The New iPhone

Every year, Apple has a big iPhone event where they announce their latest handset. Every year, the consumer tech, media, marketing and mobile industries get very excited. And every year, I tell myself that I'm not going to add to the noise of chatter, misinformed speculation and poor analysis.

And pretty much every year, I give up and post something at the last minute. 2013 is no exception… So, too late to be a part of the conversation and too early (at least, I think so anyway…) to be a snappy reaction…

Is the iPhone 5 "good enough"?

Last year, I said that the interesting thing about the iPhone 5 was that there wasn't a clear "interesting thing" about the iPhone 5.

But one thing that is a little different is that this time, there isn't really a 'headline feature' that is a unique selling point for the latest iPhone;
* Original iPhone – multitouch screen
* iPhone 3G – 3G, GPS, App Store
* iPhone 3GS – Main selling point was Speed – faster processor, faster networking, better camera. But it also introduced a built in compass, which enabled Augmented Reality for tech nerds, and better maps/navigation for normal people.
* iPhone 4 – Retina display, new design.
* iPhone 4S – Siri, iCloud
On stage, Phil Schiller said that every element of the iPhone 5 has been improved – display, wireless signal, voice processing, speakers and earphones have all been refined, physically the handset is thinner and lighter, yet the processor is faster and battery life is the same. […] If the story is that everything is improved, then nothing is truly different.

For the iPhone 5, I guess it was the taller screen (nice - but a selling point?), new dock connector (again — nice for a few reasons, but not going to sell handsets), LTE (only supported on one network in the UK until a few weeks ago). Smaller, thinner, lighter… All in all, good reasons for someone out of contract to buy the iPhone 5 over the older and cheaper iPhone 4S — but not quite convincing enough for me as an iPhone 4 owner to justify £600+ for the additional handset and contract commitments.

So far, the new iPhone rumours sounds quite similar; incremental improvements (and a fingerprint scanner), but no major hardware features, unique to the new handsets (as opposed to being a part of online services or iOS7.) The 3GS and 4S were incremental updates — "the same, but different." So it seems reasonable to expect the same for a 5S.

Which means figuring out what Apple's story tomorrow might be seems a bit trickier than usual, without a strong product story to tell…

"Designed by Apple in California."

Apple's WWDC conference sets the tone for the new iPhones, as Apple tells iOS (and OSX) developers what they need to know to get their apps ready for release date. This year was a particularly notable one, with iOS7 bringing a complete overhaul of the visual design as well as the usual new APIs.

Breaking from the usual format for an Apple event, the WWDC keynote opened up with a video – a public statement about their new brand signature, "Designed by Apple in California". For a brand well-known for their product-centric marketing, this seemed like an unusual departure — a message that is purely about the Apple brand.

At stratechery.com, Ben Thompson had this to say about Apple's intended audience;

The truth about the greatest commercial of all time – Think Different – is that the intended audience was Apple itself. Jobs took over a demoralized company on the precipice of bankruptcy, and reminded them that they were special, and, that Jobs was special. It was the beginning of a new chapter.
“Designed in California” should absolutely be seen in the same light. This is a commercial for Apple on the occasion of a new chapter; we just get to see it.

I think the way that Apple Inc. have set out to define the Apple brand says something about how they want to differentiate themselves from their competitors. While its easy to focus on the "…in California" part (which isn't something many of their competitors can really compete with), its the 'Designed by…' part that is probably most unique to Apple; they build everything from the CPUs and the devices that they sit in (at least for their mobile products), right through the software that powers them, the applications that run on them — and increasingly, the services (iCloud, Maps, iMessage etc.) that they use.

Presumably, the iPhone 5S will include a new chip at its core. It seems a safe bet that it will be called the A7. But the key point here is that while Google/Motorola and Microsoft/Nokia are getting their OS and hardware integration lined up, Apple are designing everything from the CPU to the interface. This gives them something to talk about from a marketing perspective (ie. "Designed by Apple, in California" — nobody else is designing the whole product in the way that Apple is doing).

Why is that so important?

Well, 5 years since the iPhone 3G really changed the smartphone market, it is now getting mature. By which I mean that most people buying smartphones today are smartphone owners already — they have a clear idea what they want. They aren't buying into the idea of "smartphones" - they are buying into a particular platform, whether that is iPhone, BlackBerry, Windows Phone, Galaxy etc. The 'early adopters' of 2008-2009 (iPhone 3G/3GS or early Android devices) will now be, assuming a 2 year smartphone contract/lifecycle, looking at their third device. They know what they want, what they don't want, how much they value it, and what it means to enter into a 2 year contract commitment in a fast-moving market.

Now, I've deliberately left Android off that list, because I don't think its something that "normal people" see as a platform. Samsung — the most significant manufacturer of Android phones in the western market — don't even use the Android brand in their marketing materials. Have a look at the HTC One website and see if you can find out what version of Android it runs on. I can confidently predict that it will be hard to miss "iOS7" on Apple's iPhone page after today's event.

Android simply isn't a meaningful brand to the people selling the devices, and it isn't a meaningful brand to the people buying it. And for those who it is meaningful to, then they are probably more interested in the Nexus brand, which promises an 'Android as Google intended it' experience; hardware designed by HTC/Samsung/LG, software designed by Google. But not Motorola, who design Android phones and is owned by Google… Oh - and then there is the "Google Experience" brand for non-Nexus devices that still have the stock Android OS and…

Android clearly has market share, and might even have devices that are as good as the iPhone. But it has issues with a fragmented marketplace, causing issues for developers, which causes quality and usability issues for users. Even the branding is fragemented.

