Three Key Takeaways from Apple’s September 2017 Launch Event

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3Q 2017 | IN-4741

Today, at a special event highlighting the tenth anniversary of Apple’s iPhone smartphone, several product announcements were made. However, three areas need to be emphasized as they impact the mobile device market.

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What Wasn’t Said at the September Apple Launch Event


Today, at a special event highlighting the tenth anniversary of Apple’s iPhone smartphone, several product announcements were made. However, three areas need to be emphasized as they impact the mobile device market.

  • The TAM for Apple Watch remains unchanged even with the introduction of LTE-enabled models.
  • Apple commits to Qi wireless charging on new devices and bolsters the aftermarket accessories opportunity by implementing an existing technology.
  • Establishing new value in the eyes of smartphone consumers as well as financial investors with the launch of iPhone X.

New Apple Watch and Embracing Wireless Charging Express Success on Two Different Scales


Apple Watch Series 3: The addition of integrated cellular certainly frees consumers from carrying their iPhone with them always, but it doesn’t free audiences from owning an iPhone. The new Watch uses SIM number sharing, resulting in the use of the same phone number on both the Watch and iPhone. However, without an iPhone-free option or Android app, the total available market (TAM) for Apple Watch remains unchanged. Claims of Apple Watch as the most popular smartwatch will continue, though we wonder what the opportunity really could have been if Apple got out of its own way. Perhaps the current strategy is a stepping stone towards Apple Watch becoming an alternative device to an iPhone in years to come. Just not this year.

Wireless Charging: Apple has gone all-in with wireless charging by adopting the Qi specification from WPC. The Watch Series 3, iPhones 8 and X, and an optional new charging case for AirPods support Qi charging and 3rd party charging surfaces. Apple intends to launch its own multi-device charging surface, called AirPower, in 2018. The announcement of Qi support clears the way for accessories makers to focus their efforts on developing for a single wireless charging standard that is supported by the two leading smartphone makers: Samsung and Apple.

iPhone X: Setting the Stage for the Future of Smartphones


The iPhone portfolio now consists of three distinct models: iPhone X, iPhone 6s / iPhone 7 / iPhone 8, and iPhone SE. Apple has fallen victim to its own success. While the first iPhone model announced 10 years ago set Apple apart from other mobile phone makers as the pioneer in smartphones, its market leadership quickly diminished as hundreds of other companies introduced their own products.

Apple must respond to the needs of multiple constituents, including financial investors and consumers, that have very different motivators. Financial investors want to increase profitability. Consumers want to participate in the adoption and use of innovative technologies and be associated with creative brands that reflect their personalities. The iPhone product line has not been able to adequately address these goals at the same time.

iPhone has not been accessible to all world markets. Initially, the limitation was carriers being able to offer LTE services, but this has been addressed through upgrades in their infrastructure and the availability of spectrum for LTE use. The remaining limitation has been the price. Two different entry-level iPhones have been announced: the iPhone C and the iPhone SE. Price-sensitive markets, such as India, have remained laggards in iPhone adoption even with these attempts to deliver a more affordable iPhone solution. In short, Apple has been unable to become “everything to everyone”.

How is Apple responding to these challenges? iPhone X (pronounced “ten”) establishes a new value level for Apple customers that want a premium, futuristic device. A new price point is also implemented to reflect the flagship nature of iPhone X. A similar tiered smartphone offering already exists at Samsung, while other leading OEMs are expected to follow. This new class of iPhone affords Apple the opportunity to separate market and investor expectations. Low-cost iPhone solutions, such as the iPhone SE, can be prioritized for markets including India. iPhone X enhances the profitability for Apple smartphones, which will offset the downward price pressure and profitability at the low end of the market.

The new iPhone X is not a smartphone for every consumer or businessperson. It is for the elite; for those who want to feel they are part of the future. And therefore, we should expect the iPhone X to be in high-demand and limited supply for the foreseeable future. Supply chain rumors claim that iPhone X is not yet yielding production volumes at similar levels to previous iPhone introductions. Expectations will need to be set that participating in a glimpse of the future will take some time to materialize. ABI Research expects supplies of the new premium iPhone X models to be limited through 2017 and into the first half of calendar year 2018.

And let’s not forget about AI and machine learning (ML). On-device ML is relatively new to the smartphone world and Apple has joined the fray with its A11 processor. Learn more about the use of ML on a range of devices from wearables to mobile devices and smart home controllers to industrial automation controllers in a new ABI Research market data on Artificial Intelligence & Machine Learning (MD-AIML-101).


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