Product innovation doesn't always have to be a new feature, or a paradigm "shift" with new technology like AR.

Smartphones could be due for a substantial reduction in price (there's certainly demand for that). Not just hardware pricing, but also carrier pricing.

From a hardware perspective Apple must innovate (or have you believe they're innovating) to keep the product price and profit margins as high as possible. However, as the article points out, the smartphone market is mature. There's not much left to innovate in terms of the "hand held" form factor, other than price, or improving on already available features (better camera, better voice control, wireless charging etc).

The iPod provided good insight into "size", and even when given smaller sizes (like the nano), consumers generally preferred the standard, easier to hold sizes, with displays big enough to read. The Sony WM-10 cassette Walkman from 1983 was about the same size!

Size has been consistent for over 30 years.

It must be getting harder and harder for Apple to spin each revision as groundbreaking enough to pay the same price as last year. Android capitalizes on this. But it's still a pricing monopoly on both sides, which carriers enjoy as well.

When will there be a substantial reduction in price?

Does the capability exist yet?

Phones are quite cheap already(~$140 for a pretty decent xiaomi). The largest share of price of a phone is the monthly bill. It's mostly due to monopolies, so even though there's some news technologies that promise 25x-50x reduction in costs[1] with some of those already availble, it's hard to tell whether consumers will see that.

Another place where the smartphone could help with costs: currently great noise cancelling earphones are very expensive($300) .And in general are well loved by those who can afford them.

but what happens if we remove most of the hardware(cheap) and compute($0 on phone) to the phone ? And create place in the app store for noise-cancelling apps ?

[1]http://5gwnews.com/index.php/90-r/670-wireless-abundance-is-...

The cell phone carrier market is the classic example of a "confusopoly" where the dominant market players make it as hard as possible for consumers to make fully informed decisions. None of the carriers actually has a monopoly outside of a few isolated areas.

https://en.wikipedia.org/wiki/Confusopoly

Acoustics make it impossible to do good noise cancellation using just an app. You really need a specialized microphone mounted directly on the headphones.

Sure you need a high quality microphone on the earphone - but that's men's , could be very cheap in volume. And the rest is something interface chip on the phone, and than some digital logic which is cheap.

It stops working, because the latency is too high for the inverse-phase signal to match up with the unwanted incident signal it's intended to cancel.

You could have a low latency digital processor in the phone/soc. At that level, digital is cheap.

Of course the other part is that high-frequnecy noise is hard to cancel. But still Bose does a great job.

You can't have a wireless round trip with latency low enough to work.

I'm not sure wireless is a necessity for sucsess. sure it's less comfortable, but a lot depends on how much people value silence.