Lefsetz Letter – Galaxy S8

Replacing your mobile phone today is like replacing your computer, something you used to do every couple of years and now do every six or seven. You see the functionality is good enough. Now it’s solely about fashion.


The days of cool hardware are done. The focus is on what the hardware, which is good enough, can do. Software reigns. And not only productivity apps software, but music, art, anything that can be accessed/streamed.

This has been obvious for years. I’ve said this ad infinitum, but once the iPod, and then the iPhone, was able to handle all the forms of media that we can access (music, text, photo, and video), and was able to run apps, including demanding games, there was nothing else to do. The only real improvements in phones any more is in the cameras, and most people don’t care about that; the camera in their current phone is good enough.

The future is about software, but even more about services (i.e., software on a server). This is why Apple is investing a lot on that part of the equation. Only those who want to be cool really need the latest smartphone, be it from Apple or Samsung. But this is why the hardware companies and carriers have introduced subscription pricing for phones, along with a new device every 12 months. Because without it, people will realize that they don’t need to pay all that many to refresh their phone.

Source: Lefsetz Letter » Blog Archive » Galaxy S8

4 thoughts on “Lefsetz Letter – Galaxy S8

  1. I waited years to buy a smart phone, because I didn’t really need one. Then, last week, I bought a Samsung J (Galaxy Luna), simply to get cheap — and I mean cheap — service ($99 a year for 1200 minutes per month, with rollover). And it’s not a stripped-down device. At just $70, it has a lot of the features of expensive phones.

  2. I’m almost certainly not going to replace my iPhone 6S this fall (it will be two years old); it still works great and does everything I want to do with it (2 GB RAM and 64 GB flash was a big improvement over my 5s). Just like the replacement cycle for the iPad is stretching out to 4-5 years, I think that the phone replacement cycle is moving to 3+ years – the H/W is that good now.

  3. Yes, smartphones (iPhones especially) are built to last a long time. But new applications have in the past and will in the future require not only better/faster hardware, but also hardware components that didn’t exist before.

    For example, Augmented Reality is going to be a huge advance in both productivity and entertainment. But AR will require processing power and hardware components that will only be available in future iPhones.

    Another example is AI. There will be soon be versions of AI that will make current voice activation seem antiquated (think along the lines of Iron Man’s “Jarvis”). But it too will require newer hardware components and much faster processing than we have now.

    Both of these examples will be paradigm changers as much as the first iPhone was in 2007. And there will be other physical advancements (example: smartphones that fold out to tablet size) that will also be major changes in future smartphones.

    Saying that no one will want these advancements, and that a current smartphone is all that anyone will need in the future, is like those computer users in the 1980’s who said that only “real” computers use a command line and a monochrome display, and considered new computers with a Graphical User Interface and WYSIWYG as being just “toys”.

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