Monday, October 19, 2015

Technological Innovation in Smartphones

Executive Summary

This report was commissioned to identify and analyze the technological innovations that have made a huge impact on the smartphone industry. The research highlights the fact that over the period of 23 years, smartphones have been transformed tremendously. When comparing the World's first smartphone, IBM Simon, to iPhone 6plus and Galaxy 5s, the most important technological reformation is the 3D touchscreen system and the addition of high definition cameras. Other fascinating improvements in smartphones are increased battery life and Internet speed, and weight reduction. The IBM Simon weighed half a kg, had a battery life of 1 hour, and poor Internet connection. However, Today’s smartphones have advanced by at least 10 times from its 1st version. Through innovation, companies are now able to provide extremely light weighted smartphones, battery life of 48 hours, Wi-Fi connection, high speed Internet, and apps. Furthermore, the two leading smartphone firms, Apple Inc. and Samsung successfully retail these innovated technologies through their smartphones. Additionally, the report provides a detailed technical and business analysis, which includes the uses and how the innovations provide competitive advantage to smartphone firms. The report concludes that new innovations are an essential part of the industry’s growth. It is recommended that the industry continue implementing and enhancing technological ideas to provide better products in future.

Overview of Smartphone Industry

Smartphones were first invented as a combination of cell phone and computer. A smartphone had the ability to send and receive e-mails, surf the Internet, and make phone calls. However, with new innovations, smartphones now are capable of performing tasks that even a computer cannot do. The Smartphones industry consists of many cellphones companies. The largest cellphone companies in the Smartphones Industry are Apple Inc. and Samsung. Here is a brief history of each company and their smartphones.

Apple Inc. 
Apple's smartphone journey
  • An American multinational technology company
  • On June 29, 2007, in US, Apple Inc. introduced its first smartphone, the iPhone. 
  • Apple Inc. introduced the iPhone to the rest of the World in 2008.
  • The iPhone stood out from its competitors because of its touch screen, advanced features, and minimal hardware


  •      A Korean cellphone brand, founded in 1983.
  • Introduced its first smartphone on April 27, 2007, called the Samsung Galaxy.  
  • Features of Samsung Galaxy included 3.2-inch touchscreen, auto focus camera with power LED flash, and a digital compass. 

Smartphone Industry's Key Issues and Challenges

Highly competitive industry
The smartphones industry has become very competitive over the past few years. This is because the products of smartphone brands are not so far apart from each other in features, quality and retail prices. With a variety of smartphones, consumers have many choices to buy from. The two largest smartphone firms Apple Inc. and Samsung are the biggest competitors. According to statistics, Samsung is continuously leading as the largest smartphone shareholder of 25.2%, but despite the fact that Apple Inc. has only 11.9% in 2014, it is still taking about 90% of profit in the industry. Both, Apple and Samsung are working hard to beat each other in making higher revenues. 

Rising Manufacturing Cost
Despite the fact that the smartphone industries are making huge profit, the manufacturing costs have also significantly increased.  Statistics prove that the S5 has a bill of materials valued at roughly $256, including manufacturing costs, while Apple’s flagship iPhone 5S cost an estimated $207 to build. An increase in manufacturing costs has caused the retail prices of smartphones to increase, which increases the possibility of declining sales. 

 Technical Analysis: Major Smartphone Innovations

One of the greatest innovations is smartphone camera. The quality of smartphone cameras has improved dramatically of the past few years.  For example, Panasonic Lumix CM1 is currently leading in providing its consumers with the best cameras. It's features include "1-inch image sensor, 20 megapixels, f/2.8 aperture (adjustable), Leica lens, 1080/30p video, OIS, expandable storage, RAW, shutter button.This product has amazing resolution, dynamic range, and colour accuracy. Its front-facing camera can be used as a mirror. Moreover, Apple Inc. uses a similar innovation of cameras in its iPhone 6 and 6 plus. The cameras included in those phones are high quality and very convenient. Such as, the phone models include a mini camera icon on their front screen, through which camera opens up in less than 2 seconds. This technique gives Apple a competitive advantage by increasing flexibility and accessibility of cameras. The firm has innovated the cameras to attract consumers and meet their demands. Also, consumers no longer need to buy a separate camera when they already have a high-quality camera in their smartphone. It is an effective tool to stay connected to the world, also is the most convenient camera. Smartphone cameras allow us to video chat on Skype, post images on Instagram, FaceBook, WhatsApp, and Viber. Most importantly, let's not forget Selfies. Smartphone cameras have made social interaction a lot easier and interesting. These smartphone cameras have brought many small changes to our lifestyle. For instance, this technology enables us to take pictures of coupons, barcodes, grocery lists, photo I.Ds, and lectures on board. The images can work as a memory tool to help remembering things by being able to having easy access to important memories. 

Another important innovation in the smartphone history is touchscreen. A touchscreen is an input device that allows users to control the phone through multi-touch gestures by touching the screen. Furthermore, Apple has taken a step forward by innovating the 3D touchscreen in its iPhone 6s. The technology detects how hard your press on the iPhone screen. It includes the “pop” and “peek” actions, peeking means previewing the content by pressing lightly on the screen, and popping expands the image and blurs the background things. This product is giving apple a competitive advantage compared to others. It is the only company that has introduced this technology in smartphones. The technology has enhanced the firm’s profit by increasing customer demand and interest, which leads to more sales. Touchscreen has increased the flexibility level in typing and making calls. Its soft keys do not get jammed and faster to move around when browsing. It also reduces time and effort in typing and pressing the keypads.

Business Analysis 

Smartphone high quality cameras and touchscreen have brought revolutionary changes to the business world of  the industry. Smartphones were reformed and redefined through these new technologies.Today's consumers are interested in buying  smartphones with latest technology such as the 3D touchscreen. These innovations have dramatically increased profibility of smartphone companies. For example, Apple Inc.'s  iPhone 6 costs $ 200 to manufacture and its retail price is $679, which is almost 4 times the manufacturing cost. An article states that " Apple had a record breaking 93% of the smartphone industry's profit,". The fact that Apple Inc. successfully gained consumers' interest toward 3D touchscreen phones more than other companies, this gives Apple Inc. competitive advantage in the market.  Smartphone camera and touchscreen are iPhones' major assets, they are found in every single iPhone which proves their importance. Through these innovations, the companies have gained the attention and interest of teenagers and young adults. According to statistics, people of ages between 18-34 are the industry's largest consumers.   

According to the five-force model, smartphone's leading firms, Apple Inc. and Samsung's buyer power is very strong. Samsung's buyer power is strong because people have strong customer loyalties to these brands. Also, Apple Inc. 's iCloud is an effective tool in keeping them customers. This tool allows consumers to easily connect their smartphone, MacBook, and iPads. Both firms are effectively manufacturing their products, this proves a good relationship with their suppliers. As for the threat, these firms are the biggest threats to each other due to the intense competition between them. The potential entrants for the firms products would be young people from ages 14-25. This is because this age group is more drawn towards new technology and the products offer a huge variety of apps.


The major technological advances in smartphones have affected the industry in many ways. The competition level between firms have increased, many companies have followed the trend of building touchscreen phones after seeing its successful contribution to Apple and Samsung brand. Also, the technological changes have increased consumer demand; the product advancement has attracted many new consumers. The emerging technologies would make a significant difference in future. The new technologies, such as the touchscreen and camera would be reformed again as new ways of implanting ideas are discovered.The emerging technologies would make a significant difference in future.After being introduced to the iWatch as a smartphone device, we can expect something similar as the images provided. The future smartphones could be transformed in wrist bands, rings, or having images popping out of screens. 


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