Beware the Ides of March

It has been almost a year since the last post on this blog. As a matter of fact, the last post was written on the Ides of March, 2015. Suffice it to say, I have been beyond busy in the world of Enterprise Cloud Computing. Perhaps that is a topic for another blog post, but this one is to discuss the rumored upcoming Apple event next month. March is normally a very exciting month for me as it is Easter Jeep Safari time in Moab, UT, but this March, there will be a second reason for excitement, and it almost seems as though the timing is more than a coincidence.

Traditionally, Apple holds the large press event (usually an iPhone event) in early September, and the new iPhones go on sale in late September. There has been a separate event for iPads farther in the past, usually in October (I believe). It was no surprise that as that product line matured and normalized, Apple would eventually combine it with the iPhone launch event, even if iPad releases were a little further out on the horizon as opposed to the iPhone. Keep in mind, though, that there are many other product lines at Apple, not least of them is Apple Watch. In my humble opinion, there are too many to cover at a single yearly event, and even if they could, it makes no sense operationally to release all products at the same time of the year. Apple really needs to get a solid cadence going with respect to public events that is predictable and spaced out enough to allow the supply chain to ebb and flow in a more even manner.

So, if we know the main yearly event is in September (mainly because iPhone is the largest line of business at Apple today), March makes perfect sense for a second yearly event as it is exactly six months away. I am venturing out on a limb here to posit that Apple may be making this a pattern as opposed to a one time event. We'll know next March I suppose. What interests me most about this March event is the rumored new smaller iPhone that is going to launch.

Bear in mind that all of the following is speculation at this point, but it is interesting to me none the less. The iPhone 5se, as it will be called, will be a smaller iPhone with a 4-inch screen. It seems that this phone is designed to meet the demands of a market that prefers smaller phones. The current iPhone 6s and 6s+ are 4.7 and 5.5-inch respectively. While I do know a very small number of people who prefer small phones, my own experience has been that the larger phones are much better. I moved straight to a 6+ from my 5s and skipped the 6 as I have rather large hands, and the small screen on the 4 and 5 lines was a common complaint from me. Initially, the difference was a major adjustment, but within a week or two, I couldn't imagine going back to the smaller phone. Today, I wish I had an even bigger screen, perhaps 6 inches, but I worry that it would enter the realm of ridiculousness, especially the few times I actually raise it to my ear to take a call like a normal phone.

Aside from the size difference, the phone is rumored to be based on the 5s chassis, with upgraded internals what will help run the newest iOS versions and modern apps. It should also be getting the same front and rear cameras as the current iPhone 6, additional sensors, an NFC chip for Apple Pay, upgraded A and M chips from the 6 line (not sure which yet, but A9/M9 are likely due to economies of scale in manufacturing), upgraded LTE/Wifi/Bluetooth antennas and chips, and same colors as the current 6/6+ line. This all sounds great for someone who really wants that 4-inch screen, but it does leave some unanswered questions.

My main question here is what is Apple's angle with this phone? I do understand that some people want smaller phones, but is it really that many? Is there a large enough market to justify making another phone to address that market? Are there enough "hold-outs" refusing to upgrade from old iPhone 4s and 5s that Apple sees a strategic opportunity to cater to them with this smaller phone? Or, is this a possibly play into a lower profit margin area of the overall mobile device market? I'm fairly certain Apple would not price this so low that it would compete with the plethora of junk Android devices littering that end of the market, but maybe they can price it low enough that the Apple name and quality will draw more people up from that segment into a premium segment of the market.

The other interesting angle here could be Apple changing its product mix and market approach. Growth for the iPhone has been phenomenal, but everyone, including Apple, knows this growth cannot be sustained forever. They need to expand into other market segments. Historically, when a new iPhone model is released, Apple takes the current one, lowers the price, and offers it as the economical option. The new line gets new hardware, including new chips, and the old models keep their current hardware. At the scale Apple has to manufacture at today, it may be becoming a problem to maintain two separate supply chains for older and newer models, not to mention two supply chains within those for the larger and smaller phone. It may make sense at this point to increase the product mix to include three phones (small, medium and large) which share many or most of the same internal components, thus simplifying the supply chain and shrinking the manufacturing delta between the models.

I suppose we will find out on March 15 when we see the real specs on the phone and can compare all of the components with the others in the current 6s and 6s+. We will also see if Apple discontinues the sale of the only the older 5s, or also the 6 and 6+. I'm also interested to see if there will be any other announcements, perhaps a new Apple Watch?

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