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.