(Repeats to widen distribution)
By Stephen Nellis
SAN FRANCISCO Feb 23 When Apple Inc
launches its much-anticipated 10th anniversary iPhone this fall,
it will offer an unwitting lesson in how much the smartphone
industry it pioneered has matured.
The new iPhone is expected to include new features such as
high-resolution displays, wireless charging and 3-D sensors.
Rather than representing major breakthroughs, however, most of
the innovations have been available in competing phones for
Apple's relatively slow adoption of new features both
reflects and reinforces the fact smartphone customers are
holding onto their phones longer. Timothy Arcuri, an analyst at
Cowen & Co, believes upwards of 40 percent of iPhones on the
market are more than two years old, a historical high.
That is a big reason why investors have driven Apple shares
to an all-time high. There is pent-up demand for a new iPhone,
even if it does not offer breakthrough technologies.
It is not clear whether Apple deliberately held off on
packing some of the new features into the current iPhone 7,
which has been criticized for a lack of differentiation from its
predecessor. Apple declined to comment on the upcoming product.
Still, the development and roll-out of the anniversary
iPhone suggest Apple’s product strategy is driven less by
technological innovation than by consumer upgrade cycles and
Apple’s own business and marketing needs.
"When a market gets saturated, the growth is all about
refresh," said Bob O’Donnell of Technalysis Research. "This is
exactly what happened to PCs. It's exactly what happened to
tablets. It's starting to happen to smartphones."
Apple is close-mouthed about upcoming product features, but
analysts and reports from Asian component suppliers and others
indicate that high-resolution displays based on OLED technology
-- possibly with curved edges -- are likely to be part of the
anniversary phone. A radical new design is not expected,
according to analysts.
Some of the anticipated new technologies, notably wireless
charging, remain messy. Samsung Electronics Co Ltd
phones, for example, feature wireless charging but support two
different sets of standards, one called Qi and the other
Apple recently joined the group backing Qi. But there are
still at least five different groups working on wireless
charging technology within Apple, according to a person with
knowledge of the matter.
As to 3-D sensors, there is already one hiding in the iPhone
7. The front camera features what is known as a time-of-flight
sensor, which helps it autofocus and is used in numerous phones
including the Blackberry, according to TechInsights, a firm that
examines the chips inside tech devices.
That sensor could be upgraded to a higher-resolution version
that could handle 3-D mapping for facial recognition, said Jim
Morrison, vice president at TechInsights.
Some analysts also speculate the company could remove the
phone's home button, placing it and a fingerprint sensor beneath
the front display glass, based on patents the company has filed.
Global smartphone sales were up only 2.3 percent to 1.47
billion units in 2016, according to IDC. Many carriers in the
United States have stopped subsidizing phones, causing phone
buyers to think harder about their next purchase.
Apple will likely make a heavy marketing push around the
phone’s 10th anniversary. “IPhone set the standard for mobile
computing in its first decade and we are just getting started.
The best is yet to come,” Chief Executive Officer Tim Cook said
in a statement Jan. 8, the date the iPhone was announced by
then-CEO Steve Jobs in 2007.
In 2015, the last year it disclosed the figure, Apple spent
$1.8 billion on advertising, up 50 percent from the year before
and nearly four times the $467 million it spent in 2007 when it
first released the iPhone.
And the company continues to excel at selling higher-priced
phones. Chief Financial Officer Luca Maestri attributed the most
recent quarter's record-setting 78.3 million iPhones sold to the
iPhone 7 Plus, which for the first time included a new dual
camera feature not found in other models.
The iPhone 7 Plus tops out at $969 with memory upgrades and
a jet black finish. O'Donnell of Technalysis Research believes
that with the next iPhone, Apple might even introduce a
$1,000-plus “ultra-premium device for the real Apple-crazed
folks out there who want to stand out."
(Reporting by Stephen Nellis; Editing by Jonathan Weber and