In a few hours, Tim Cook and company will take the stage at their Cupertino campus and reveal the next generation of iPhone. Until now, Apple has only released one phone each year, but today it is very likely that the product line will expand for the first time. The presentation will begin with Tim Cook talking about how Apple Retail is expanding and doing well along with some statistics regarding their various stores, both physical and virtual.
The successor to the iPhone 5, currently dubbed by the press as the “5S”, will probably have the same external body with much improved internals. The highlights will include an improved camera, even though the current model has a best-in-class shooter, arguably on par or even better than the Nokia 1020. The main attraction will be the introduction of a fingerprint scanner on the home button. I’m not sure how exactly it will be used, but the “S” could mean security this time since the previous S models stood for “Speed” and “Siri”. It’s unclear how far along this feature has been developed for iOS 7, but we could see Passbook integration with the ability to store and use credit and other payment cards, as well as other important personal information.
Today will also likely see the introduction of the so-called “cheaper” iPhone, currently dubbed the “iPhone 5C”. The “C” could mean color as rumors suggest, but one thing for sure is that Apple doesn’t do cheap. It may be cheaper than the higher end iPhone but it could still retail for $400 off-contract, which translates to roughly $99 with a 2-year contract. They could do one better and make it free but I doubt it. Apple critics laud how overpriced its products are, but they always manage to attract enough people to keep their business going with enough cushion. The internals will likely be taken from the iPhone 5 but the exterior will be plastic to save on manufacturing costs. The remaining feature list will include LTE connectivity, low energy Bluetooth, a 4-inch Retina screen, 8 MP camera, stereo speakers and iOS 7 as the headlines.
iOS 7 has been revealed to developers through several beta builds and if you follow enough Apple blogs, you’ll know exactly what it brings to the table. However, history suggests that Apple has kept some features close to the chest that will be revealed along with the new hardware, ones that are not even disclosed to developers. They will likely be in connection with the above-mentioned fingerprint scanner. Apart from that, I don’t foresee many surprises on the software front. The Apple TV might see an update, but, if anything, it will be software centric. Apps could come to the platform but it’s a welcome long shot at the moment since the blogosphere has been relatively quiet about it in recent months. The often talked about iWatch is a potential “One More Thing” but at most it will be announced with a future release date a few months down the line, similar to the original iPhone, since Apple would rather they reveal it themselves rather than an FCC leaked filing.
iPhone and iOS are mature platforms and so is the overall smartphone market. Apple is in iterate mode now and I don’t see them making enormous changes in this area going forward. At most, next year’s iPhone could finally sport a larger screen. But that’s the way Apple has always operated: it innovates, disrupts the existing market and then iterates its way to large market share until the rest catch up, all the while maintaining its high profit margins. Profit share is what Apple desires and always manages to own and control, just the way it wants. People may critically pan the “iPhone 5S”, maybe even the “iPhone 5C”, but Apple knows what its doing. After having the high-end market cornered, it looks like they want to control the profits at the lower end as well, a lot of which is still on the table around the world. Let’s see how well they do.