Can Apple CEO Tim Cook wow us next week?
You can feel the difference, can’t you?
The excitement that once gripped you as hype built for the next Apple iPhone event — it isn’t quite there anymore.
Call it phone fatigue.
As more companies pack more features into even more smartphones, it takes a lot more to impress us than just a sharper display or slightly better camera. It’s a dilemma that facing the broader industry as the smartphone market matures and begins to slow. Just look at how Samsung has continued to struggle despite cranking out several new Galaxy smartphones. Or how HTC’s sales tumbled after releasing its flagship One smartphone with minimal physical changes.
But there may be no better poster child for this problem than the upcoming iPhone.
When Apple unveils its next iPhone — believed to be the iPhone 6S — on Wednesday, it will look exactly like last year’s model. And that one, the iPhone 6, looked a lot like the first smartphone Apple introduced eight years ago. And while consumers are now conditioned to expect minor changes during the off-year “S” model iPhones, it’s unclear just how Apple will get consumers pumped up again.
“That’s what the big question is: What can they pull out of the iPhone bag to get people excited?” said Kantar Worldpanel analyst Carolina Milanesi.
The likely marquee feature for this year’s iPhone 6S will be the Force Touch technology used in the Apple Watch — a pressure-sensitive display that responds differently to various types of touches. A new color could be in the works, as well. And some rumors say Apple may tweak the device’s display and materials and slightly alter the design to incorporate a bigger battery.
But the odds of the iPhone 6S looking radically different from every iPhone that has preceded it are slim to none. Force Touch doesn’t seem like it would yield the kind of resonance that even digital voice assistant Siri or a fingerprint sensor were able to muster when they first debuted during an “S” year.
The boredom doesn’t mean Apple won’t sell millions of phones, but it does mean consumers may think a little longer before shelling out cash for an iPhone 6S when their old devices are “good enough.”
Fortunately, it may not just be the iPhone carrying the day. If recent reports are to be believed, next week’s event in San Francisco could be one of the most jam-packed launches Apple has ever hosted. Along with showing off new smartphones on Wednesday, Apple likely will introduce new iPads — possibly including the long-awaited 12.9-inch iPad Pro — and an updated Apple TV, as well as potential Mac, Apple Watch and other news. It also will launch its iOS 9 and Mac OS X El Capitan software, first shown in June.
The next iPhone isn’t expected to look much different than the current iPhone 6 and iPhone 6 Plus.
Apple declined to comment ahead of its event.
Apple’s biggest news of the day may not be the next iPhone, but that device still remains the company’s most important. More than two-thirds of Apple’s revenue comes from the smartphone, and none of its other devices even come close in terms of shipments and sales.
The iPhone 6 and 6 Plus, which increased the smartphone’s screen size to 4.7 and 5.5 inches from the iPhone 5S’ 4 inches, have turned out to be Apple’s best-selling devices so far. Sales of the smartphones have helped Apple post a bigger profit than any other public company in history and also helped it regain the crown as the world’s largest smartphone maker — though only for a brief time before Samsung won back the title. It would be hard for Apple to top that success no matter what it does with the 6S.
While Apple has added notable and much-loved change to the iPhone over the years, the smartphone has essentially remained a rectangular box with a round home button since the first model hit the market in 2007. That design limits how big Apple can make its screen and what else it can do with the device, considerations that some rivals don’t have. Samsung, for instance, shaved down the overall size of its Galaxy Note 5 but retained the same 5.7-inch display size in the last two years by shrinking the frame surrounding the screen. That’s something Apple would find hard to do with its current iPhone design.
The changes Apple has made over the years have been enough to get millions of customers to upgrade their phones, but the market is evolving. The smartphone sector, while still growing, isn’t increasing as much as it used to. Smartphone shipments should rise about 10 percent this year, according to IDC, lower than the 11 percent growth projected earlier and well below the 28 percent increase in 2014. IDC attributed the slowdown to China joining North America and Western Europe as more mature smartphone markets. China’s economic woes haven’t helped either.
Samsung, LG, HTC, Xiaomi and others have been impacted by the slowdown, and not even Apple could avoid concerns during its most recently reported quarter. The company in July reported fiscal third-quarter earnings that were better than analysts estimated and revenue that was largely in line with expectations — but it wasn’t the blowout Wall Street has gotten used to. The company also projected weaker fiscal fourth-quarter sales than anticipated and said it sold fewer iPhones in its third quarter than analysts expected, 47.5 million versus the 49.4 million anticipated by Wall Street.
Apple will hold its event at this venue next week.
Many consumers are finding their older smartphones are snappy enough, and new phones don’t look different enough from their predecessors to get them to rush to upgrade. And with the new wireless market in the US, which has essentially done away with two-year contracts, consumers may think a little harder about forking over $649 for an iPhone instead of the subsidized price of $200 they paid upfront before.
Apple will be targeting two-year upgraders as its key market for the iPhone 6S.
“Apple has always really embraced the two-year upgrade cycle, and its strategy has been to make sure the two-year upgrade is a compelling one,” Jackdaw Research analyst Jan Dawson said. “Compare the 6S to the 5S, which is the comparison most would-be buyers will be making, and it’ll be a really significant upgrade.”
Apple has said many consumers still need to upgrade their phones, despite a large number jumping at the chance to buy the iPhone 6. According to Kantar Worldpanel, nearly one-third of both US and urban Chinese iPhone users — Apple’s two biggest markets — own iPhones that are at least two years old. If Apple manages to get everyone who hasn’t bought a new smartphone in a couple of years to upgrade, it could surpass the iPhones 6’s success.
And yes, the iPhone 6S should still command long lines as the Apple faithful vie to be the first to get the new device on launch day.
But for everyone else, a new iPhone is no longer a must-have item.