TThe Apple rumor mill is working at full pace these days, but we are starting to gain some insights about what to expect from the Cupertino giant in the upcoming month. AllThingsD claims that Apple will be holding the launch event on September 10, and I trust them to get the news right 9/10 times. Moreover Jim Darlymple hasYEP’d it, so that’s a double confirmation.
Now coming to what Apple is expected to launch on September 10th – the successor to iPhone 5. Whether it’ll be called iPhone 6 or iPhone 5S isn’t clear, but general expectation is that it’ll be named iPhone 5S. The blogosphere is abuzz with Apple releasing a ‘cheap‘ ‘lower-cost’ iPhone along with iPhone 5S. Even staunch Apple fans are finding a case for that to happen on September 10th. More on that later, let’s start with iPhone 5S first.
iPhone 5S: Top-end
The latest flagship phone is expected to retain the size and looks of iPhone 5. Even though every Android flagship device is being released with a screen bigger than 4.5-inch, Apple is expected to stick with the 4-inch display. iPhone 5 is still possibly the best looking phone (HTC One owners will call foul, I know), so there is no need for Apple to do something drastically different with iPhone 5S. As per the rumors, the 5S is expected to come with Sharp’s IGZO displays which we saw in CES earlier this year. The resolution bump isn’t expected (no 1080p), but it’ll be an upgrade in terms of contrast, black levels or viewing angles. Moreover, the new display technology is expected to draw lesser power, which will in turn improve the battery life.
Camera is also expected to get a major upgrade. Some of the leaks have pointed towards a new 13-megapixel camera sensor with f/2.0 aperture accompanied by a dual-LED flash. All these would mean even better low-light performance. There are some software upgrades to the Camera expected as well, since iOS 7 is known to support video recording at 60fps and Instagram like filters built-in.
The latest and biggest rumor is the presence of a fingerprint (biometric) scanner in iPhone 5S, courtesy, Apple’s acquisition of AuthenTec in 2012 for a whopping $356m. Assuming Apple has been working since July 2012 with AuthenTec, the expectation for a fingerprint scanner looks a possibility. Moreover, this patent application almost nails its presence in iPhone 5S. With Android pushing the software features and OEMs pushing the hardware specs, fingerprint scanner could well be the ace Apple will pull out its sleeve this year.
iPhone 5C: Lower-end
John Gruber is making a strong case for the lower-cost iPhone from Apple next month. Look at the way he keeps stressing ‘lower-cost’ and ‘lower-priced’. That’s because, iPhone 5C isn’t expected to be ‘cheap’. Apple isn’t known to bring out cheap products, though they’ve successfully pushed the boundaries with iPad, iPad mini and iPods. But the dwindling marketshare for iPhone will be pushing them to bring out a lower-priced iPhone along with their new flagship phone this year.
During the quarterly earnings last month, Tim Cook explained how the drop in China sales has impacted the overall share of iPhone, and he immediately flew down to China. Reports suggest that his China Visit was to discuss the lower-priced iPhone with carriers, specially the China Mobile. So the new iPhone 5C is aimed more at China market than anywhere else.
IPHONE 5C: EXPECTED PRICE & SPECS
There have been all sort of rumors and leaks surrounding the possible hardware of the lower-cost iPhone. What most people claim and agree upon is that it’ll be made of plastic and will come in multiple colors. What’s not clear is the internals. More on that later, but let’s talk about the expected price.
Gruber makes a smart analysis about how Apple will phase out iPhone 4 and iPhone 4S from the market, and will instead focus on iPhone 5S, iPhone 5 and iPhone 5C. So, logically speaking, iPhone 5C should be replacing the iPhone 4. Considering iPhone 4 is being sold for ‘free’ with 2-year contract in US and other subsidized markets, iPhone 5C is expected to do the same as well. But what about unsubsidized markets like India? Gruber expects Apple to be pricing the iPhone 5C close to iPhone 4, i.e $399 or $349 (approximately Rs.22,000 in India). As Naren Balaji points out on Twitter, Gruber might be deliberately setting a high price expectation. In India, iPhone 4 is being sold at around Rs.20,000 (~$322) and iPhone 4S is being sold at around Rs.26,000 (~$420). Considering these are year old prices, Apple might actually manage to price iPhone 5C for as low as $299 (~Rs.18500 in India), specially for the 8GB model (like what Google did with Nexus 4). Initially, this might look a bit too aggressive for Apple, but taking a look at probably specs should help us understand it better.
Piper Jaffray analyst Gene Munster predicts that the iPhone 5C will not come with Siri and few other software features.
In terms of the phone itself, we expect the cheaper phone to have a plastic casing, 4″ display, and lower end internal specs (processor, camera, memory, etc.) than the 5S/5 line up. Additionally, we believe that Apple may exclude some software features, such as Siri, which we note was not an option on the iPhone 3GS or iPhone 4 upon launch.
As Gruber says, it’d be a disaster for Apple if they indeed release iPhone 5C sans some important software features like Siri and Airdrop.
Apple can withhold cutting edge software features from old devices; they can’t do that for brand-new ones. There can be no penalty for buying a lower-priced iPhone 5C, only rewards for splurging on the higher-priced models… The 5C is not about selling a piece of junk to some sort of unwashed masses; it’s about continuing to push the price down to expand the iPhone’s market without changing what the iPhone brand stands for
Very true. And we believe Gene Munster is wrong here. iPhone 5 is expected to replace iPhone 4S and 4S did support Siri. iPhone 4 couldn’t support Siri because it lacked a noise-cancellation mic. It’s true that iPhone 4S isn’t getting Airdrop, but that’s because it lacks 802.11a and dual band WiFi. In fact, iPod Touch 5 which uses the exact same processor as iPhone 4S, but will still be getting Airdrop in iOS 7. We expect iPhone 5C to be running the same Apple A5 processor, and to be closer to iPod Touch 5 in terms of hardware. Without glass, aluminum and possibly LTE, Apple will be able to lower the making costs of iPhone 5C.
Naren also points towards the surprising move Apple took with the fifth gen iPod Touch last year. They dropped the 5 MegaPixel rear camera all of a sudden without providing a valid explanation. Naren believes that this happened because Apple needed those components for iPhone 5C. Not a far-fetched thought right? That’s one way they can ensure iPhone 5C doesn’t sabotage the sales of iPhone 5. So, a 5-megapixel camera on iPhone 5C, an 8-megapixel camera on iPhone 5 and a 13-megapixel camera on iPhone 5S. In short, we expect iPhone 5C to be just like iPod Touch 5 with a rear camera and calling capabilities.
Conclusion
To summarize, we expect Apple to remove iPhone 4 and 4S from the shelves, and introduce iPhone 5S and iPhone 5C on September 10th. We think iPhone 5S will be priced at $199 (with contract), iPhone 5 for $99 (with contract) and iPhone 5C for free (with contract). In unsubsidized markets, we expect the prices to be $649, $499 and $299 respectively (excluding taxes). In India, We expect them to be priced around Rs.20k, Rs.34k and Rs.45k respectively.
