Apple’s iPhone 5s/5c Media Event: A Scorecard

| Analysis

The iPhone media event is over. How did Apple do with its announcements? Did we get what we expected? Did it brighten our day? Here's my scorecard.

Phil Schiiler introduced the iPhone 5s (Image credit: Apple)

1. Apple 5c. This phone is everything we thought it would be. The best analysis suggested that it would omit the fingerprint technology, and that's what happened. While the price looks to be only $100 less for starters at the consumer level, there are other considerations. For example, thanks to its plastic and steel design, it may have a better potential to improve margins down the road than at the outset. That's a guess.

It's going to be a runaway success in the emerging markets Apple is targeting. Not to be overlooked is Apple's statement: "... while delivering great battery life ... iPhone 5c comes with more LTE bands than any other smartphone in the world." Thirteen bands make it a true world-phone.

Polycarbonate is a rugged material. It's perfect for harsh conditions. I expect it will find unexpected, serendipitous uses.

2. The iPhone 5s. As I mentioned earlier, Apple has the unique ability to surprise and delight us with technology because the company thinks deeply about what kind of experience it wants to create for us.

At first, the gold color was received with some skepticism, but from what I've been reading, I think it will be a runaway success, especially with women.

In terms of technology, observers were generally at a loss to define how Apple would move the smartphone technology forward. The scuttlebutt has been that the smartphone has reached technical maturity and there is nothing left to do but wait for the next technology revolution. Or throw NFC at imaginary problems. Apple proved us wrong. Again.

The company also gently hinted that health and fitness management is probably better instantiated and tested on the iPhone first. Then, maybe, in the future, we can access some of it with an iWatch in an elegant way.

Apple also realized that, down the road, if apps were to run faster, they'd have to run on a 64-bit processor. The technology is tricky here. Running 32-bit apps on a 64-bit processor doesn't help much, but if the app is re-written for 64-bits, there are gains to be made. Just how much this is appreciated by the buying public remains to be seen.

What shouldn't be overlooked is that Apple has been down an elegant, well-thought out road with 64-bits on OS X and Mac hardware. It has developed an excellent implementation of 64-bit systems and compilers on the Mac. So, as competitors who may have sold out to 32-bits try to match Apple's 64-bit marketing, they could find themselves in a technical bind. Apple likes to do things like that, but it's just a guess.

The lack of 802.11ac will annoy lots of people.  They will whine.  It's probably a battery life issue.

3. iOS 7. This new OS is going to be a shock to many customers. Apple will have a bit of marketing work to do to make sure customers know what it's all about. iOS 7 is elegant, has 200 new features, and exudes style with deep layering and semi-transparency. Overlooked in the Apple presentation may have been the use of Wi-Fi Direct. Here's an introduction.

Personally, I don't think Craig Federighi was allotted enough time to talk about the roll out, the updating of apps, and the fundamental impacts on consumers. As always, the approach is: "This is great, you will want it." But then we are all left to sort out the issues later. I wish there had been some kind of strategy discussed other than, "Just go ahead and install it!" Perhaps Apple should have built an iOS 7 introductory app for iOS 6, a tutorial, that leads one to conduct an informed install or defer until later.

4. iPad. There was a lot to discuss in this media event, and little time to go into the iPad. By the way, the oldest iPad that will run iOS7 is an iPad 2. As predicted by most, there will be a separate iPad event later.

Again, as an aside, if observers had been wondering about what Apple would do to make the new iPads desirable, it's my guess that the new hardware design of the iPad 5 with a thinner side bezel, being thinner and lighter, with a faster A7 processor, and Touch ID technology, all amplified by the features of iOS 7, will be enough to generate the necessary excitement for owners of older iPads.

Based on what we saw in this iPhone event, I have no doubt that the next generation of iPads, in a similar presentation, will surprise and delight us and keep the heat on the competition.

Conclusion

This event was well-balanced. The right products and the right messages (with closing music) were delivered, as expected.

What was unexpected by many was the technical acumen of Apple that allows it to always offer a product whose whole is more than the sum of its parts. Technology should always delight and assist us -- as demonstrated by the new iPhone 5s camera system.

Plus, there is plenty of pent up demand, and just because managed leaks allowed daily observers a glimpse of what would come doesn't mean that customers won't be excited about these new iPhones. I think it would be a mistake to predict that that these products won't set sales records.

In all these respects, Apple scored brilliantly.

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Comments

palenoue

Could you let us know when Apple posts the new commercials?  I know a lot of Klingons who would enjoy the one featured in the presentation.

John Dingler, artist

Having sat though the entire keynote, it reminded me that Jobs held in his hand, even lovingly caressed, all iPhones and iPads during his demonstrations; He surprised us by pulling the iPhone (or was it the iPod?) from his pocket and held it up into the air with pride; At another event, he stroked the iPad while sitting on the soft sofa chair as if lost in reverie. Today, by contrast, the presentation was all on the screen as if Schiller, Cook, and Federighi made it a point to keep their distance from their children, as if the devices were untouchable in the sense that the class of Asian Indians are Untouchable. There was little love expressed for the motley-colored iPhones C, as if they expected us to love them because, you know, they are motley.

This makes me think that the present Apple administration is losing emotional touch with its products while only talking about them—a kind of lip service, an intellectual practice—, exactly the wrong message to convey.

