What will Apple do next? The industry watches and waits

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It’s that time of the year again – when the smartphone giant reveals its new flagship devices

Anticipation and expectancy is in the air as Apple nears the launch of its next batch of smartphones.

As we head into ‘Apple season’ – when the California-based giant traditionally launches its flagship devices – all eyes will be on Apple as it responds to Samsung and Huawei’s 2018 launches. Samsung has given us the Galaxy S9 and more recently the Note 9, while Huawei has had amazing success with the P20 and P20 Pro devices.

Last year Apple got the world talking when it unveiled the iPhone X, which divided opinion as it was announced it would cost an at-the-time unthinkable £1,000.

The X also introduced the “notch” and took Apple and seemingly the smartphone market into a different direction in terms of design.

While Apple hasn’t yet confirmed any of the features of its latest flagship smartphones or how many it will introduce. It is expected there will be three phones released – with an iPhone 9, iPhone 11 and iPhone 11 Plus rumoured.

The iPhone 9 is expected to be the more entry level model of the three and expected to feature an LCD screen whereas the iPhone 11 and 11 Plus continuing on from where the iPhone X left off.

So what do the analysts and those in the industry expect from the launch?

The successor to the iPhone X is hotly anticipated

What do you expect from Apple ahead of the upcoming launch?

GfK director technology Imran Choudhary: Our research indicates that consumers are continuing to hang on to their devices for longer and often moving closer to the 30-month mark in many cases. This, along with tough market conditions, mean Apple’s new iPhone will continue to focus on driving margin at a very high price point.

I expect three new devices – one to replace the iPhone X, a larger Plus variant and a more affordable device that may come in more colours, aiming to fulfil the role the iPhone 5C did several years ago. Because of this, it is fair to say we can expect more focus in the super premium end of the market from Apple.

In addition, there’s also a strong chance a slightly less premium device will get released alongside two super premium variants. This more affordable device will be aimed at those who aren’t quite ready to pay the very highest price points, but could be tempted by something more in line with Apple’s historic pricing range.

IDC senior research director Francisco Jeronimo: The question is whether it makes sense for Apple to release three devices. One device I’m not expecting to see a remake of is the iPhone SE. It also makes sense for Apple to keep improving especially around the cheaper versions of the iPhones that will be launched. There is a big question around Apple keeping a similar design to the iPhone X.

EcoRenew Group CEO Marc Chambers: In true Apple fashion it will keep its cards close to its chest until the announcement. However, we’re expecting a similar mix of products to last year with two higher end models, including the iPhone Plus range, and another lower
end model targeting consumers with a smaller budget.

PMGC marketing manager Alan Man: I expect the new range to be similar to the current range as the iPhone X design is still a fairly new design. I can’t imagine Apple will change anything too drastically. Overall, design-wise I expect it will remain the same.

Dual-SIM functionality is strongly anticipated in the new Apple range

What can we expect in terms of innovation from Apple?

Choudhary: In terms of what the new device could bring – consumers have been telling us repeatedly that battery life and the camera are key drivers to purchase. Given this, Apple would be wise to bring improvements in these key areas. To tackle the battery life we can expect greater chip efficiency and faster wireless charging. While there may be no radical overhaul to the design, there’s likely to be improved camera features with a greater emphasis on how clever AI software interacts with the camera to create more sophisticated photo and imaging functionality, taking AR and gaming into account.”

Jeronimo: I am anticipating Apple to introduce a device that has dual-SIM functionality. Dual SIM is very important to many regions around the world and it is a strong feature that Huawei and Samsung has a strong market share of, and is something that Apple will need to consider in the next launch. I’m also expecting the flagship to have triple cameras and greater capabilities as well as face ID across the range to the lower options.

Chambers: I am not expecting a huge number of technological advances from the forthcoming release apart from dual SIM capability and enhanced OLED screens.

The One Point managing director Martin Lauer: I’m hopeful about the rumours regarding the battery being better and more durable. This is one of the biggest frustrations for current iPhone users as it doesn’t hold out as long as most would like it to.

Huawei shipped 54 million devices in the second quarter of 2018, with the P20 leading the way

With Huawei having a strong second quarter, what sort of response can we expect for Apple?

Choudhary: Apple’s launch cycles and development plans are unlikely to be affected or impacted by the performance of others unless someone brought a game-changing element to the industry – and historically that’s always been Apple. Competitors and challengers have their own peaks and troughs but this will have had limited impact on Apple’s plans, in all likelihood.

Jeronimo: It’s unquestionable whether Apple will become number one again with the new devices it will launch, especially if it attracts the mid-range price points. If Apple manages to bring the same design to a lower price point like £600-£800 price range then I believe Apple will have a massive quarter as this is the space Huawei has been taking over in the last year.

Clearly, Apple will regain market share in this space. It is much stronger for Apple if it can regain this share with a new device. It can gain users from Android around that price point. If Apple brings the high end features to a slightly lower price point then they will be of interest to those who are keen to buy the latest phone that isn’t more than £1,000.

What can we expect from Apple in terms of pricing?

Choudhary: In terms of price point, there is little doubt the update to the iPhone X will cost a similar amount with the Plus variant carrying an even higher price point. The more affordable device that might be seen as the iPhone 9, closer to the £700 mark, in line with where we saw the launch of the iPhone 8 last year.

