The speculation is finally over and once more the big annual iPhone event fell hopelessly short of the hype, as usual.
To be fair to Apple it would have to discover alchemy or turn water to wine for the evangelical fervour that infests its product launches to be justified. But then again the company is utterly complicit in whipping up that froth so it can hardly complain when even its army of compliant fanboys feel robbed of their happy ending.
This was the year we went up a number. The Apple equivalent of Intel’s ‘tick-tock’ launch cadence infers a major overhaul every two years, when it changes numbers and a minor, iterative tweak in between, accompanies by an almost apologetic ‘s’ postscript instead of a whole new number. To put that into telecoms language, it’s like writing ‘.5’ after the number of ‘G’s.
But just as with every number shift since the great iPhone 4 redesign six years ago, the newness has been evolutionary, not revolutionary, and lacked the seismic resonance of Jobs-era announcements. The 5 brought us the Lightning connector, on which more later, but also the comically abortive Maps app that was an early example of Apple trying to catch up with the market rather than lead it. With the 6 Apple finally got the memo that people want more screen real estate and initiated a double launch strategy with a plus-sized model designed to take on the Samsung Galaxy Note, but that was about it.
The big announcement with the 7/7+, according to Apple, was an improved camera and the kind of water resistance Samsung and Sony have been offering for a while. “The completely redesigned cameras shoot incredible photos and videos day or night, the A10 Fusion chip is the most powerful chip on any smartphone while delivering the best battery life ever in an iPhone, and an entirely new stereo speaker system provides twice the sound, all within the first water and dust resistant iPhone,” effused Apple marketing boss Phil Schiller.
For everyone else, however, the big story was the anticipated removal of the venerable 3.5mm headphone port, leaving iPhone 7 owners with the choice of using the Lightning port or switching to Bluetooth headphones. For those who already own expensive Apple-owned Beats headphones with 3.5mm jacks there is an adapter, which amounts to a somewhat clumsy compromise.
It came as no surprise to see Apple launch its own premium Bluetooth headphones, called AirPods, which can be yours for a mere £159 inc VAT. There does seem to be a genuine attempt to design something different with these, however with Apple having crammed a lot of wireless goodness into a very small form factor thanks, in part, to a new ultra-low power W1 chip. The flip side of this, of course, is that they will be very easy to lose, so expect sales of replacement AirPods to become a major new revenue stream for Apple.
“AirPods are simple and magical to use, with no switches or buttons, automatically connecting to all your Apple devices simply and seamlessly, and letting you access Siri with just a double tap. We can’t wait for users to try them with iPhone 7 and Apple Watch Series 2,” exhorted Shiller.
As indicated we also got the sequel to the Apple Watch at the same time. After a promising start Apple watch sales fell off a cliff this year and it was clearly time for Apple to formally address the matter by making a better one. Again it was an iterative upgrade with better components, water resistance and a refreshed OS that seems to have done little to bring new punters into the Apple Watch fold. The new version starts at £369 or you can have a ceramic one, if you’re into that sort of thing, for £1,249.
UK pricing is definitely an issue. We generally get taken to the cleaners on the exchange rate by Apple regardless of how benign its European tax arrangements are Apple insists of charging far more for its products over here than it does in the US. The Verge has looked into this and noted that Apple is raising the price of the regular iPhone by £60 and the Plus by £100. There have been no such rises in the US and Apple seems to be blaming Brexit and the consequent weakening of the pound for the move, applying today’s exchange rate to the US price of the entry level iPhone model – $649 – yields a UK price of £484, not £599, which is what it will actually cost you.
This is the area in which Apple runs the greatest risk of alienating its most loyal customers. “Apple raised prices for the privilege of spending £159 on a pair of their earphones,” lamented lifelong Apple loyalist Shaun Bicheno, before noting “sales of iPhones to women will go through the roof as they find they can finally drop them down the toilet.” Meanwhile previously slavish Apple fanboy Johnny the Bubble added “Bit too pricey for me, I might skip this upgrade and wait for the next one. I’ve got some nice Beats headphones that I like – f*ck the Airpods!”
Device industry Analyst Neil Mawston, who presumably never has to pay for a smartphone, was nonetheless unimpressed by the price rise. “The iPhone 7 seems designed to squeeze maximum profit from Apple fans,” he told Telecoms.com. “The shift to a proprietary Lightning connector and fresh price hikes for the device make the iPhone 7 and 7 Plus more expensive than ever. Consumers will have to pay extra for the phone and extra for new accessories like Bluetooth headsets.
“Apple has had to raise the iPhone 7 price due to the fall in the UK Pound after Brexit. But with the most expensive iPhone 7 model now approaching £1000, Apple must be careful not to overprice its portfolio and upset customers.
“Almost all the new features on the iPhone 7 and Watch Series 2 portfolio have been seen before in rival models from Samsung and others. For example, water-resistance is already available in Samsung’s Galaxy S7.
Other tweaks include a new gloss black finish that Apple bafflingly warns will scratch easily and recommends protecting with a case that will render its glossiness redundant. There’s also the introduction of a new Nintendo game – Super Mario Run – with initial iOS exclusivity that seems to have set the Japanese games company’s share price off again.
As ever with Apple there was a lot of fanfare and a flood of announcements, none of which seem capable of addressing Apple’s declining market share. “Apple iPhone 7 is a minor upgrade from previous models that does just enough to stay in touch with Samsung and ahead of Huawei, but it is not a Samsung or Huawei killer,” said Mawston.
“Apple captured 12% global smartphone marketshare in Q2 2016, down from 14% in Q2 2015. We forecast Apple to recover slightly and capture 13% global smartphone share in Q3 2016 as a result of the new iPhone 7 launch.”
Initial reaction seems to have been muted, with many observing these launches do nothing to address Apple’s challenges in markets outside of the US and Western Europe, and UK commentators rightly lamenting the price premium. The iPhone is still a good phone, but in the light of its continued inability to offer more than incremental annual upgrades Apple might want to consider toning down its rhetoric a tad.
With Amazon and Google launching smart home initiatives, have the telcos missed out on their chance to cash in on this market?
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