New devices and one service announced in bid to make Apple trendsetter again
Fans flocking to order new devices but some details leave analysts wondering
A WEEK after Apple Inc’s much-awaited new announcements, the industry is still buzzing and busy analysing its impact on the consumer tech ecosystem.
On Sept 9, the Cupertino, California-based company unveiled three new initiatives: Two new smartphones, iPhone 6 and iPhone 6 Plus; a wearable electronic watch called Apple Watch; and a new payment service known as Apple Pay.
The launch was held at the Flint Centre for the Performing Arts, the same spot where Apple’s cofounder the late Steve Jobs introduced Macintosh in 1984, and the world’s spotlight was trained on what new chief executive Tim Cook would have to say.
Although traditionally a very tightly-controlled affair, Apple’s announcements this time around have been anything but.
Speculation had been rife for months as to what the world’s most valuable tech company would introduce to the world, particularly around the Apple Watch, which many thought would be called iWatch, along with its new payment service Apple Pay.
The details of the announcements can be found on various news portals but the two I feel are especially worth reading are in the BBC and The New York Times.
So what do pundits have to say about the announcements?
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Not the only game in town
Let’s deal with the iPhone 6 announcements first. A look at the specs for the new devices would lead most to believe that they aren’t as revolutionary as some had expected them to be.
Improvements to camera and screen resolution, a faster processor, more memory, support for more Long-Term Evolution (LTE) networks, a thinner body, and a slightly better battery life were more or less expected.
Still, being an Apple product, scores of consumers have already pre-booked their devices which are due to ship only on Sept 19. Due to the exorbitant demand, Apple has announced that it is expecting to see delays in shipping.
Most analysts are generally in agreement that the new smartphones have given a breath of fresh air to Apple and that they will sell well in the coming months. But for some, questions remain.
Neil Shah, research director at Counterpoint Research, says that the larger iPhones may increase the total addressable market for Apple in the premium segment as consumers have been increasingly flocking to larger screen smartphones for some time now.
However, the analyst believes that while this may be true, there is little ground-breaking technology in its new lineup, he tells Digital News Asia (DNA) in an email.
“The phones are obviously not a game-changer on paper, and consumers who have already embraced devices such as the Samsung Galaxy S5 and Note, 4 or LG G3, will find it hard to switch, although Apple now has an alternative for consumers to think twice,” he said, adding that the rest of the Android camp is therefore now under pressure.
That said, Shah believes that Apple has lost the lead which it once held in high-resolution display technology, to the likes of more vertically integrated Samsungs and LGs of the world.
“The apps redesigned for a larger form-factor were important but still behind on what Samsung is doing in the larger smartphone screen category.”
While iPhone fans would be dying to get their hands on one of these new devices, it's my opinion that the playing field isn’t what it used to be when Apple used to lead head-and-shoulders above the rest of the competition.
This is where I think Stephen Hutcheon, innovation editor at The Sydney Morning Herald, was spot-on in his column where he argued that while the iPhone 6 is the newest and the greatest, it’s not essential to consumers.
Yes, the new smartphones will do well in Apple's traditional stronghold in the United States, if early reviews of the two devices are anything to go by.
But I believe the jury's still out for the rest of the world.
For me, it would make sense to upgrade should you want to stay in the Apple ecosystem and currently have a worn-out, battered iPhone 4 or 4s. But if you own an iPhone 5, the new lineup isn’t the only classy smartphone in the market to run to, especially if you don’t mind switching operating systems.
And if you're thinking about the Apple Pay service (see below), there isn't any incentive for consumers to switch as it is only available in the United States for now, and won't see the light of day in Asia for some time to come.
For a list of your options, check out what CNET has to say.
Smartwatches still need to tell time
The much-hyped Apple Watch is being touted as a true amalgamation of technology and style and would, in my opinion, only please the middle ground and not the niche fashionista nor the true fitness aficionados or medical-conscious crowd.
Paul Jackson, practice lead of media and entertainment at Ovum, said that the Apple Watch has a lovely design and features like a sapphire screen, built-in heart-rate monitor and haptic feedback, and shows the usual level of technology leadership from Apple.
