Feature Article

September 10, 2013

Apple's Big Day - A VERY Big Day for iPhone Mobile Innovation

The long, long wait is finally over – and the Apple iPhone news is finally out. And the news is good. The new iPhone is now the iPhone 5S. It comes with a faster processor and…the much talked about fingerprint sensor. But is there more? Yes.

First was the usual Tim Cook opening act of presenting sales numbers, App Store/retail footprint and iTunes subscriber numbers and a roundup of other related numbers, and news on the upcoming iTunes Festival (demand is off the charts, Cook says, with 20 million requests for tickets to date). SVP of software Craig Federighi got up next and more or less recapped what iOS 7 is all about – there is nothing new here, and notes that in a short few days hundreds of millions of devices will be running iOS 7. OK, no surprises here.

But yes, it has over 200 new features and will become available on Sept. 18, 2013. The new OS will be available on the iPhone 4 and 4S, iPad 2 and above, the iPad mini, and the 5th gen iPod touch. We’ll follow up on our breaking news report with a detailed analysis and related numbers later today.

Next, SVP of sales and marketing Phil Schiller got up on stage and got the news we really care about. There are now “two new iPhones” – the brand new, polycarbonate-based 5C in five colors, color-coordinated cases, and built on a new steel-based structure that also forms the camera. $99 will be the price for the 16 GB version and $199 for 32 GB. The colors of course are related to the new iOS 7 color scheme. 5C preorders begin Sept. 13, 2013. China is front and center – the 5C will roll out on the same day in China.

The new 5C will replace the traditional Apple approach of taking the pre-S iPhone and making it the cheaper iPhone model. The new 5C will become Apple’s new global phone that will work across most if not all LTE networks, including China’s. Aside from the new cellular LTE capabilities, the internals of the 5C are essentially the same as the iPhone 5, along with the iPhone 5’s A6 chip.

From there we’ve now jumped to the brand new iPhone 5S. First things first – color combinations: white or black, backed with gold, silver or “space gray” (a sort of graphite color). No, there will be no black-backed iPhone 5S.

As expected, the new iPhone 5S will sport the new A7 chip, which is a 64-bit design. It will clearly be a lot faster than the iPhone 5. That is a very welcome upgrade though we need to wonder how or if it may affect battery life. We can expect both hardware and iOS 7 optimizations that will likely maintain the same battery life as the iPhone 5.

Next comes the camera – complete with a new Apple designed 5 element lens. And no, Apple has not packed more pixels into it – instead Apple has opted to deliver “bigger” pixels! Well, hello, a nod to the HTC One’s approach, and we are happy with this even though it is not an “innovation” Apple can claim to own. We believe the large pixel approach is the right way to go. Schiller suggests it is “SLR” level but, in fact, it isn’t remotely close to being any such thing. There is as well a new flash that manages color temperature in a very interesting new way. We’ll save the details for photography and video (including a new slow motion capability) for our follow-up detailed article.

Security!

Schiller has finally come around to what we can now look at as something new to the iPhone – though hardly a surprise. The new capability, Touch ID, will scan your fingerprint (thumbprint) and immediately unlock your phone for you. It scans in 360 degrees and is able to learn multiple fingers. Finally, Apple has put its AuthenTec acquisition to good use. We’ve had interesting experiences with fingerprint scanners (sometimes they do not work!) but we need to assume at this point that Apple has done enormous levels of testing with this and would not put it in the market unless it was five 9s reliable. We won’t know until the phone hits the street.

Consider this – the scanner eliminates the swipe screen and will also allow for rapid purchases on iTunes and the App Store. The fingerprint info will never be posted to the cloud and will deliver the most secure access capability of any smartphone. It’s all integrated into the same home button, but we have now moved from the familiar square to a new round icon on the home button. Finally, the scanner will allow for multiple IDs and multiple fingerprint scans – we don’t yet know if different fingerprints will be able to be matched to different settings but we certainly hope so! Finally, Apple will not allow developers to have access to the scanner APIs, at least not any time soon.

We’ll skip the $39 case discussion. The rest of the pricing stays true to form, with the 16 GB version coming in at $199, the 32 GB version at $299 and the 64 GB version at $399.

The bottom line here is that we need to applaud the iPhone leak-meisters! There was absolutely nothing announced that we did not know about. Were the announcements “innovative” in any way, shape or form? Yes – the new iPhone 5S is a much better phone. Much faster, a clearly advanced new security feature, and the same 4-inch screen (not playing the ever-larger screen size game is an innovation in itself), along with the new camera technology. Yes, we will be making some acquisitions of the iPhone 5S.

We truly won’t know until the combination of iOS 7 and the new iPhone 5S hardware features are put to real use that we will know if it was worth the wait. The WOW factor falls far short of the old Apple WOW factor, and in truth there is nothing here aside from the fingerprint scanner that is not available elsewhere. That said, we believe that iOS 7 is going to deliver on the WOW factor once users begin to put the 5S to real use. We predict that iOS 7 is going to prove a game changer and that the iPhone 5S will go along for the ride.

And let us not forget the 5C. Some analysts will think the price of the 5C is too high – but that will not prove to be a factor in China.

The bottom line – we reiterate our prediction for an amazing post-holiday season Apple earnings report.




Edited by Alisen Downey


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