It's official... Apple's (AAPL 0.01%) next major product launch is just days away. After weeks and months of speculating, the tech giant confirmed that it has something big to show to the world next Tuesday when it sent out invitations to the media community on Thursday.
Source: AppleInsider.
Apple's famous for playing the subject of its product launches close to the vest. However, the steady stream of leaked production photos, and rumors from Apple's supply chain, strongly suggest the iPhone will take center stage at next week's event.
We've discussed many of the key rumors as this storyline has evolved, but let's take one last look at the latest buzz surrounding Apple.
All about the iPhone
The general expectation is that Apple will use this iPhone launch to overhaul its smartphone strategy to feature two tiers of iPhones. The higher-end iPhone is expected to be called the iPhone 5S, while the oddsmakers currently favor the iPhone 5C as the likely moniker for the lower-end model. The idea is that by creating a lower-end phone, Apple will be able to compete more effectively for emerging-market consumers who are more price sensitive, while still being able to maintain strong gross margins on each device sold.
In the case of the high-end 5S, most believe it will maintain the same form factor as the current iPhone 5, as has been the case for past iPhone updates following a form-factor change (think the3G and 3GS, and the 4 and 4S). However, that isn't to say that Apple won't change anything with the exterior. Repeated leaks of pictures showing some kind of gold or champagne case suggest Apple plans to add another color to its current black and white versions.
Source: AppleInsider.
As was the case with the 4S, expect this year's model to get a hefty hardware upgrade, as well. While we won't know the exact specs until the unveil, expect Apple to introduce an improved A7 chip that will be both meaningfully faster, and more power-efficient than the current A6 that powers the iPhone 5. There's also been talk of the 5S having an independent chip dedicated to motion tracking, which opens the door to some potentially interesting new range of gesture controls.
Aside from the usual spec upgrades, the 5S could feature one significant differentiator -- a fingerprint sensor. Integrating fingerprint-recognition technology into the home button would eliminate the need for the password screens common on most smartphones. Banking off its purchase of sensor technology firm AuthenTec last year, using the difficult-to-copy technology could create a clear technological lead versus other smartphones.
Alas, we'll have to wait and see.
Attacking the low-end
Many believe the lower cost model will be called the iPhone 5C -- and it's believed that the C stands for color. The Internet has been flooded with supposed leaks of 5C shells, but the fact that Apple's invite strongly hints at color being a major theme of this launch makes this idea all but a sure thing.
Source: AppleInsider.
While the fun, multi-color plastic casing will ideally create a strong enough distinction between the two classes of iPhones to minimize cannibalization of the high and lowend, it'll be what's inside the 5C that will ultimately determine how successful it is to investors. Thankfully, switching to these colored polycarbonate inputs should help to significantly lower production costs for the 5C. This new device will require Apple to carefully navigate reaching a low enough price to where it can compete in emerging markets that are increasingly the engine of unit growth, while maintaining a strong enough gross margin to keep investors happy. Again, we'll need to wait and see.
China rising
If there were to be a second theme to this product launch besides the iPhone, it would be China, and for good reason. The Middle Kingdom is Apple's second most important market by some metrics, and this will only increase as time passes. However Apple has seen its success in China wane as competitors such as Samsung and Lenovo flood the market with lower-cost smartphones and tablets. To this end, Apple plans to also conduct another special event in Beijing on Sept 11. Many expect the event to simply be a rebroadcast of the U.S. launch event, but the fact that Apple went so far as to create its own set of invitations to the special event speaks to how important it believes China is to its future success.
However, the fact that Apple will hold this additional event has the analyst community buzzing. One of the most optimistic interpretations of this extra event is that Apple has finally struck a deal with China Mobile (CHL +0.00%). This would allow Apple much-needed access to the world's largest wireless carrier and its nearly 750 million subscribers. It's been estimated that a deal with China Mobile could alone drive an additional 11 million iPhone sales.
And while we do know CEO Tim Cook has also repeatedly met with China Mobile chairman Xi Guohua several times over the last year, don't hold your breath. Apple and China Mobile have been at odds over wireless standards and revenue sharing for some time, so this could be reading too much into the special Beijing event. This would be an immediate win for Apple investors if it were to materialize.
One more thing?
Anytime Apple holds a special event, it's always good sport to try to guess if we'll get one of the "and one more thing" moment that Apple made famous (and Samsung recently stole).
If there is, indeed, some kind of additional surprise, an official release date for its overhauled iOS 7 mobile OS is by far the most sensible. Other more far-fetched hopes include either the long-rumored iWatch, or even an iTV smart TV device, although I'd put the odds on either at slim-to-none, with a serious emphasis on none.
Foolish bottom line
Expect the fanfare surrounding Apple's next launch to reach the fever pitch they typically do. As arguably the most important device in all of mobile technology, this is an absolute must watch for anyone involved in the tech space. And while we have a good idea about what we'll get come Tuesday, only time will tell.
Here's to waiting.