Meanwhile, J.P. Gownder, vice president and principal analyst at Forrester Research, argued that Apple will legitimise and create the mass-market wearables category.
He believes smartwatches shouldn't be an exercise in screen miniaturisation – instead, they should help users interact with the physical world more effectively.
That said, Ovum’s Jackson noted the high price of the Apple Watch (US$349) – and the fact that it needs to be paired to the new iPhone 6 or at the very least the iPhone 5s/ 5c to fully function – is a definite disadvantage to consumers.
But perhaps the biggest letdown was best expressed by financial journalist Felix Salmon, who sarcastically pointed out that the primary purpose of the watch is still to tell time and that aside from all its touted gadgetry, this is no different in a smartwatch.
Writing in his column on Seeking Alpha (registration required for full access), Salmon noted, very succinctly, I might add, that a watch battery should last for months and that even watches which don't have batteries will last for a couple of days, either by winding them or by wearing them.
“Apple has been worryingly silent on the subject of battery life, but there's no indication that this thing will last even 24 hours,” the former Reuters financial blogger wrote. “Watches might be complicated on the inside, but they're simple on the outside, and they should never come with a charging cable.
“Of course, the Apple Watch is more than just a watch. But it's also less than just a watch, which is a problem … behind all the shiny options (sport, gold, different straps) the watch itself is always pretty much the same: Thick, clunky, a computer strapped to your wrist. Which is great, I suppose, if you're the kind of person who likes to strap a computer to your wrist.”
Ovum’s Jackson concurred, noting that given similar watches with fewer capabilities tapping out at 12 hours, it’s unlikely the Apple Watch will do much better.
“The form factor and nature of today’s chipsets, many still designed with smartphones in mind, simply can’t accommodate larger capacity batteries and more measured performance.
“This is still the major deal breaker for mass adoption – sure, tech firms have trained us to charge our phones every day, but devices like watches, fit bands, glasses etc., need multi-day capacities,” he argued.
To me, the Apple Watch may bear the hallmarks of a great looking high-quality device for the affluent upper class, and it may gain some traction initially, but it is more about locking in consumers who are already invested in Apple’s products, given the fact that it only fully functions when mated with iPhones and not as a standalone device.
This is consistent with how Apple always designs its products, and while arguing that this strategy gives the consumer the best user experience, it nonetheless frustrates consumers who want a more open ecosystem for their Apple devices to work with other gadgets in the market.
And this is why I believe the Apple Watch won't be ncessarily a hit apart from those diehard Apple fans, as illustrated by a recent poll by Tolunda QuickSurvey, Yahoo! News reported.
Counterpoint’s Shah put it this way: “The real benefits of smartwatches are still up in the air and there is no latent demand from the consumer’s end. The real traction of smartwatches is yet to be seen in the market and the overall attach rate to the total devices to be sold also seems to be modest.”
Online payment challenge
Finally, the impact of Apple’s Pay point-of-sale (POS) payment service will be limited, given that it’s only available in the United States for now.
According to Ovum senior analyst Gilles Ubaghs, the Apple Pay service is likely to remain niche for some time as overall device penetration remains relatively low and the service remains US-only.
“More critically, the in-store experience provides little major incentive for use at this point, and while Apple benefits from its iTunes membership, the lack of tie-in to loyalty or other features may at least initially limit consumer interest beyond early adopters,” he said.
In particular for Asia, Counterpoint's Shah (pic) said he believes the use of its NFC (near-field communication) secure element would be tightly controlled by Apple, which means other players in this space such as operators, retailers and financial institutions will be bypassed, a trend also noted in a Reuters report recently.
“So for NFC-based Apple Pay to take off in markets outside the United States would be challenging,” he said.
Shah said the potential for Apple would be rather in the remote payment solution space, where app developers will be able to integrate with Apple Pay APIs (application programming interfaces) and will be more powerful than a strict NFC-based POS solution.
“In cash-friendly emerging markets, it's going to be a challenge for Apple and it will look something similar to Amazon or PayPal in emerging markets.
“But the ability for the Apple ecosystem to scale outside developed markets of United States, Japan, South Korea and Europe would remain quite limited and may be an impediment for Apple Pay services in emerging Asia,” he said.
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