Date
23 September 2018
Apple is preparing to unveil the successors to the iPhone X, among other products, during an upcoming launch event. Photo: Reuters
Apple is preparing to unveil the successors to the iPhone X, among other products, during an upcoming launch event. Photo: Reuters

Will Apple’s upcoming iPhones prove a big hit?

After Samsung launched its Galaxy Note 9 flagship device earlier this month, smartphone and gadget fans are now turning their attention to Apple, waiting to see what the US tech giant will unveil in its upgraded product lineup. 

Apple hasn’t announced a date yet, but, going by its previous record, we can expect a major product event in September, possibly in the first half of the month.

And buzz is growing that the company, which crossed US$1 trillion in market value recently, will launch three new phones during the fall event, aiming to capture a big slice of the upgrade market.

Market watchers believe two of the new devices — one bearing a 5.8-inch display and the other a giant 6.5-inch version — will come with OLED screens, while the third gadget will be a cheaper 6.1-inch alternative with an LCD panel.

The handsets could be launched onto the market in a staggered fashion over the next two to four months, according to some analysts.

The company will be hoping to seize the underlying demand as well as upgrade potential among customers who had earlier decided to bypass Apple’s existing product cycle that features the iPhone 8, iPhone 8 Plus and iPhone X.

Crucial to the strategy to lure fence-sitting customers will be different price points and features, with emerging markets such as China expected to be a key focus.

The 6.5-inch model, which will be Apple’s biggest phone, would appeal to people who like to play games or watch videos on the go, apart from providing better experience while taking in content from, say, news apps. 

Meanwhile, the lower-priced 6.1-inch device with LCD panel would target consumers who are price-conscious, yet want a large enough screen. 

According to market rumors, all the new smartphones will unlock with facial recognition, which means Apple may be doing away with fingerprint ID.

From a broader perspective, industry observers believe the new models could prompt more users to upgrade their smartphones, especially as many service contracts with mobile operators are due for expiry. 

“We believe 350 million iPhones are in the “window of opportunity” to upgrade over the next 12 to 18 months,” GBH Insights, a market research firm, said in a recent note.

Apple needs to “capture a majority of these units as part of this upgrade cycle to make a clearly successful iPhone product cycle in 2019 and lay the ground for future services and software growth and steady iPhone demand over the coming years,” analyst Daniel Ives wrote.

According to a projection, of the estimated 100 million iPhone installed base in China, 60-70 million units will be in the “upgrade window” over the coming year after the launch of Apple’s new devices.

While there is no doubt a major opportunity, it would, however, be no easy task to convince all the interested buyers into actually shelling out the big bucks. 

As smartphone users have begun to stick to their existing gadgets for longer periods, manufacturers will find it difficult to lure users for upgrades unless the firms offer new gadgets with “wow” factors, on aspects such as design form factor and unique new features.

Apple may have understood the trend, with the iPhone X last year seen by some observers as testing the water for user acceptance of new features such as facial recognition and elimination of Touch ID fingerprint sensor.

The good performance of iPhone X since its debut last November will bolster hopes among Apple executives that its upgraded versions will receive good response as well.

There is quite a lot at stake for Apple as the company has seen slower growth in iPhone shipments overall in the recent past, forcing the firm to take a hard look at the business.

As the industry itself enters a period of maturity and weaker sales globally, Apple may focus more on profitability, rather than unit sales. Hence, efforts will be directed at higher-priced and premium products. 

The launch of iPhone X last year signaled Apple’s shift in strategy from quantity to profitability. The iPhone X, which starts at US$999, helped drive the average selling price of Apple’s handsets to more than US$700 in the June quarter 2018, up from US$600 a year earlier.

Now, the expected launch of two successors of iPhone X, with one featuring a 6.5-inch screen, could help boost Apple’s core business revenue. 

The rumored iPhone X Plus could convince some early adopters of iPhone X to trade up their existing phones for a better user experience. Meanwhile, a cheaper model with 6.1-inch screen can serve the mass-market needs with a price of around US$600. 

What would particularly be of interest to consumers in the developing world is the possibility that Apple may offer dual-SIM versions of some phones in select markets.

If the company makes such a move, it will be welcomed by many people, especially frequent travellers.

And it will help Apple compete better with Android phone makers, most of whom have already made dual-SIM a standard feature in their flagship devices.

Apple cannot afford a wrong step at this point in time, as it needs to shore up its revenues and business growth. 

Success of the new phones will also be crucial for driving Apple’s services income including iCloud, Apple Pay and Apple Music, as well as various digital download services within its ecosystem.

There is, indeed, a lot at stake for the world’s most valuable firm.

– Contact us at [email protected]

RC

EJ Insight writer

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