Apple Continues to Move Markets

Apple is often credited for launching new markets and product categories, but contrary to what some might believe, Apple is often not the first to market. Products like the iconic iPod and iPhone revolutionized their respective markets, but Apple was not the pioneer that discovered a new product class, although it does get deserved credit for media tablets. In these cases, Apple refined the concept and, along the way, bucked some trends, setting a new standard in the process; yet, despite continued financial success, a growing number of critics feel that Apple has lost its “mojo” and has fallen into catch-up mode. To the critics’ credit, Apple did trail Samsung with its larger phone sizes and its smartwatch. In a similar vein, Apple is only now introducing dual cameras, OLED displays, and wireless charging (phone), so it is not surprising that some within the popular press viewed the news as pedestrian, but the announcements at this event will do more to change industries than many of Apple’s previous launches. 

Several markets will greatly feel the impact of Apple’s recent announcements and the iPhone X (“Ten”) in particular: wireless charging, social and AR/VR, and online video. For more details on the implications for the mobile devices market, see the recent ABI Insight, “Three Key Takeaways from Apple’s September 2017 Launch Event.”

Samsung should be credited for making a valiant effort to push wireless charging forward, but its decision to include a dual-mode (PMA and Qi) receiver allowed both sides to claim support, even though Samsung only sold Qi chargers. Retail locations like Starbucks could continue to support PMA (through Powermat) because Apple users could buy dongles. Apple’s decision to solely support the WPC’s Qi standard, however, sends a clear message to the industry, particularly given the relatively minimal additional cost to support dual-mode receivers.

This decision could have put Starbucks in an awkward situation; continue to support PMA only and force iPhone X and 8 users to purchase dongles or support both Qi and PMA. Just 3 days after the event, Starbucks and Powermat have already said they will add support for the iPhone’s wireless charging, which suggests the retailer will eventually support other Qi devices as well. Considering Apple’s considerable pull within the accessories market and accommodations sector, this is a massive blow to the AirFuel Alliance; in 2015, ABI Research proclaimed that Qi would continue to lead throughout the forecast window and, while at minimum it will remain true, that proclamation might end up being too conservative.

The addition of an OLED screen to the iPhone X led some to question why Apple did not take the VR plunge, along with its push into AR. As a side note, only Apple can add an OLED display, make the statement “the first OLED display great enough to be in an iPhone,” and generate press headlines like:

• “OLED vs LCD: How the iPhone X’s display changes everything”
• “The iPhone X has an OLED screen—here's what OLED is and how it's different from past iPhones”
• “The iPhone X’s new OLED screen is sort of a big deal”
• “iPhone X Will Not Suffer from OLED Burn-in Thanks to iOS 11”

All of this sounds a bit ridiculous when you consider that Samsung has been using OLED displays for years (as have other manufacturers), is likely supplying Apple with the OLED display or the iPhone X, and burn-in has rarely been cited as an issue with OLED displays on smartphones (and none of those devices had iOS 11). As for VR; Apple, like Microsoft (regarding Xbox One X) likely eschewed VR because the company felt the market was too nascent and not refined enough to be included. While Apple’s push into AR is significant (and will be covered in a separate insight), the front-facing “TrueDepth” camera should be one of, if not the key storylines coming out of the launch event. The sensor array is robust, boasting standard 7 MP RGB camera, proximity sensor, and ambient light sensor, alongside a flood illuminator, infrared camera, and dot projector. This is comparable to Google Tango’s standard array, dedicated to face ID and tracking.

Again, Apple was not first (Google’s Tango, Intel’s RealSense, Microsoft Kinect, etc.) to use depth cameras, but most implementations and prototypes have put the depth sensors on the back of the device (Kinect and similar tracking peripherals aside). This enabled more accurate and robust AR applications, so it might seem paradoxical for Apple to make a strong push into AR (e.g., ARKit), but then put the depth cameras on the front. Cue the Animojis.

While this segment of the event drew some laughs at how ridiculous some of the demos looked, it also could prove to be a monumental addition to the market. Emojis, stickers, virtual items, etc. are already well established in the social and communications markets, but Animojis offer something entirely new. We are often asked what the killer app might be for technologies like computer vision within the consumer space, and while some neat demos like furniture placement are interesting, they often fail to generate a great deal of excitement from users; in part because there is limited repeatability (how often do you purchase new furniture?) and it is a nice feature to have, but not necessarily essential. Animojis and facial overlays, however, could integrate with users’ daily communication. In addition, if Face ID becomes a hot security feature, then we will see more phones adding at least front-facing depth sensors and, quite possibly, depth sensors to both sides as ARVR expands. If this comes to fruition, it could throw some shade on Google’s ARCore, which moved away from Tango’s depth sensors. This also sets the stage for Apple’s next AR step; positive reception of ARKit will bring AR content to Apple’s walled garden. The success of the wearable Apple Watch enables one to envision a glasses product from the company, leveraging the design chops and brand power Apple is known for, without the fear of content starvation that has permeated AR and VR thus far.

The last market mover was Apple’s announcement for iTunes 4K content. Simply put, Apple has thrown down the 4K gauntlet by pricing UHD content at parity with HD and, equally significant, it will upgrade users’ existing HD libraries to 4K for no additional cost! That is potentially seismic when you consider that services like Vudu charge upward of US$30 for UHD movies and virtually all services charge extra for higher-resolution content (even Netflix). Apple is pushing 4K forward like no other company or service to date, and, hopefully, others will follow suit.

Viewed in isolation, features like Animojis and even the depth sensor might look gimmicky or prosaic depending on one’s perspective, but when you view Apple as an ecosystem, it becomes more powerful. You can start to extrapolate some of these features into other Apple products and features like video editing. The ability to animate virtual characters could spawn a new wave of machinima or animated videos. In addition, the ability to depict emotions at a higher fidelity could also mean significant changes for virtual spaces, even making Facebook Spaces look less sophisticated in comparison (at least regarding the conveyance of emotion, which is a critical component of communication). The use of overlays on photos and videos will also change dramatically as a result of the better facial mapping from the depth sensor, possibly leading to a “haves and have nots” when it comes to the best virtual masks and avatars.

More than anything, Apple has again taken existing services and technologies and repackaged them into a potential killer app that, if successful, will benefit other industries as well, which in this modern age might just be the best form of innovation.