The iPhone 5 was launched yesterday with the usual Apple pizazz. It looks like a good solid update but there’s the inevitable criticism about the lack of NFC, wireless charging, average screen size, etc. Much as I’d like to see a high-end device, Apple doesn’t need a hero phone based on hardware features and it doesn’t take much analysis to figure out why.
First of all, the Apple fanbois is not your average iPhone user. The vast majority of iPhone owners I know are comfortable with technology but they’re not techies, geeks or nerds. If you ask them why they got the iPhone, it’s quite often because they’d heard about on TV or because they’re friend had one. It certainly wasn’t because it had a Retina display or an 5MP camera. Fundamentally, it was “you can’t go wrong with an iPhone” and the specific features are largely irrelevant.
Secondly, let’s assume that the majority of Apple iPhones are sold on a 2 year contract. No-one wants a new phone of a model they already have so there has to be an upgrade path hence there has to be a new phone has at least every two years. This is self-evident. But on the other hand, at upgrade time, the upfront cost of the phone cannot be too high as to put people off. If Apple suddenly put a whole pile of new features into the iPhone, the upfront cost is likely to jump. Consequently, I would suggest that generally Apple will only introduce one significant or costly improvement with each iteration of the phone. And with the iPhone 5, it’s the new screen.
Similarly, people tend to like what they know and the iPhone is well-liked. Apple isn’t going to introduce an iPhone with a 4.8″ screen. Why not? Because a big screen is sufficiently different that lots of people will not want to buy the phone and if we bear in mind the previous point, there has to be a viable upgrade for those on 2 year contracts. Apple is then into the situation of having a range of different devices and having to keep them all fresh.
Finally, this argument wouldn’t be complete without mention of the ecosystem. In many ways, this is the killer feature of the iPhone and Apple needs to keep the apps and the media fresh and exciting. Apple very much knows this – it doesn’t trumpet the AppStore numbers for nothing, though Apple has taken it’s time over the iTunes refresh.
In summary, Apple simply needs to provide an upgrade path that offers better phones than last time and doesn’t alienate existing customers by being too different. Only one or two cutting-edge features are needed to maintain the iPhone’s lead; there’s no need for it to be the best at everything. Much as we might want a hero phone, it’s incremental improvement that will continue to bring in the cash.