There were few major surprises at Apple’s keynote in Cupertino yesterday as they unveiled two new phones at two different price points and for two distinct purposes alongside a host of minor feature releases.
The iPhone 5S was the expected announcement. It will follow the 4S product cycle Apple have developed and replace the existing iPhone 5 model as the standard handset sold by retailers and subsidized by networks.
Despite unveiling no major changes to the form factor of the device, Apple were keen to stress two important new features that the 5S possesses: Primarily it was the biometric finger sensor that stole the show – Positioned as a ring around the home button, its main selling points are that it removes the need for any kind of password on the device alongside Apple’s promises to users that they will be able to create up to 7 profiles (for other family members for example) and that their corresponding profile data and preferences will be stored alongside their biometric data.
The second 5S reveal that raised more than a few eyebrows was the announcement that it will feature an 64 bit A7 CPU with 1 billion transistors (just 400 million shy of Intel’s Ivy Bridge range of desktop CPUs) – based on a highly customized version of ARM’s ARMv8 chip architecture; alongside the 64 bit iOS7 Apple are promising desktop-level performance increases of more than double their previous system-on-chip (SoC) design (the A6) and exciting new prospects for gaming with the OpenGL ES 3.0 standard as a result. Note that Apple have in the past year ratcheted up their marketing for gaming on their devices precisely because of its status as the most profitable part of the App Store.
Apple’s new, ostensibly “low-cost” iPhone 5C came as more of a surprise but it’s something that has still been mooted as a possibility for some time.
The price point, announced by Apple, will stand at an initially off-putting £469 outright, but subsidized carrier deals will drive that price down to around £60 to £160 depending on whether you pick the 16gb or 32gb model, this was largely achieved through a range of cost-cutting measures, such as replacing the traditional aluminium bezel with a range of plastic ones, and employing an A6 SoC instead of the A7 featured in the 5S.
Apple’s intention behind this move is fairly clear, after losing ground in the Chinese market to cheaper Android smartphones they feel that it’s a necessity to establish some kind of foothold and the only way to do this in China, and other developing markets, is to compete on price-point, as the consumer market simply doesn’t possess the requisite per capita wealth to ensure Apple respectable market share off the basis of their premium products alone, therefore, losing ground to ever-more competitive Chinese manufacturers like Oppo, Lenovo and Huawei and hoping for wage-growth to catch up with the price of their devices simply isn’t an option.
The new design of Apple’s overhauled mobile operating system, with its now characteristic flatness and iconography redesigns, was unveiled back in June by Tim Cook, but it finally received a release date of the 18th of September at the Cupertino event. Apple spent their time yesterday talking more about the features and updates of iOS7, having covered the somewhat striking design changes already at numerous press events.
Chief among these were a newly refined Siri system, that enables App launching plus a recognition of the need to better facilitate voice recognition for non-American accented English. Interestingly however there was no news about the much maligned Apple Maps feature, despite some throwaway comments that developers had been “making great improvements” to it. This could signal at a future upgrade to Apple Maps as distinct from the iOS7 release.
At this early stage prior to consumer release it’s wise to be hesitant of making broad and sweeping statements, but based on the reactions of analysts and the general public across social media, there are some points of success and general debate that we can highlight.
Firstly, the biometric feature was probably the most successful announcement of the event. It corresponds to, and answers real concerns about device security by implementing it at a hardware level whilst also enabling an individual 5S to become a multi-user device (the stock example given is for a family naturally, but this certainly carries some truth to it). It was also perhaps the most well-received unveiling at the event, with even IDC’s Research Director Francisco Jeronimo pitching in, describing himself as “impressed” by the prospect of swipe recognition.
On the other side of the equation, there are questions about the value of the value of a 64bit SoC in a handheld mobile phone device. The extra addressable memory that 64bit chips afford in desktop devices is mainly used by professional enterprise software tools like CAD, and in terms of low-level kernel interfacing it’s questionable whether iOS7 will actually use the new instructions afforded by the new SoC at all. And on top of all this, the quoted performance increases may be somewhat dubious (to put it lightly).
In spite of this, Apple have gone way to answering these concerns by pointing out specific examples, such as the OpenGL ES 3.0 standard, where the new A7 will have a large and very demonstrably performance increase over its predecessors. But perhaps more broadly, the real unsaid and unseen advantage of the A7 is that it ends up future-proofing Apple’s SoC range when more than 4gb of RAM starts to become standard in mobile devices.
The iPhone 5C is undoubtedly the most problematic area of Apple’s strategy. As explained above, it is clear that Apple are attempting to break into developing markets on the basis of price by undermining Google and Android-based OEMs but there’s some confusion as to whether the price-point in developing markets, given that the phone retails outright for $550, is competitive enough to dislodge Samsung/Android’s dominance. More worryingly for Apple, they run the risk of devaluing their reputation as a go-to company for premium quality products by releasing a phone that is, at the very least, a cost-cutting variant of the premium iPhone 5S. Certainly some analysts disagree with this possibility, with Ramzi Yakob, a strategist at Th__nk stating that:
Apple’s brand is tactile. It lives in the premium quality of the devices it produces and the spaces in peoples’ minds that light up when they hold one in their hands and feel content that their purchase decision is beyond question. Nothing that Apple has announced today will have a negative impact on its brand. The iPhone 5C is (objectively) a beautiful object with the appropriate amount of desirability to attract entrenched Android users. The premium customer is going to be satisfied that the 5S is differentiated appropriately to make them feel good about choosing it. But the secret weapon, is the (now) humble iPhone 4S. At free, on contract, it has flown under the rumour radar and may prove to be Apple’s most effective way to break into the huge Chinese and other emerging markets.
My own feeling is that Yakob is being too optimistic for the reason that the iPhone 5C represents a “low-cost” option in a way that visually clashes and contrasts with Apple’s high-end devices (the colourful plastic bezels are the best illustration), that, alongside Apple’s marketing of the product as a low(er)-cost device, compound to devalue the brand somewhat. In spite of this, Apple had to make a move on developing markets with a lower-cost smartphone sooner or later, or risk losing any significant presence there altogether.
More broadly, two particularly salient question emerge from this event that will only be answered over a period of some years. Firstly, and perhaps more negatively: With the 5C announcement and an expected phablet design for a variant of the iPhone 6, is Apple more of a market-follower than a market leader now? Or alternatively are our expectations of Apple too high in that we expect them to announce truly “disruptive” devices on a continual and annual basis?