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1 Potential Reason That the Apple Inc. iPhone 6s Is Such a Disaster

By Ashraf Eassa - Jan 26, 2016 at 9:25AM

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Apple's latest iPhones fail to measure up against last year's Android flagships in these two ways.

The Apple (AAPL 0.03%) iPhone 6 and 6 Plus were nothing short of epic products for the iDevice maker. Apple enjoyed a surge in sales due to both pent-up demand for large-screen iPhones as well as share gains against the various Android vendors.

However, anybody who hasn't been living under a proverbial rock knows that the iPhone 6s and 6s Plus are turning out to be, in relative terms, a colossal flop. According to generally reliable KGI Securities analyst Ming-Chi Kuo, Apple will see slight year-over-year growth in fiscal Q1 (77 million phones versus 74.5 million the year before), but see iPhone unit shipments plunge 29.7% year over year.

That, in my book, is an unmitigated -- and inexcusable -- disaster.

Although some want to blame it on a tough high-end smartphone market, I'm not convinced that this is the only factor at play. Here's one reason that I think iPhone 6s/6s Plus may not have been the hit that Apple was hoping for.

iPhone 6s/6s Plus get beaten by the older Samsung Galaxy S6/S6 Edge in display/camera
Apple has generally prided itself on having a best-in-class camera sub-system as well as best-in-class displays. When the iPhone 6/6 Plus came out, Apple clearly led in both of these areas.

Interestingly, Tom's Hardware published a review of the iPhone 6s/6s Plus and I was stunned to see the following:

  • In terms of camera performance, the iPhone 6s were easily outmatched by the Samsung Galaxy S6/S6 edge in, according to the reviewer, "every condition [Tom's Hardware] tested." The 6s Plus doesn't do much better.
  • The reviewer also said that there was "no perceivable difference in image quality between [the iPhone 6s] and the iPhone 6"

Frankly, I'm stunned to see that Apple apparently "phoned it in" like this with respect to the iSight camera.

Furthermore, if the iPhone 6s/6s fared poorly in the marketplace at this level of competitiveness on the camera side of things, I can only imagine how much worse it gets when Samsung rolls out the S7 or when the LG G5, rumored to feature the dual-lens technology that Apple is said to be experimenting with, over the next month or so.

In terms of display, same deal. Apple chose not to update the display in any meaningful fashion from the iPhone 6/6 Plus in the iPhone 6s/6s Plus, respectively, and the Tom's Hardware review shows the roughly one-year-old Galaxy S6/S6 Edge beating out the iPhone 6s/6s Plus where it counts:

  • Maximum display brightness
  • Contrast ratio (Samsung enjoys an OLED edge here)
  • Color accuracy
  • Color temperature
  • Color Gamut

Again, this will only get worse for Apple once the Galaxy S7 and other Android flagships hit the market in the March/April time frame.

Apple can't afford to do this again
I'm quite surprised that Apple allowed itself to fall behind something like the Galaxy S6/S6 Edge in areas that fundamentally matter to the user experience. Apple charges a significant premium for its products and buyers need to be assured that they are getting best-in-class quality in key areas like the camera and the display.

Of course, one could argue that it's the premium iOS experience that brings customers in and keeps them coming back for more, but I believe as the smartphone market matures, particularly the high end of the market, Apple will need to offer best-in-class specifications across the board.

With the iPhone 6s/6s, I believe Apple was "penny wise and dollar foolish." They might have saved a couple of bucks on the phone bill of materials by choosing the display/camera technology that they did, but I think that without a clear advantage over the Android vendors, Apple will find gaining additional high-end share increasingly difficult.

In my view, the incremental revenue that it could capture from ensuring best-in-class components/technologies in its phones would probably more than offset the slightly lower product margins.

Here's hoping, for the sake of its stockholders, that Apple picks it up with the iPhone 7/7 Plus and doesn't drop the ball with future iPhone generations.

Ashraf Eassa has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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