The smartphone business has generated staggering wealth for companies such as Apple and triggered a recent scramble by Hewlett-Packard and Intel to try for a piece of the action.
But it now looks like its best days may be behind it, a troubling trend for companies here and elsewhere that have hitched their fortunes to the smartphone juggernaut. Although smartphones remain wildly popular, their sales — about $338 billion last year — are growing at a slower pace and their prices are dropping fast, making it harder to wring a profit from them.
That comes at the worst possible time for Intel, HP and other Silicon Valley companies whose businesses heavily depend upon the personal computer. With PC sales dwindling, they’ve been urgently seeking ways to tap into the smartphone boom, but some analysts think they may be too late. Even mighty Apple is considered at risk because it gets the vast majority of its revenue from the iPhone.
“It’s a huge problem for Apple” and “too little, too late” for HP, which recently introduced two smartphones to help compensate for its sluggish PC sales, said Bill Whyman of the International Strategy and Investment Group. For months, he has been predicting what he calls the “end of the great smartphone boom.”
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