For Apple's Next iPhone, Don't Expect Big Changes
June 21 2016 - 1:10PM
Dow Jones News
Apple Inc. plans to break with its recent pattern of overhauling
the design of its flagship iPhone every two years and make only
subtle changes in the models it will release this fall, according
to people familiar with the matter.
Among other things, those people said, Apple's newest phones
will maintain the current 4.7-inch and 5.5-inch displays. Those are
the sizes of the larger-display models Apple introduced in 2014,
and refreshed with newer models last fall.
The biggest planned change in this year's phones is the removal
of the headphone plug, which will make the phone thinner and
improve its water resistance, said people with that matter. The
Lightning connector will serve double-duty as a port for charging
the phone and for connecting headphones, they said. KGI Securities
analyst Ming-Chi Kuo said he expects the new iPhone, without the
headphone plug, to be one millimeter thinner than the current
iPhone.
Apple plans bigger design changes for 2017, the 10th anniversary
of the original iPhone. Those changes could include an edge-to-edge
organic light-emitting diode, or OLED, screen and eliminating the
home button by building the fingerprint sensor into the display,
according to people familiar with the matter.
An Apple spokeswoman declined to comment.
In the past, Apple has introduced new iPhones on a "ticktock"
cycle. Apple delivers major design changes every other year—the
"tick" years—followed by software improvements and hardware
refinements in the "tock" years. It isn't clear whether this year's
shift is a temporary or permanent departure from this pattern.
Either way, it comes at a precarious moment for the iPhone,
Apple's most important product, accounting for two-thirds of the
company's revenue. Apple is dealing with the first decline in
iPhone sales in the product's history as demand slows and
once-torrid markets like China cool.
At a meeting with an Apple executive last month, one of the
company's China-based engineers asked why this year's model lacked
a major design change in keeping with Apple's usual two-year cycle.
The answer, one person at the meeting recalled, was that the new
technology in the pipeline will take time to implement.
People familiar with the matter said some features that Apple
hopes to integrate into iPhones, such as curved screens, weren't
ready for this year's models.
Prior big design changes to the phone helped create buzz around
the new models and spur sales by enticing existing iPhone customers
to upgrade. Apple's latest phones—the iPhone 6S and 6S Plus—haven't
generated as much excitement, in part because they closely resemble
the previous year's models.
The introduction of larger-display phones in 2014 triggered a
surge in sales, with iPhone sales rising 37% in the fiscal year
ending September 2015. In the prior year, when Apple introduced the
iPhone 5S with a near identical design to the iPhone 5, iPhone
sales increased 13%.
In a note to clients last week, Credit Suisse analyst Kulbinder
Garcha said he expects "muted" sales increases for the forthcoming
models because he expects them to be a "modest upgrade" to the
existing phones. Mr. Garcha said he expects a "super cycle" for the
following year.
Horace Dediu, founder of Asymco, an independent analysis firm
focused on the mobile industry, said many consumers buy new phones
when they are due for an upgrade under the terms of their wireless
plan, without much concern for new features or design changes.
While other companies try to entice consumers to upgrade phones
with new features, he said Apple "marches to the beat of a
different drummer."
To be sure, Apple has delivered meaningful improvements to the
iPhone even in years when it didn't change the phone's look. For
example, it added a fingerprint sensor to the iPhone 5S, but that
didn't alter the look of the device.
The models introduced last year, while the same size as their
predecessors, included faster processors, new touch-screen features
and better cameras. Apple tried to capture the changes with its
marketing slogan for iPhone 6S and 6S Plus: "The only thing that's
changed is everything."
For years, Apple Chief Design Officer Jony Ive has expressed a
desire for the iPhone to appear like a single sheet of glass,
according to people familiar with the matter. The current design
ideas for the 2017 iPhones are expected to push the handsets in
that direction by eliminating much of the bezel around the display,
with the OLED screen.
Apple hasn't finalized the designs for next year's phones, so
it's possible that these ideas may not be implemented, they
said.
Write to Daisuke Wakabayashi at Daisuke.Wakabayashi@wsj.com and
Eva Dou at eva.dou@wsj.com
(END) Dow Jones Newswires
June 21, 2016 12:55 ET (16:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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