GOING BIG ON SMALL
Apple appears ready to unveil smaller iPhone and iPad models to help grow the bottom line,
Apple looks as though it’s planning on going small in an attempt to grow the bottom line.
With a press event being held Monday, most of the pre-event speculation, which has been correct for the past few launch events, has centred on the company’s rumoured plan to launch a smaller iPhone.
The company is expected to launch the iPhone SE, a four-inch screened model, which will probably replace the 5 series at the bottom end of the company’s smart phone product line. In terms of improvements, the SE will be able to take Live Photos and support Near Field Communication for Apple Pay, a technology that allows phones to touch terminals for payments.
As well, the company is rumoured to be announcing a 9.7-inch iPad that has some of the capabilities of the larger iPad Pro, including a more powerful chip, smart keyboard and pencil support, which will probably replace the original iPad Air.
Additional Apple Watch bands, a new versions of the Watch and TV OS and iTunes are also rounding out the speculation about what the company could announce. There’s also always hope for a “one more thing” surprise.
Apple’s bigger product announcements generally happen in the summer, with a September launch of new products right in time for holiday season.
The thinking behind these products, particularly with the smaller phone, is aimed lower-tier or entrylevel product.
While a smaller phone might make Derek Zoolander happy, most analysts see this move as a way for Apple to go a little cheaper to get a more price-conscious market, but also caution that it’s still Apple, and for them, less expensive is a relative idea.
“I don’t think Apple plays in the cheap market. I would expect this device to be positioned as a replacement for the 5S for example, which I think is about $625 Canadian, which is quote-unquote entry level for Apple, which in reality is more mid market in terms of pricing,” said Krista Collins, manager of mobility & consumer research, IDC Canada.
Collins warns that the forecast for smartphone growth in Canada in 2016 is more pessimistic than 2015, which saw a double cohort of upgrading consumers, new two-year plans and aggressive promotions from carriers. She also points to a slowing economy that may cause users to wait to upgrade and the lower Canadian dollar likely leading to higher hardware costs as factors.
Of course, those reasons could be a cheaper iPhone might do well.
“They won’t call it budget, they won’t call it their low-market entry, ever, but that’s what it is,” said Kaan Yigit, president of Solutions Research Group, an analysis firm that tracks Canadian’s Digital Life.
“(In Canada) 49 per cent of smart phones are Android and Apple has been stuck around 36-38 share. They are asking the same question that they haven’t had to for a while, which is where is the growth?”
Yigit says the higher-end phone market is mature, but there may be room at the lower end, with entry level or younger consumers, emerging markets or consumers looking to upgrade at a more reasonable price than for the company’s expensive flagship models. While it will still have Apple’s premium feel and build, a smaller iPhone will be cheaper for the company to produce.
“I think this makes sense in terms of the continuum of their product line, let’s use the marketing speak, good, better, best,” said Horace Dediu of longtime Apple watching analyst firm Asymco. “Apple has been positioning older products as the lower end, but now that there are bigger-screen phones, they can create a product with a smaller screen that takes that ‘good’ spot and still has the premium feel.”
Dediu points out that the lower end is where Apple has been trying different things for a while, like keeping older models around or the 5C, which was a new model with a plastic body, instead of more expensive metal.