A corollary is that the show was heavy on technicals, not enough pauses of delight, and a paucity of fun interaction with the audience. In other words, it seemed way too dependent on a rush of Keynote slides.

Bregalad

There was no live stream so I only got to read live blogs of the media event. Most of my colleagues found it underwhelming.

iPhone pricing: unchanged
iPod lineup: unchanged
iPad lineup: unchanged
Mac lineup: unchanged
iOS 7: almost nobody here likes the new UI
Carrier lineup: added one in Japan, but none in China
iPhone choice: new colours and choice of Al or poly
iPhone performance: 5S is faster than expected

Despite a lineup that enhances margins Wall Street gave Apple two thumbs down today. The iPhone will continue to sell very well on subsidized carriers and continue to struggle elsewhere. Nothing happened today to change that.

Apple made a point of saying the fingerprint data was local to the device and would never be uploaded. Was that in response to yesterday’s leak of the NSA calling Steve Jobs “big brother” and iPhone users “zombies”?

diverreb

Far from an Apple Basher here…  But seriously…  Do you work for Apple’s Marketing Department?  The event and phones are evolutionary at best.  Larger Screens…  That would have been something to swoon over…. Would have been totally unexpected at this time, and a reason to upgrade or switch back from my recent purchase of a Note 2.  You sound like the Political Reporters who live in and around DC and make mountains out of mole hills when he masses could care less…  The Geeks & Guru’s might think this stuff is Technology refined, but ask the masses who purchase iPhones and you will get a collective Yawn…  Except the color thing… That might be a sales driver, but hardly even evolutionary. 

JustCause

I would say the camera refinements and finger print sensor will resonate with a large number of consumers.

My biggest gripe, no 128GB iPhone, the 128GB iPad was release in Jan 2013, why no 128GB iPhone?

I like everyone would like a game changer keynote, but be real, since the original iPhone no company has rolled out a game change in the phone marketr (it’s been bigger and bigger screens with minor software changes).

iJack

I read the linked material, but I still don’t understand how Wi-Fi Direct is different from what we have now when we create a computer-to-computer network. There was a TMO article in just the past few days on creating “Ad Hoc Networks.”

Someone please explain?

gnasher729

IJack: One is “Create a computer-to-computer network (or device-to-device network), then use that network to send data from one device to another device”. The other is “Display compatible devices nearby, pick the recipients, send data”. The underlying software is the same. The difference is that with Wi-Fi Direct the user doesn’t need to know about networks, passwords, etc. but only about people around them with phones. All the steps that the user isn’t really interested in or doesn’t really understand are gone.

Bosco (Brad Hutchings)

The real scorecard is this morning.

Dear AAPL,
Welcome back from your vacation. We really missed you!
Signed,
$400

iJack

I just watched the iOS7 Features video.
“Wi-Fi Direct” is actually AirDrop for iOS.
Somebody could have said that, earlier.

JustCause

@Bosco Wrong scorecard, investor no nothing about products just like when the original iPhone was released and declared an immediate failure.

aardman

Assuming that Apple management aren’t stupid and they know a lot more about their business and market than any of us (including the usual banalysts):

Observation: 5C is not the bargain that banalysts hoped it would be.

Inference:  Apple concluded (for now) that there is no way they can deliver a non-gimped mid-priced iPhone that would not siphon off too many sales from the (high margin) top end iPhone.  It appears that with smartphones, Apple will stay with its strategy of being the aspirational brand; they’d rather wait for customers to come to them as their incomes rise rather than go down market with a lower priced model that erodes their status as the aspirational brand.

Commentary:  In computing devices, I’ve always believed that the OS is the primary differentiating feature.  If you sell a low end model that does basically what the high end model does (i.e. the same OS), then you kill the high end market.  If you sell a low end model that is perceived to be a gimped version, that model will languish on the shelf.  This is no mystery, we’ve seen this happen with Windows PCs.

Takeaway:  Apple’s smartphone business has matured, any future growth will be driven primarily by rising incomes in developing countries (with an initial bump coming from a China Mobile deal).  They will never be a full-range smartphone vendor.  As they do in PC’s, Apple will occupy the top end and get the lion’s share of industry profits.  Probably also means that Apple is gearing up for their next growth product, wearables, and their recent hires, acquisitions, and management moves indicate that they are in the thick of preparations for their next big thing.

aardman

Well, slight correction, everyone knows that Apple is gearing up for its next growth product.  What I meant was that Apple is probably devoting a lot more resources to the next growth product and introduction is a lot closer than most people think.  For example, the recent big bump in in-house advertising hires is not to shore up current advertising but to gear up for a new market for which their current ad expertise is a little thin.

webjprgm

In relation to what @aardman, if keeping the same OS on a cheaper phone won’t do, then we could go back to what everyone wanted in 2005 and just put phone features on an iPod nano to be the low end phone. I imagine Apple doesn’t do this because they just don’t like the experience or can’t get enough profit from it. But it’s the easy solution to address all levels of the market. (Not a gimped device, not a device will all the same software features. Still a device some people would want.)

I am disappointed that the iPhone 5c is so expensive mostly because I know it means the stock price will go down (as it just did today, by a lot). I’m AAPL long term, so I’m fine, but it always bothers me when the price goes down instead of up.

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