My question is whether there is another opportunity here — something that Apple can do with a complete overhaul of the iPhone today (ie. new hardware and new OS) that the Android ecosystem wouldn't be able to reproduce? I don't know enough about the hardware side of things, but it feels like there is a space for innovation here — maybe its stripping the hardware down to its bare essentials to make the most power-efficient, thinnest and lightest device. ("iPhone Air"?) Maybe its some new service running at a level so deep in the internals that it would take years for an OS/Hardware partnership to reproduce?

'Value' model.

I saved the "obvious" stuff until last, because the rumours are all but confirmed that the iPhone is going from a "last years 'Great' model is this years 'Good' model" strategy to a "two new iPhones" line up.

In 2009, I said that the interesting thing about the iPhone 3GS's launch was the fact that the iPhone 3G was also remaining on the market - how this marks a split in the iPhone product line from being a "premium" smartphone to a "regular" smartphone with a "premium" alternative. - although the 3G was only available in its smallest storage option, it meant 2 phone choices with 4 different price points.

When the iPhone 4S was released (2 years later), the iPhone 4 and 3GS stayed on the market (in the smallest storage option only) — so 3 iPhone choices with 5 different price points. The pattern was the same with the iPhone 5 launch last year, so the options today (at the end of the "iPhone 5" cycle) are;

  1. iPhone 4, 8Gb, £319
  2. iPhone 4S, 16Gb, £449
  3. iPhone 5, 16Gb, £529
  4. iPhone 5, 32Gb, £599
  5. iPhone 5, 64Gb, £699

If the pattern were to continue, then you would expect to see the line up with an iPhone 5S/6 (or whatever it will be called) as;

  1. iPhone 4S, 8Gb, £319
  2. iPhone 5, 16Gb, £449
  3. iPhone 5S, 16Gb, £529
  4. iPhone 5S, 32Gb, £599
  5. iPhone 5S, 64Gb, £699

But it seems pretty clear from the rumours that something different is happening - we will be seeing an iPhone 5S and an iPhone 5C. If the 4S were to remain, then we would be left with an old phone with an old screen size, an old dock connector and old (2.1) Bluetooth support. Given a year on the market (and a 2 year lifespan), I don't see this happening - I don't think Apple want people to be buying accessories with the old dock connector in 2016. (It seems like a pretty safe bet that the iPad 2 will be retired this month for similar reasons.)

And 8Gb just isn't enough any more. With some music and videos and a reasonable collection of apps, 16Gb becomes pretty tight pretty fast. So, assuming the 5C isn't just a "smallest space" model, my guess is that we will see something like;

  1. iPhone 5C, 16Gb, £319
  2. iPhone 5C, 32Gb, £359
  3. iPhone 5C, 64Gb, £449
  4. iPhone 5S, 32Gb, £529
  5. iPhone 5S, 64Gb, £599
  6. iPhone 5S, 128Gb, £699

I say "guess" — there is a lot of speculation about price points, based on things like subsidy values and the Chinese market — neither of which I will pretend to understand. But it seems to me that a "new" phone will outsell an "old" phone at the same price; Apple is doing very well out of the iPhone, and changing a successful balance in a way that might pull high-value customers into the low-value alternative model just doesn't make sense to me. (But like I said; I don't pretend to understand the Chinese and network market forces…)

Incidentally, although the names seem to be accepted as truth, I wouldn't be surprised if they turned out to be purely internal codenames rather than the brands to be marketed — 2 new phones that aren't really "new" but updates on last years model seems like an odd move (especially considering the iOS overhaul.) Those of us who see the name as a meaningless label when you're getting entirely upgraded internals seem to be outnumbered by those who see the most important things about the phone as the name and casing design.

The other thing that I haven't seen anyone address is what the "new" naming pattern would be — ie. what happens next year? Will we get the iPhone 6 and 6C? Followed by the 6S and 6…CC? 6D? Or maybe next year will be a new naming system - the "new iPhone" and "iPhone mini"?

Who knows. Whatever Apple's plans for next year are, it seems a safe bet that they already know what they plan to offer going into today's event. Whether or not we will get a hint of it remains to be seen.

… and the rest

The space that I think is going to be really interesting isn't so much the phones and software as the accessories — what happens when your phone is talking to your TV, your stereo, your home lighting, your fridge etc.

At WWDC, Apple opened with a demo from a new company called Anki; announcing the launch of their company, using iOS development platform and devices "to bring artificial intelligence and robotics into our daily lives".

The commentary I've seen since the event seemed to be fairly dismissive of what is essentially a 3rd party apps and accessories developer showing off something that looks like a hybrid of toy cars and computer games. Perhaps it's down to simple confusion — why was this first up? Is it a toy, or a game, or a tech demo? If its a game, how do you play it? If its a toy, isn't this kind of AI a bit over the top just to entertain children for a while? (And therefore, won't the price tag be a bit much for the toys market?)

But despite the actual demo hardware, this company doesn't really seem to be about toys or games to me. This is about the power of an iOS device to do much more than run apps and surf the web, and how 3rd parties are building on this platform to do something a bit different.

While Google are talking about their project to build self-driving cars for around $150,000, Apple have shown how an iPhone can control a bunch of cars in real-time (albeit in a highly controlled environment.) I don't think anybody is thinking about putting their phone in control of their car, but the fact that a modern smartphone is even capable of this kind of data processing and wireless communication should be food for thought for anyone thinking about where this technology is heading. The focus for the last few years has been on handsets and apps — I'd love to see what happens if the industry shifts its thinking to what can be done with accessories.

Oh - and one more thing. iOS7 — lovely, "flat design", but with some interesting 3D layered effects, responding to your movements… Isn't anyone else wondering whether a 3D retina screen would be a possibility?

No? Just me then…

Info
Written by Scott Thompson On