Everybody wants to know about the next Apple (AAPL +3.26%) iPhone. While smartphones have quickly been trending toward commodity status, Apple has historically been very good at commanding the lion's share of the profits in these types of markets, even if its market share doesn't necessarily tell an equally encouraging story. However, with the imminent launch of the next generation iPhones, it looks as though Apple could gain share and grow profitability.
KGI Securities says two iPhones coming this year
According to Ming Chi Kuo from KGI Securities (this individual has a great track record in predicting future Apple product details and launch timeframes), there are two next generation high-end iPhones hitting the market this year -- a 4.7" mainstream device and a 5.5" higher-end iPhone "phablet." Now, these screen sizes have been rumored for quite some time, but thanks to Kuo, we now have some pretty interesting -- albeit not entirely unexpected -- details to work with.
The iPhone 6 4.7" -- an interesting balancing act
According to Kuo, the iPhone 6 4.7" -- the mainstream high-volume successor to the iPhone 5s -- should sport the following:
- 4.7", 1334x750 display
- 1GB of RAM
- A8 processor
- Touch ID
- NFC
- Narrower bezel than iPhone 5s
- 6.5-7.0 millimeters thick
These details aren't entirely unexpected given that it's a fairly natural progression/enhancement of the prior generation iPhone. An interesting detail, though, is that Kuo believes that this phone will sport only 1GB of RAM, rather than an upgrade to 2GB. Of course, iOS is extremely efficient, which has allowed current generation iPhones to provide a smooth experience with just 1GB of RAM.
The wildly successful iPhone 5s. Source: Apple.
That said, Anandtech noted that the iPhone 5s and iPad Air ran into a few nagging, but not deal-breaking, issues due to insufficient system memory, so a move to 2GB still seems possible barring a dramatic enhancement to iOS 8's memory management system. Another 1GB of RAM would add cost, though, so if Apple is able to R&D its way out of a significant bump to the cost of goods sold, then itwill likely do so.
The iPhone 6 5.5" – the big guns
Samsung's (NASDAQOTH: SSNLF) Galaxy Note 3 is a big, immensely popular phone that sports a beastly 5.7" display. Indeed, much to Samsung's credit, the large-screened Galaxy Note series has really been a commercial success, as customers seek to do even more "PC-like" functionality on their phones. Apple, likely realizing the market share gain opportunity in releasing a larger iPhone, is apparently set to launch a 5.5" iPhone in Q4, with mostly the same specifications, the main difference being a 1920x1080 5.5" screen, according to Kuo.
Samsung's Galaxy Note 3 is a great example of a "phablet." Source: Samsung.
This device is likely to be priced at $299 on-contract for the base 16GB model, with $100 increases thereafter for each storage tier up to 64GB. According to Kuo, this will be a fairly limited volume model in 2014, and further suggests that only the 64GB model will sport a sapphire-cover on the display. It'll be interesting to see what the price of such a device would be both on-contract and unlocked.
Foolish bottom line
It's going to be a little rough sailing for Apple until the new products hit the market in full force, but when they do, Apple could supercharge revenue growth and return to net income growth. Of course, nothing is guaranteed, but if there's any company that knows what its customers want and is able to craft products to drive insatiable demand at a good cost structure, it's Apple.
