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Rational early adopters unite!

Picture1 At what point does yearly incremental innovation in the mobile device market cease to be enough to drive yet another customer purchase?

And what will happen to the market once we the users stop getting excited about incremental innovation?

I'm a lifelong early adopter.  I was the first person I knew to own a CD burner.  I owned one of the first TV tuner cards.  I owned the original flash card and CD based mp3 players.  I even owned a second and third generation mp3 CD players, rejoicing when they introduced text capable screens.  I owned the original Archos Jukebox hard-drive mp3 player.  I owned a Virtual Boy.

I love my iPhone 3GS.  It does everything I want it to do.  While I enjoy the games, 12 months later I'm primarily hooked in the utilities and entertainment options.  News, sports, photos, video, audio, email... this phone does it all.  My phone has grown from a shiny object full of fun games into something I rely upon to enhance my day to day life.

Having joined the Cult of Jobs, I've salivated over every leak around the iPhone 4.  I bought into the hype.  When it was first announced I started rethinking my spending priorities, wondering how I could possibly talk myself into buying the crack without getting hooked into a contract.

Then I woke up.

$500 is a lot to spend on a phone/entertainment device that is only slightly better than my existing device.  Sure it does a lot more than just talk, but does it do enough new things better than my existing solution (the 3GS) to deserve this significant an investment?  Not really.

I want an iPhone 4.  I don't need an iPhone 4.  And I certainly don't have $500 burning a hole in my pocket.  This thing will be outdated in a year, setting the early adopter tax at about $40 a month for a unit with minimal improvements.

And I'm sure I'm not the only person going through this.

The growing rationality of early adopters will be a challenge for Apple in the years ahead.  The first few models of each new device offer drastic improvements.  The later generations however, offer incremental improvements.  At a certain point I won't need the latest and greatest, much as I don't need an Apple personal computer.  I don't even need an HP or a Dell.  The PC market has become commoditized enough that there are many brands selling more than capable, well designed devices for a fraction of the cost.

While the mobile landscape is evolving and growing, the pace of hardware innovation is slowing.  We're nearing a plateau of hardware innovation.  If brands want to continue to drive incredible hype, excitement and purchase, they are going to need to think beyond the hardware.  Because at this point, the new just isn't that special.