Manufacturers must shift to smarter software to stem smartphone decline

Google Assistant and Amazon Alexa illustrate a shift that phone makers must make to continue adding value to devices

Gartner’s latest market share report has found smartphone growth is expected to decline by 1.6% by the end of 2016.

The smartphone segment continues to grow as the market matures, albeit more slowly than in previous years. Gartner noted it’s expected to reach 1.5 billion units in 2016.

The slowdown follows on from Gartner’s previous report for the second quarter of 2016, which showed a decline in sales of smartphones as people defer upgrading.

Bigger screens and higher-resolution displays are failing to provide the “wow” factor needed to attract people to upgrade or buy new smartphones.

The analyst company believes smartphone companies can no longer rely on step improvements to their hardware to sell new devices.

Voice-assisted search functionality driven by deep learning algorithms and artificial intelligence (AI) points to where smartphone technology could be heading.

Apple’s recently launched iPhone 7 has not had a major impact on sales of its smartphones.

“We are seeing Apple going through a normal cycle. I don’t expect the iPhone 7 to trigger a major upgrade,” said Roberta Cozza, research director at Gartner.

Growth is expected to be more likely in 2017, on iPhone’s tenth anniversary. “I think we’ll have to wait until next year, when Apple is expected to redesign the iPhone,” she added.

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“We expect the market for premium smartphones to return to 3.5% growth in 2017, as stronger replacement cycles kick in, and in anticipation of a new iPhone next year,” said Cozza. This refresh could have a similar impact to when the iPhone 6 came out, which she said offered a very tangible benefit to users.

“This future iPhone needs to offer a new design and new features that are attractive enough to convince more replacement buyers,” said Cozza.

The Android market share remains flat, according to Gartner. “Android manufacturers remain challenged,” she said.

“This future iPhone needs to offer a new design and new features that are attractive enough to convince more replacement buyers”
Roberta Cozza, Gartner

Sales of new Android phones are being driven by Chinese manufacturers including Huwaei, but it’s expected many Android manufacturers will suffer unless they move beyond selling hardware.

“Huwaei will have to invest in software and build an ecosystem,” Cozza added.

AI comes to smartphones

In fact, Gartner expected leading manufacturers to follow the lead of Google, with its Assistant built into its new Google Pixel Phone, and Amazon’s Alexa, a speech-controlled user interface.

Samsung and Apple are looking at artificial intelligence too, according to Cozza.

She said a key battleground for Apple in the coming years will be how it extends Siri, its voice assistant software. With Amazon Alexa, Cortana from Microsoft and now Google Assistant, she said it will be key for Apple to address Siri’s development.

“Alexa is the future of search, and smart agents truly have the potential to be the main user interface,” she said.

The assistant technology is able to read email correspondence and understand what the user searches for on the web. Microsoft is also looking at integrating its Cortana technology into office productivity. For example, it could, in the future, be used to understand a Skype call or gather useful information in a Word document.

The technology is evolving all the time, and AI-powered voice-assisted search technology such as Amazon’s Alexa and Google Assistant is seen by many industry watchers as representative of a major change in human-computer interaction.

In a recent demo of Assistant, Google showed how it could be used to call up photos from a particular time or place from the past. It also plays whatever music the user asks for, choosing a favoured music app by default. Similarly, it integrates the Google Now on Tap functionality, allowing users to swipe up with information on the screen, such as a restaurant’s name, and provides further information, such as reviews and an address. Also, like a bot, the Google Assistant can take a reservation using only voice prompts.

Such technology is likely to find its way onto wearable devices first, according to Cozza, given the somewhat limited user interface currently available. Tying deep learning and voice control together does, however, hold the potential to power a new way of using smartphones, paving the way towards AI-enabled personal digital assistants.

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