The Phone is Dead: What’s Next for Mobile?

For decades, the smartphone has reigned supreme as the central hub of our digital lives. But a growing chorus of voices, including prominent venture capitalist Jon Callaghan, co-founder of True Ventures, suggests this era is nearing its end. Callaghan boldly predicts we won’t be using smartphones as we know them in five years – and potentially not at all in ten. This isn’t mere speculation; it’s a core investment thesis driving True Ventures’ strategy, a firm known for identifying and backing disruptive technologies before they become mainstream. The future of mobile isn't about incremental improvements to the phone, but a fundamental shift in how we interact with technology.

True Ventures: A Contrarian Approach to Investing

True Ventures has built a remarkable track record over its 20-year history, managing approximately $6 billion across its funds. Unlike many venture capital firms that prioritize self-promotion, True has cultivated a low-profile, focusing on building deep relationships with repeat founders. This strategy has yielded impressive results: 63 exits with gains and seven IPOs from a portfolio of around 300 companies. Their success isn’t about chasing hype, but about identifying fundamental shifts in user behavior.

Callaghan highlights that three of True’s four recent exits in the fourth quarter of 2025 involved founders who had previously partnered with the firm, demonstrating the power of long-term relationships and a shared vision. However, it’s his forward-thinking perspective on human-computer interaction that truly sets him apart in the current landscape dominated by AI buzz.

The Inefficiency of the Smartphone Interface

“We’re not going to be using iPhones in 10 years,” Callaghan states unequivocally. “I kind of don’t think we’ll be using them in five years – or something very different that’s a little safer – we’re going to be using them in very different ways.” His reasoning centers on the inherent limitations of the smartphone as an interface between humans and artificial intelligence.

The current smartphone experience is inefficient and disruptive. Simple tasks like sending a text or email require pulling out a device, navigating menus, and manually inputting information. This process is prone to errors and interrupts our natural flow. Callaghan argues that the smartphone is a poor conduit for seamless interaction with increasingly intelligent systems.

Betting on New Interaction Paradigms

Driven by this conviction, True Ventures has been actively exploring alternative interfaces – encompassing both software and hardware solutions – for years. This proactive approach mirrors their early investments in companies like Fitbit (before wearables were mainstream), Peloton (despite initial skepticism from other VCs), and Ring (even after rejection from “Shark Tank”). Each of these investments was predicated on a belief in a more natural and intuitive way for humans to engage with technology.

These weren’t easy bets. Callaghan acknowledges that each investment initially appeared questionable, but they were all based on the potential to fundamentally change how people interact with the world around them.

Sandbar: A “Thought Companion”

The latest example of this thesis is Sandbar, a hardware device described by Callaghan as a “thought companion.” In simpler terms, it’s a voice-activated ring worn on the index finger designed to capture and organize thoughts through voice notes. Sandbar isn’t attempting to replicate the functionality of devices like the Humane AI Pin or compete with the health tracking features of Oura. Its singular focus is to excel at one crucial task: capturing fleeting thoughts.

The goal isn’t passive recording, but rather to provide a readily available tool for capturing ideas as they arise, acting as a digital thought partner. The device is paired with an app and leverages AI to enhance its functionality. Callaghan believes Sandbar represents a fundamentally different approach to interacting with intelligence.

The Importance of Vision and Team

True Ventures’ decision to invest in Sandbar wasn’t solely based on the product itself. “When we met Mina [Fahmi], we were just absolutely aligned on vision,” Callaghan recalls. True’s team had already been exploring alternative interfaces for years, making targeted investments in the space. They had engaged with numerous founders, but the approach of Fahmi and Kirak Hong – both previously involved in neural interfaces at CTRL-Labs (acquired by Meta in 2019) – stood out.

“It’s about what [the ring] enables. It’s about the behavior it enables that we will very soon realize we can’t live without.” This echoes Callaghan’s previous observation about Peloton: “It’s not about the bike.” The bike was merely a vessel for enabling a new behavior and fostering a sense of community.

Disciplined Capital and the AI Boom

This philosophy of investing in new behaviors, rather than simply new gadgets, also informs True Ventures’ approach to capital allocation. While AI startups are raising massive funding rounds at sky-high valuations, True remains committed to its core strategy of writing seed checks of $3 million to $6 million for 15% to 20% ownership in startups they identify early on.

Callaghan emphasizes that True will continue to raise funds to support promising ventures, but they have no interest in pursuing massive fundraising rounds. “Like, why? You don’t need that to build something amazing today.”

He acknowledges the potential of AI, stating that OpenAI could soon be worth a trillion dollars, and recognizes this as a significant wave of computing power. However, he also expresses concerns about the capital-intensive nature of the current AI boom, particularly the circular financing deals and the projected $5 trillion in capital expenditure on data centers and chips. “We’re in a very capital intense part of the cycle, and that is worrisome,” he notes.

The Future Lies in the Application Layer

Despite these concerns, Callaghan remains optimistic about the future. He believes the greatest value creation will occur not in the infrastructure layer, but in the application layer, where new interfaces will unlock entirely new behaviors. This aligns with True Ventures’ core investment philosophy: identifying and backing companies that are fundamentally changing how people interact with technology.

Callaghan’s investing philosophy is rooted in a simple principle: “It should be scary and lonely and you should be called crazy. And it should be really blurry and ambiguous, but you should be with a team that you really believe in.” He believes that five to ten years is the timeframe needed to determine whether an early-stage investment is truly successful.

The Trend Lines Support the Thesis

True Ventures’ track record of identifying overlooked hardware opportunities – fitness trackers, connected bikes, smart doorbells, and now thought-capturing rings – makes Callaghan’s prediction about the demise of the smartphone worth serious consideration. The trend lines support his thesis: the smartphone market is largely saturated, with growth hovering around just 2% annually, while the wearables market – encompassing smartwatches, rings, and voice-enabled devices – is expanding at double-digit rates. Something is undeniably shifting in how we want to interact with technology.

As reported by GearTech, the wearable technology market is projected to reach $93.8 billion by 2028, growing at a CAGR of 13.8% from 2021 to 2028. This growth is fueled by increasing consumer demand for health and fitness tracking, as well as the development of more sophisticated and versatile wearable devices.

Pictured above, Sandbar’s Stream ring. For more insights from our conversation with Callaghan, tune in to the StrictlyVC Download podcast next week; new episodes drop every Tuesday.