Apple needs a home run with 10th anniversary iPhone launch: GVA Research

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How much of a setback is it for Apple to have the information about its 10th anniversary iPhone leaked

Given the fact that Apple under CEO & co-founder Steve Jobs was notorious for being secretive as to product features, it is notable that under Jobs’ CEO successor Tim Cook the company has experienced an increased incidence of information leaks. Does this reflect a company that has lost control of proprietary information flows or more the fact that organizations in the modern digital environment are simply increasingly porous entities? The answer is more the latter than the former. Given that Apple is celebrating the 10-year anniversary of the original iPhone’s introduction, it is quite possible that Apple itself decided to leak critical product and operating software details ahead of the Tues 9/12/17 launch so as to excite the public as well as advance the level of questioning around the launch to be more in-depth than might otherwise be the case. Bottom line, if this leak is deemed a setback, it’s not one of a critical nature.

How significant are these discoveries? Which do you find most notable?

Apple has a history of “best, not first” products. This product philosophy has resulted in products that have enjoyed a cumulative 1.2bn in unit sales since the iPhone was first introduced in 2007. The coming iPhones (iPhone 8, iPhone 8S, iPhone X) are expected to incorporate a number of features that have been pioneered by Apple’s competitors. Specific expected features pioneered by competitors are: Nearly all-screen design (Samsung S8), OLED screen (Samsung S8), Slimmer bezels (Samsung S8), Virtual home button (Samsung S8), Inductive charging (Samsung, Palm). Expected features that are Apple innovations are: 3D facial recognition sensor (for unlocking phone and making payments), Infrared sensor (allowing for in-the-dark facial recognition), Reconfigured cameras (allowing for better augmented reality apps), SmartCamera/improved scene and object detection. It is Apple’s move towards facial recognition and its support for augmented reality functionality that capture the greatest interest, but how well the company executes on improving on competitor product features will prove critical in whether the mooted $1,000 price point will meet with consumer acceptance.  

Ditching the existing iPhone’s TouchID fingerprint sensor for the 3D facial recognition. Will that get consumers excited or more wary of its security?

With the possibility of personal identity theft increasing almost exponentially on a daily basis, consumer interest in technologies promising to be more impervious should be strong. As such, we expect that Apple’s move to a 3D facial recognition standard will meet with solid acceptance.

The iOS 11 as an Augmented Reality platform. How important is this for the consumer, given it’s in the initial stages

Augmented Reality (AR) is finding greater application across a growing range of activities, not just video games. By establishing iOS11 as an AR platform, Apple is ensuring its relevance as a platform for developers. Like artificial intelligence (AI), AR is not a race Apple can afford to sit out.

Based on what we know of the leaks/predictions, how this phone’s features compares to previous iPhone and Samsung’s latest Note 8

The coming iPhones continue Apple evolution towards “jack-less” products with a seamless product package. Against the Samsung Note 8, Apple has refused to adopt a stylus, a product feature decision we appreciate as a stylus can be easily lost or misplaced, something likely to annoy rather than delight consumers. 

What would justify a price similar to the Samsung Galaxy Note 8? Is this enough?

Improved execution and integration of competitor product features along with intuitive ease of use for 3D facial recognition and AR features/content should allow Apple to continue to maintain the premium price product strategy it has implemented historically. 

It’s still believed Apple may reveal a new Apple TV. Apple’s put in $1B into original content. If we get any further details on Apple TV, how important would that be and what would you like to see.

Despite lagging competitors, Apple TV has still managed to capture an estimated 13% market share. Making a material contribution (i.e. $1bn) to original content development is important as it appears that entertainment companies are beginning to consider developing content that will be distributed on proprietary platforms. In this regard, note Disney’s decision to not provide content to Netflix starting in 2019. Apple’s move appears defensive. A more aggressive posture would involve higher levels of expenditure as well as perhaps aligning with specific entertainment companies (note Steve Jobs’ sale of Pixar to Disney).