Jeronimo: I’m expecting the devices to be cheaper, although the one device that is similar to the iPhone X I think will push £1,000 again. It depends on the design and whether Apple continues to focus on the iPhone 8 design or if it will move to push the high-end iPhone X design on the cheaper models.

Chambers: Trends over the past two years have shown an increase in handset values, so we expect to see the same again this year. However, with the introduction of a lower budget iPhone handset for this year’s launch, we could see the overall value of devices sold being lower than last year.

Lauer: I would expect the X Plus to be around £1,200 but I’m hopeful there is a mid-range coming at a good price point to drive more volume. I think the Huawei P20 Pro is a game changer at the price point it came at despite being a high-end smartphone. As a result of this I’m hopeful Apple will do something mid-market such as it did with the SE.

Bastion Insurance director of sales John Fannon: Price is a massive reason for consideration from users but I would expect Apple to again be hitting the £1,000 mark with the flagship it is releasing.

As the cost of devices has risen more users are taking out insurance to cover damage

What opportunities does iPhone present for your business?

Chambers: The iPhone launch is a huge event across our business for both our consumer-facing brands, Mazuma and iMend. For Mazuma, we regularly see volume of orders spike by 30 to 40 per cent more than normal, through mazumamobile.com, following the initial iPhone announcement. This is largely down to consumers trading in an old device and upgrading to the latest model. It’s a similar picture for our iMend mobile phone repair business as we see spikes in the volumes of orders. Consumers look to repair their devices as they’ve decided to hold on to them for longer after not being impressed by the new model. Alternatively, they look to repair their device in order to get more value before upgrading to a new one.

Lauer: The new iPhone launch is always important to our business. We have a large number of high-end customers who always need to have the latest iPhone. It always turns into a good earner for us. We have customers that are waiting for this iPhone launch. It creates a pause in the market in the months ahead where customers are saying “I’ll just wait”. It always provides good opportunities for us.

Man: Typically with Apple launches there isn’t a massive need for us to market ourselves as there is always a demand for iPhones – the brand sells itself and the customers will support it. There was huge uptake with the iPhone X despite the high price. We sold a significant number of the devices.

Fannon: There is always a lot of excitement and anticipation before an iPhone launch and there is always a big uptake in insurance plans when Apple releases new smartphones. With Apple there is historically always a buzz. We’ve just had our best ever month where a significant part of the uptake that month was due to the Samsung Note 9 that was released earlier in the month. We can get an immediate uplift on that as it is a very expensive and desirable item and we all know the iPhone will be no different, if not better than that, so we are standing by for quite an increase.

It is also a great opportunity for resellers just as much as insurers. The most common form of damage is screen damage and the days of it being a cheap fix are over now as phones are more technologically advanced. For that reason alone it tends to be a far more attractive proposition for consumers now.

Coplus business development manager Bernie Nunn: With the increasing cost of technology this is leading to more customers seeing the benefit of insuring devices, and with the upcoming iPhone’s will be no different. There is a demand for mobile insurance and there has been an uptake in phone and gadget insurance over the last few years as devices have become more expensive. I would hope people see the advantages of insuring their phone as this ultimately benefits them when spending so much money on smartphones.

iPhone launches always provide a significant increase in business for retailers and networks

Would you say the iPhone X which was launched last year was a success?

Choudhary: The iPhone X was a bold step forward allowing Apple to outline its blueprint for the next three to five years. Signalling a move away from a physical home button, the X clearly outlined the base frame on which Apple would inspire future flagships. Given broader market conditions and consumer trends, the X played a pivotal role in allowing Apple to drive its margins in a very tough climate by effectively creating a higher tier within the premium end of the market, which others are trying to imitate.

The new models coming out will no doubt be looking to repeat this success and there are plenty of consumers currently out of contract who could be brought to the buying cycle if they see something they like. With network partners bringing more innovative propositions to the market in a bid to enable customers to make high-end purchases more easily by spreading the costs through leasing and trade-in schemes, there’s every chance these new devices will top last year’s performance.

Jeronimo: It was definitely a successful model and has helped Apple increase its hold on the premium market share. It was one of Apple’s most sold smartphones and if there was ever any concerns when the X was launched they soon evaporated as it experienced strong sales. It’s a good phone and performed well for Apple.

Lauer: The iPhone X was a success and performed well and hopefully has inspired a plus sized version of it for the forthcoming launch. This is something that would be great for many people including myself and would potentially offer a better battery life. Often we found there was a lot of interest in the X but people wanted it to be bigger.

What challenges can Apple expect to have in advance of the launch?

Jeronimo: A challenge for Apple could be that more people are holding onto their phones longer if they’re spending more on those devices in the first place. In particular I expect this to be a challenge that Apple will experience in the high-end sector of the market over the next few years.

In the past people would hold on to phones for a couple of years and upgrade but now it is more likely to be three years or longer as a result of the higher prices that they’re paying. I think Apple needs to incentivise users to upgrade and it can do this when people trade their old devices in. With the trade-ins it is an interesting business for Apple as it can resell these as refurbished smartphones again at a slightly lower price.

Lauer: We have a number of customers that prefer Apple smartphones but are pushed to go for older versions such as the iPhone 6 and SE as they can’t afford the latest models. The pricing could ultimately be a challenge for Apple. Also, I think consumers are becoming less “wowed” by iPhone launches and devices, despite the consistent anticipation each year.

Nunn: I would like to see if Apple can improve on the ruggedness of the new range. One of the leading brands needs to set the trend and if Apple were to do so, others may follow this too.

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