EETimes editor Dylan McGrath published a really interesting article today about the demise of the Flip video camera. The article is titled “What’s Next?” and it starts out by exploring Cisco’s sudden termination of the entire product line it got with the acquisition of Pure Digital just a couple of years ago. The Flip video camera was a market leader with a reported market share of 35%. So why kill it? McGrath posits, with some authority, that it’s the oncoming freight train called the smartphone.
McGrath goes on to analyze other portable products that may be flattened next. Music players? Not unless mobile phone data plans reverse their upward cost trend. However, the sales trend for these players is for more expensive devices, not the cheapies.
Digital cameras? Smartphones seem to be eating into the low end for digital cameras, but the cramped quarters inside of a smartphone limit sensor size and prevent the incorporation of a decent lens. So again here, it seems that low-end products will be vacuumed up into the smartphone maw while higher-priced cameras with better margins survive.
Personal navigation devices? Already roadkill according to the article. Shipments are down and the real-time traffic updates inherent in smartphone navigation apps already outperforms what standalone navigation devices can deliver.
If there’s a lesson to be learned here, it’s that smartphones make every mobile category more competitive. Let’s face it, there have been a lot of cheap, undifferentiated music players at the low end of the market. There have been a lot of incompetent but cheap digital cameras foisted on the market as well. My smartphone camera is pretty sad, despite being less than a year old, so it’s not about to replace my high-end compact camera or my dSLRs, but it sure can compete with a $50 compact digicam. The reason for such a digicam ceases to exist in a world full of smartphones.
I think that smartphone-enhanced competition in all mobile categories is a very good thing. Do we really need 100 or 200 or 500 MP3 players all differentiated by the color and shape of the plastic case? Aren’t there better things to spend resources on? I think there are.
EDA360 Insider 
“Apps-driven: Are mobile phones the agents of creative destruction?”
Steve: this article focused on products but could easily be expanded to include social, political, business, etc. Smart phones and their capability to quickly document via video and audio any human interactions around the world and quickly publish via YouTube, Facebook, Twitter, etc are changing how governments, companies, etc are run. The North African turmoil over the past few months is a perfect example. Another is the hockey fight that was posted and used to prosecute to teenagers for their participation. Or a boy that was run over in a Dallas neighborhood that captured the driver, the act and him driving off. I believe these are all positive aspects (helping to solve crimes much faster) but I am sure there are plenty of negative uses for these products that police must also fight (child pornography as an example). Imagine a network of individuals around the world with smart phones. Any one at any time can use technology. It will cause a significant change and upheaval in the media and how ‘news’ is reported.
Bill,
Thanks for the comment. SF author Bruce Sterling pretty well predicted exactly the scenario you are discussing in his 1988 novel “Islands in the Net.”
–Steve
Though smart phones do a lot of different things nowadays, they do all of them poorly. Do I want a phone GPS if I have a much better dedicated device in the car? – Not really. Do I need an MP3 phone player when I have a much better music system in the car? – Not really.
The only killer application that keeps cell phones alive is the ability to make a phone call when no other service is easily available. Since most time people spend is either inside the buildings or in their cars, the survival of cell phones hinges on the availability of voice and data services in those places. As soon as people will be able to insert a SIM card into their car dashboard computer, many will say goodbye to their cell phones. No really, why would anybody want to carry a brick in their pockets and possibly getting some harmful electromagnetic radiation if they didn’t have to? Most people don’t find it necessary to carry even tiniest cameras or MP3 players in their pockets; so if they didn’t need to make calls, they wouldn’t carry cell phones either. Of course, in the places where people spend a lot of time walking, or in public transportation, cell phones will still be in big demand.
Gene, I can agree that smartphones do many things but cannot agree that they do all of them poorly. although my own Droid2 takes such poor photos that I won’t use the camera in the phone, my daughter’s Droid Incredible takes terrific photos and videos. My Droid2 is a perfectly good music player and it’s the equal of my personal navigation device when used for GPS, with the added advantage that it’s battery isn’t dead. My GPS unit’s battery is replaceable, but I have been utterly unable to find a replacement for the proprietary Li-ion battery’s form factor. All products have problems. The better designed ones, whether smartphones or GPS units or music players, have fewer.