The End of the Smartphone Era as We Know It

AT&T CEO envisions a world without smartphones

Nothing lasts forever. So what comes after smartphones?

It’s hard to picture a post-smartphone age. Take a glance at pedestrian traffic anywhere in the world: heads are down, staring at screens and fingers are busy tapping away. In most developed markets, smartphone penetration rates have reached an effective 100%, for all tweeners and seniors who want one, have one.

Last week, during a talk at The Economic Club of Washington D.C., Randall Stephenson, CEO of AT&T, spoke about a world with no smartphones, among other topics. He pointed out that in an advanced 5G environment, computing power and storage can be shifted away from personal devices to the cloud. In this architecture, devices will no longer need powerful and larger processors. Devices will evolve into the 5G environment.

At the very end of his talk, Mr Stephenson said he envisioned “moving into a world without screens”, explaining that devices will become less intrusive. He pointed to his eyeglasses as a possible substitute for a smartphone.

The head of AT&T made this statement in passing, but, nevertheless, it shows that it’s something that one of the largest mobile carriers in the world is at least investigating. And at some point, something will come next.

This isn’t the first time that predictions have been made about wearables and a new generation of pervasive computing devices disrupting the status quo, replacing not just the mobile hardware we use, but also changing user behaviour. But now, more than ever, the pieces of the puzzle are coming together for some big changes.

We’ve written before about the disruptive potential of 5G networks and parallel moves to shift the cloud closer to users and devices. The high throughput and lower latency that 5G will deliver over the coming years is set to be a big enabler of pervasive computing. The industry talks about edge computing, but once 5G is established, the implication will be that connectivity is truly ubiquitous. To a user, the network will feel omnipresent and edgeless.

More natural and immediate access to applications and services through new devices and interfaces will be a major focus. But the big question is who will lead this, and more importantly, generate the revenue. Carriers will play a significant role in creating the network, but it’s the web platforms that are poised to benefit from frictionless connectivity and abundant intelligence. What’s critical for AT&T and others is a change to the 4G dynamic. It’s not sustainable for carriers to make the network investment only to see the application and service value flow elsewhere.

For strategy groups that prepare companies for change, AT&T just provided a useful thought exercise. If its CEO is correct in his thinking, even if this outlook only partly comes to fruition, the long-term implications for the mobile value chain would be significant, altering the businesses of component suppliers, app developers, mobile service providers and device makers. Mr Stephenson’s priority needs to be ensuring AT&T is at the heart of the value chain, not just a marginal player at one end.