Creative destruction and the smartphone

News that Cisco is closing down its video camera subsidiary, Flip, only 2 years after paying $590 million for it is another indicator that smart phones are leading a new wave of creative destruction in the digital world. Why bother carrying a separate video camera when your smart phone can shoot high definition video?  This has already happened with PDAs; Palm stopped making standalone PDAs a while ago.  iPod sales have been falling for a while now as users prefer their music on their phones.  For Apple this is not such a problem as they dominate the music software and online retail space which integrates with their iPhones. However, if I was a manufacturer of portable MP3 players I would be looking to diversify into other areas. Portable GPS device manufacturers for vehicles and runners such as TomTom and Garmin know that the writing is on the wall for their mass market products.  TomTom make a successful iPhone app so are better placed than some of their competitors.

So who is next?  There are only so many things that a smartphone can do but I would have thought that cheap still digital cameras will go the way of Flip.  Audio dictation devices and calculators could also be on the chopping block.  Have I missed anything?

While this may be bad news for some companies it is good news for consumers.  In "The Future of the Internet" Jonathan Zittrain worries that the rise of internet appliances threatens innovation as the ability for third parties to build functionality on such devices is limited.  While some smart phones may not be "generative" in the sense that the PC has been for encouraging creativity from third party software developers they are certainly more likely to stimulate innovation than devices such as the Flip or a satnav.  The iPhone Camera+ app is a good example of this.