Apple Launches ‘New’ iPhone, Imperceptibly Different to Old iPhone

On Tuesday Apple held a product launch.  In years past, these have been eagerly awaited events shrouded in secrecy and filled with excitement and surprises on the day; this year most people knew that Apple was releasing two new phones, the iPhone 5S and 5C (in the past, no-one even knew the names/numbers of the products being released) and the latest update to its iOS software.

There was hope that Apple might have some surprises in store – maybe the much discussed/rumored ‘iWatch’, and perhaps a new generation of iPads, too.  None of these extra releases occurred.  And there was some uncertainty about exactly what would be exciting and new and improved on the new high-end phone (the iPhone 5S) and what would be done to create a new lower priced phone to open up new markets for Apple (the iPhone 5C).

Some reports surfaced of iPhones with huge six-inch screens.  Others suggested bargain basement priced entry level iPhones.

The iPhone 5S

But, in reality, what did we get?  The iPhone 5S is almost identical in appearance to its predecessor, the iPhone 5, and suffers from the same small and inadequate screen size as does its predecessor.  The iPhone’s strongest competitor, the Samsung Galaxy, released its latest model this year (the S4) with a further boost in screen size from 4.8″ to 5.0″, and a huge leap in resolution from 720 x 1280 up to 1080 x 1920 pixels, but Apple – once renowned for the leading edge quality of its displays, is sticking to its small 4.0″ display and meager 640 x 1136 pixel resolution.

The wishful thinking, hope and hype that anticipated a larger screen came to nothing, just an increasingly behind-the-times small screen.

There is a faster processor internally, but no-one would describe the current iPhone 5 as being underpowered, the phone has perhaps a little more battery life (always a good thing) and the phone now has a fingerprint reader as a new way of logging on to the phone instead of entering a password (it remains to be seen if this is truly useful or a gimmick that adds no value).  The rear camera also has a couple of tweaks, and – oh yes, drum roll please, the phone comes in some different colors, too.

Is the company that once prided itself on innovation now reduced to ‘innovating’ on case colors alone?

The iPhone 5C

Talking about colors also prompts mention of the iPhone 5C.

Apple’s lifetime marketing model for all products has always been to ‘own’ the high-end and to derisively ignore the lower larger part of the market, but this has unsurprisingly handicapped the sales of its iPhones into more budget conscious and less affluent countries.  So, according to doubtless carefully planted leaks, Apple decided to bifurcate its iPhone product this time, with both a new high-end product (the 5S) and an ‘entry-level’ product that would win market share in countries such as China and India where apparently price is more important than ultra-cutting edge features.

This is a sensible strategy on Apple’s part.  With its ever-increasing iTunes range of services and products, Apple makes money not just from the one-time sale of a phone, but from all the ongoing sales of apps, subscriptions, music, books, movies, and everything else that ties in to the phone.  Indeed, the value of all these related income streams have been hinted at in rumors that Amazon might give its own branded smart phone away for free – just so it can make money on all the ongoing income streams associated with the typical phone and its usage.

We all wondered which features Apple would sacrifice in its lower cost model, and how aggressive in pricing it would get.

The answer came as a surprise.  The new iPhone 5C is essentially the same as the 5S, except for no fingerprint reader and a plastic case (but available in plenty of colors).  The camera has a couple less fancy features, and the processor is the same as in the iPhone 5 rather than the faster 5S, but otherwise, the two units are close to identical, and also the 5C is very closely identical to the iPhone 5.

With the two phones being so similar, you’ll not be surprised to learn that their pricing is very similar, too.  There’s only $100 difference in price – now that seems a lot when buying a subsidized phone for either $99 or $199; but becomes much less significant when buying an unsubsidized phone for either $549 or $649.  And therein lies Apple’s problem (or, at least, one of them).  Nearly all the phones sold in price-sensitive countries are sold without a contract and price subsidy.  So is a $549 phone materially more affordable than a $649 phone?  Not really, and not when competitors are selling Android smart phones for about half these prices.

Nothing New At All

There’s another disappointment in this release, too.  Basically all Apple did was bring out a new phone, the same as every year, and drop the price on their previous model phone, also the same as every year.  The only real difference is that this year they have renamed the previous model phone as the 5C instead of continuing to call it a 5, and have slightly changed its packaging.

So, a new strategy, it is not.  A winning strategy, it is unlikely to become.

All in all, a massively disappointing release.  A new flagship phone little changed from its predecessor, and falling further behind the market’s ‘state of the art’ – a position Apple once defined, but now struggles to catch up to.  A new low-priced phone that is neither new nor low-priced, and – well, that’s about it.  The latest version of their operating system, with no breathtakingly amazing new ‘must have’ features.  Nothing else at all.

To be fair, this is not entirely Apple’s fault.  Are smart phones becoming as generic as their predecessors, the so-called ‘feature phones’ also became?  Is nearly everything that a phone can do now enabled and available – is hardware now becoming like software, with no significant remaining gaps in functionality and less reason to eagerly upgrade as each new release comes out?  It seems so.

What Should You Buy?

Talking about upgrading, should you buy a new iPhone 5S or 5C?

Probably not, if you already have an iPhone 5.  And if you have an iPhone 4 or non-smart phone in general, do consider getting an Android phone as a now better alternative to the iPhone, the same as most other people now do, too – oh yes, and the same as I’ll be doing, probably when the new Google Nexus phone is released, hopefully fairly soon.