Intelligence Brief: The new iPhones - what we know and what you should be looking for - Mobile World Live

Intelligence Brief: The new iPhones – what we know and what you should be looking for

06 SEP 2018

Next Wednesday I’ll be in LA (at Mobile World Congress Americas) running from meeting to meeting and soaking up insights about the mobile industry from all the exhibitors, speakers, etc. Meanwhile, up the road at Apple’s HQ in Cupertino, the next set of iPhones will be launched.

Whatever Apple announces will, doubtless, dominate the tech media for days (if not weeks) to follow. That’s completely fair. The iPhone was one of the first mainstream smartphones. More importantly, thanks to an intuitive user interface and marketplace of apps, it made smartphones useful and desirable for the average consumer – driving mobile data usage in the process. It was largely on the back of this device (and the ones that followed) that Apple went on to become the world’s first tech company with a trillion dollar market cap. Of course, built into that market cap is another consideration; there’s still plenty of room for growth in the smartphone market. As of Q2 2018, global smartphone penetration stood at just over 58 per cent.

As we look forward to the new devices, it’s worth doing a little prep work and spending some time thinking about what will be announced next week. There are plenty of rumours out there. And, while they’re all just rumours for now, they tell us some important things about the shape of the industry… today and going forward.

New Flagship. New Sizes. The current top-of-the-line iPhone (iPhone X) comes with a 5.8” screen. The new flagship is expected be called the iPhone XS, coming in with 5.8” and 6.5” models. It’s a new phone launch so bigger and faster are to be expected, right? There are also rumours that the new XS might be priced marginally cheaper than last year’s iPhone X. Would a $100 reduction quell some of the backlash felt around the $1000 price tag on last year’s model? Maybe. Would it help drive sales in less developed markets where smartphone penetration still lags? Less certain, but…

Cheaper Variant. Beyond the additions at the top-end of the iPhone line, some folks are expecting a new low-cost model, potentially labelled the iPhone 9. Different screen technologies. Different capabilities. Different materials. A single screen size variant. Costs could be stripped out in multiple ways and the strategy would align with last year’s launch of the iPhone 8 alongside the iPhone X. Regardless, keeping costs in check is important as Apple looks to tap the global smartphone upside. Thinking smartphone adoption in another way, the penetration rate in developed markets stands at 91.2 per cent. That same figure is just over 50 per cent in the developing world. To be sure, most of the newly connected or new smartphone users in those markets won’t be going out and buying an iPhone 9 (much less an 8, X or XS). The middle class in those markets, however, might. And, where resale of older iPhones is a thriving market, keeping down the price of new devices only serves to keep down the resale price going forward – helping bring on-board new users into the Apple ecosystem.

New Silicon. Last year’s iPhones were powered by the A11 chip. This year’s phones? It’s not a big risk to assume they’ll have an A12 chip inside. What will that chip do? Great question. We’ll doubtless see headline speed and battery life improvement figures thanks – at least in part – to the use of a new 7nm manufacturing process (vs. 10nm for the A11). New LTE speeds? Yep. 5G? Almost zero chance. As much as device availability will be a gating factor on early service uptake, expecting Apple to launch a 5G device when 5G networks and silicon are still nascent is just too much to ask.

New Software. iOS12 was announced back in June but that doesn’t mean there’s no software news to be expected next week. But beyond things like Face ID extension (now expected in the cheaper iPhone), look for software to be a big part of the silicon story. Consider the new Kirin 980 processor Huawei announced at IFA last week; beyond a 7nm manufacturing process, AI and image processing were a big part of the story. Given the image processing and “Neural Engine” capabilities of the A11, there’s little doubt that we’ll see Apple follow suit with the A12 powering the new iPhones pointing to the further extension of silicon as a competitive differentiator and the integration of AI into everything.

There will be a lot more coming out of Cupertino next week. We’ll possibly get new colours. New charging adapters. New features. A new Apple Watch. New MacBooks. New iPads. There will be something for almost everyone.

Beyond all of this (some of which is near-certain), I’m hoping for a few other things. On the spectrum front, some folks criticised the last iPhones for coming up short by lacking LAA or CBRS spectrum support (though Band 42 is covered) along with things like Band 71 (a big part of T-Mobile US’ strategy). Addressing at least some of these would help expand the device’s use cases and potentially drive some new service innovations. Perhaps more importantly, there’s a lot Apple could do to help move things forward on the use case (vs. connectivity front). In particular, where operator use cases for AR/VR services are still being fleshed out, anything Apple does to make them more accessible will be welcome. Apple announced its ARKit 2 earlier this year, but integration with new devices – taking advantage of new cameras, new processing, new speeds, etc. – can’t help but move the AR/VR story forward…and help operators figure out how to monetise it.

While the buzz surrounding new iPhone launches may seem overblown (especially if you’re not an iPhone user), it’s important to recognise the impact these devices have had on the entire mobile industry. New pricing. New spectrum support. Heck, even new colours could drive the market. That’s why, wherever you are, you’ll likely be talking about the new iPhones next week.

– Peter Jarich, head of GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.



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