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You can set your clock by the new iPhone

Friday 14 February 2014 | 15:51 CET | Market Commentary

Apple holds an iPhone event every year, and this is likely to take place in September this year again, possibly slightly earlier, in June.

Rumours of its new device are already starting to gather steam, driven by anonymous leaks from suppliers. A larger screen format almost seems a given.

In previous years, Apple has followed a number of strict rules with its products, and based on those, it's possible to make a few observations and projections ahead of the next iPhone launch.

Observation 1: Apple renews top model every year

The original iPhone was followed a year later by the 3G. That was followed by an improved version, the 3GS. In June 2010, the iPhone 4 was introduced, followed by the faster 4S. After the iPhone 5 came the 5s.

June 2007 June 2008 June 2009 June 2010 Oct 2011 Sept 2012 Sept 2013
the iPhone iPhone 3G iPhone 3GS iPhone 4 iPhone 4S iPhone 5 iPhone 5s

Observation 2: iPhones in three segments

Apple sells a top model, a mid-range version and a basic device. Every year a new top model is released, and the existing phones drop down a rung on the ladder. The iPhone 4 was still new in 2010, but a year later it was positioned as the mid-range device. At the moment, the 4S is the basic model, offered free with many subscription plans.

October 2011

Sept 2012

Sept 2013

Top

iPhone 4S

iPhone 5

iPhone 5s

Mid

iPhone 4

iPhone 4S

iPhone 5c

Basic

iPhone 3GS

iPhone 4

iPhone 4S

Apple renews the hardware, but doesn't change its pricing. The recommended price is EUR 100 more as the storage increases from 16 to 32 to 64 GB. To introduce a lower price, the storage memory is reduced, such as in 2011 with the 8 GB version of the 3GS and in 2013 with an 8 GB iPhone 4. Cutting the memory in half justifies the lower price.

Observation 4: models last four years

The 3G and 3GS were together in production for four years. By this autumn, it will be four years for the 4 and 4S. With a three-year product cycle, it makes sense to launch one new model and withdraw one model each year.

With the four-year cycle, Apple needs to come up with something new to maintain the top model's status another year and keep consumers interested. For the 4/4S, this meant introducing an 8GB version. At the top of the range, it also launched a new 64 GB model.

The aluminium iPhone 5 was kept on top for two years by adding a new processor and fingerprint authentication. The iPhone 5 is no longer produced, but the 5s is the same device in terms of hardware, only with a plastic casing. For the high end of the market, Apple added the new possibility of a gold-coloured casing.

What will Apple announce in September 2014?

Given all of the above, we can make a few projections about what Apple will announce this autumn.

Projection 1: Apple introduces a new top model

In line with previous years, the new phone should have a completely new chassis. Rumours about the 'iPhone 6' are already starting to emerge, and a bigger screen seems more than likely. The iPhone 5 has a 16:9 screen resolution, so a bigger screen could take that to 1080p full HD.

Projection 2: the 4S stops production

There are multiple reasons for this. The chassis is already four years old, it's the last model for sale with the 30-pin connector (the iPad 2 also uses this, but this is also likely to be withdrawn within a few months), and it has an older processor.

Projection 3: the 5c becomes the basic model

Apple CEO Tim Cook recently confirmed in an interview what many suppliers and retailers had already said: the 5c is selling much less than the 5s. Cook noted though that the 5c attracts new customers to the brand. This trend should strengthen if the 5c is made the basic model, assuming its price is also significantly lowered.

The 5c with 16 or 32 GB will likely be taken out of production and replaced with an 8 GB model. At the same time, the recommended price should drop by around EUR 200. Half the discount is due to the smaller memory, and the rest for its shelf life and other specifications.

Projection 4: the 5s is the new mid-range model

The mid-range model has the highest sales. The 5s also has 64-bit architecture and the fingerprint authenticaton, for which a growing number of applications are expected.

There is still some uncertainty about these projections. Apple has suggested it's preparing new products, and market rumours point to not one but multiple new iPhones to be introduced this autumn. Apple may also come with an iWatch, but then this was already rumoured a year ago.

That could be a new growth area for the company. Apple has already gone from one to two to three models of iPhone. It could mean that Apple not only renews its top-of-the-range phone, but also introduces a new device at a lower price point.

In that case the "Beautifully, Unapologetically Plastic" iPhone 5c may not stick around. It could end up just a transition model used to extend the 5's product cycle to four years. 

 



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