Business Technology

Friday 23 March 2018

Adrian Weckler: Milestone iPhone8 to lift Apple

More than half of Apple’s revenue now comes from the iPhone
More than half of Apple’s revenue now comes from the iPhone
Adrian Weckler

Adrian Weckler

What can we expect from the new iPhone? Will it really cost €1,000? Even if it does, is it worth getting one?

It's that time of year again. This Tuesday, Apple will unveil the company's latest iPhone. It's a bigger deal than usual, because it's the gadget's 10-year anniversary. It's also the first event scheduled for the Steve Jobs theatre, located in the futuristic new €1bn Apple campus.

Because of the 10-year milestone, Apple is expected to throw the kitchen sink at this handset. Due to supply chain leaks, we already have a good idea of what it might look like.

It will have a bigger screen, but not a bigger frame. This is because it will expand the display out to the edges of the handset in a similar way to handsets such as Samsung's S8.

That screen may be made of plastic rather than glass, allowing it to be thinner and have a longer-lasting battery life.

It's also expected to do away with the home button, possibly replacing it with gesture control. This could be a pretty big change to the way we use our iPhones, with the Home button relied on for functions that range from resetting to screenshots to mobile payments.

The cameras will again be improved, with stabilisation included in both dual cameras on the rear of the phone.

But it may not be the actual hardware that people end up talking about most.

Apple is said to be adding some new 3D-sensing functionality to its cameras, which could help kick-start 'augmented reality' features and apps.

While this sounds nerdy, it could be a big deal for apps and everyday activity. You might be able to use your phone to measure anything just by pointing at it. Companies such as Ikea are already redesigning their apps to take advantage of this. The new iPhone should allow you to virtually place any furniture you are thinking of buying into one of your rooms to see what it would look like.

Maps is another obvious beneficiary. Imagine if your phone literally showed you where to turn on the street, as opposed to on a drawn map of the street. Or how about holding it up and it point an arrow directly at the building you wanted to get to?

Both scenarios have been demonstrated already as contenders for Apple Maps using its ARKit platform.

Then there are games. While Pokemon remains the biggest example yet of augmented reality appealing to people, it has been held back by so-so cameras and phone computing power. The iPhone 8 could establish a baseline for both, making the tech work a lot better.

Look, too, for a rush of marketers trying to take advantage of the new tech with location-based competitions, celebrity geo-location or virtual installations.

Will this be enough to keep Apple close to the top? Last week, Huawei announced that it had overtaken Apple in sales over the past two months, making it the world's second-biggest phone manufacturer. It has achieved this largely by its strong performance in the Asian market and rising fortunes in Europe.

However, nothing gives Apple sales a boost like a new iPhone. If the supply chain leaks are to be believed, there may be three new models: upgrades to the existing iPhone 7 and iPhone 7 Plus versions (although with proportionately larger screens, as mentioned above) and a new premium model.

If this is the case, it should give an even bigger kick to iPhone sales with six clear models on offer (Apple keeps the last-generation versions on sale and also has the small iPhone SE).

All of this comes against the background of phones utterly taking over from other types of computers. When is the last time you used a home PC for anything other than work or specialist purposes? Laptops remain fairly well used in the home, but an increasing portion of that is simply to get to Netflix or a video player on a larger screen. The idea of defaulting toward laptops to send emails or look up information is long gone.

As for public spaces, phones are now used more than umbrellas. Look at the seats in any train station, airport or fast food restaurant. Look down a public pavement. If people aren't gazing into their phones, they're holding them in one hand while they come up for air.

Recent international research claims that Irish phones are the most used for mobile video. Looking around, that seems about right. Buses are full of people watching videos on Facebook, YouTube, Snapchat, Instagram and TV streaming apps.

Screens are getting larger, as are monthly data caps. In cities and towns, mobile speeds of over 20Mbs (and up to 100Mbs in areas such as Dublin) are now common.

Nevertheless, Apple is depending on the iPhone pretty heavily. Over half of the company's revenue now comes from this one device. And in a smartphone market that is showing stagnant growth levels, it now needs to grab market share from someone else.

That said, the company has not received enough credit for the other product lines it has grown. The smartwatch market is a good example. Sometimes dismissed as a fad, it's now a €9bn global industry, with Apple hoovering up well over half of the revenue. There are few companies that will ever have a single product line garnering €5bn. Yet when Apple does it, it is dismissed, simply because it's not the next iPhone.

The tech giant is also lining itself up to enter the TV production business in a significant way. Reports claim that it is earmarking up to €1bn on original content, which would place it, at a stroke, in the spending arena with powerhouses such as HBO or Amazon (Netflix has an annual budget of up to €5bn).

Apple's shares frequently slide a little when a new iPhone doesn't have headline-grabbing new features. But even if whatever Apple releases doesn't immediately wow the tech press, there is still a huge, loyal iPhone user base that will reliably upgrade to the new handset.

In short, don't believe any reports you read that suggest Apple is doomed.

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