of the services and applications we have on our phones today do not require everyone to have one. Even the most popular, such as Uber, can work even if a handful of owners exist. These are the lightbulbs of the smartphone era – early applications that show off the platform.

At Peak Smartphone, services will evolve that are predicated on universal usage, which were impossible or simply pointless before now.

Tile, a startup in San Mateo, California (where else?), is one such service (www.thetileapp.com). They sell little Bluetooth tags that you register through a smartphone app and attach to stuff you don’t want to lose – bags, keys, children.

The tags have a maximum range of just 100 feet. Your phone can find your tag if you are close by. Tile, though, creates a cooperative network of all its users. If I have lost my tag, it will be located by any other Tile App within range, and I’ll be notified through the Tile system.

Tile – and other cooperative systems such as Waze (a navigation system that shares traffic data between all its users) – use what economists call a “network effect,” where the value of each person’s membership of a system increases whenever a new person joins.

A service like Tile gets better the more people are using it, and Peak Smartphone creates the potential for such services to make sense in the first place. There are many such services on the Web – Facebook, Twitter, PayPal, eBay – all of which rely on network effects, and all of which took off after the Web reached mass adoption.

Gaming too has services that rely on network effects – Bingo and Poker, obviously. Pretty much everything else in casino and betting may benefit from scale, but they have few real network effects. Linked progressive jackpots may qualify.

It is possible, though, that Peak Smartphone will provide the platform for innovative new gaming products that rely upon network effects, just like we’re seeing outside the industry.

What will they be? Honestly, if I knew, I wouldn’t tell you.

Charles Cohen
GTECH Vice President, Mobile
Mobile evangelist and committed early adopter of technologies of all kinds.


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