I’m sure you have heard it, or maybe even based a business on it. The idea that “legacy”, or “low spec” or “dumb” mobile phone handsets will soon fade away, as everyone upgrades to iphones, blackberries, androids and the like. The fairytale continues with the implication that this will leave the market open and desperate for whatever web-in-your-hand application is being pitched at the time.
The saddest part of this story is that the same assumption has been trotted out for years, and the promised smartphone dawn has never come. Headlines shouting about billions of devices and the huge potential of mobile business can easily be read the wrong way. Globally, cheap and simple communication devices are still outselling all kinds of smart phones. Even in developed areas the proportion of users with smart phones is tiny.
The much touted 11% or 12% smartphone sales does not translate to 11% or 12% smartphone users. Current figures estimate between 4 and 6 billion active mobile phones, but smartphones are only in the tens of millions. This means that phone users are buying ten times as many “dumb” phones as “smart” ones, and there are hundreds of basic mobile phones in use for every one smartphone.

Image by Esthr
A bit of thought should help explain why this is the case. It’s a truism that people are different, and the mobile phone market has expanded to its current size largely by exploiting those differences. Advertising targets individual devices at every identifiable niche: the budget-conscious get cheap and simple, the style conscious get broad colour and accessory choices, business buyers range from sedate to pretentious, and all the other options which pack out a typical phone retailer. If what drives the sale is the colour and the association with a celebrity, why cut into your profits by jamming in expensive smartphone features? If what drives the sale is the low cost of rental, why cut into your profits by including copious data transfer?
That seems compelling enough, but even so it does not include the enormous number of older, limited devices already in use. Many reasons, including cost, familiarity, and general lack of desire to change, act to ensure that existing handsets will not go away any time sooner than a generation or so.
Basing a business model on the dream that everyone has, or will have, a smartphone merely leaves you fighting with all the other similar dreamers for a fraction of an already miniscule market. Worse than that, a market already flooded with free (or mostly free) products and services. Sure, there are a small number of people making quick cash in the iphone application market. But remember that there are also a lot of people making money selling ringtones, images and the like for old, dumb phones. And a whole lot more people losing money in these same areas.
It can be a tough choice, but for me the key value-add for any business which wishes to make a profit in mobile is to realise that mobile devices merely form part of a much broader picture. Break down the imaginary walls between device types: web users typically find it easy to click, drag, scroll and type, users of simple phones generally find it easy to speak and listen, or perhaps send SMS text messages, or even USSD. Set-top box users might find it more comfortable to view rich video information while pressing next, previous, play, and fast-forward buttons on a TV remote. And yes, smartphone users may prefer to poke a screen with a stylus, or swipe it with finger gestures.
Once you step back from the assumption that smartphones are a single market for an isolated product, you have the freedom to evaluate the markets, costs, timescales and return on investment of providing support in your application for all these different types of devices, and grow your customer base organically into untapped areas.
As a sound bite: Make smart choices, don’t just assume smart phones.