After much brouhaha surrounding a potential delay of
's iPhone 6 into October, re/code came out with a report
suggesting that Apple will be holding an iPhone special event on
Sept. 9. Given that re/code has typically been a reliable source
for such announcements, consumers and investors alike should
prepare themselves for the unveiling of what is perhaps the most
important iPhone since the original back in 2007.
Apple launched a revolution with iPhone
When Apple launched the original iPhone, there wasn't anything
quite like it. iOS transformed the way that consumers interacted
with cell phones, and the App Store unleashed an unprecedented
wave of developer creativity. Apple turned the smartphone into a
legitimate handheld computer, rather than a phone with a few
awkward additional functions tacked on.
It was groundbreaking.
Samsung goes huge, while Apple sticks to small displays
However, as is traditionally the case in the world of high tech,
Apple had a monopoly neither on the general iPhone concept nor on
, which today is nearly as profitable as Apple, has relentlessly
rolled out one smartphone model after another in a bid to find
the "next big thing."
Samsung, with its Galaxy S line of phones, has seen immense
success. One of the key points of differentiation for Samsung's
Galaxy S line of phones is that Samsung has pursued larger
display sizes than Apple has. To illustrate, let's compare Galaxy
S display sizes with those found on their iPhone
3.5 inches (iPhone 4)
4.0 inches (Galaxy S)
3.5 inches (iPhone 4s)
4.3 inches (Galaxy S2)
4.0 inches (iPhone 5)
4.8 inches (Galaxy S3)
4.0 inches (iPhone 5s)
5.0 inches (Galaxy S4)
4.7 inches (iPhone 6)
5.1 inches (Galaxy S5)
While Apple's iPhone has done remarkably well even without a
large screen offering, even Apple has acknowledged that the lack
of a larger-screen iPhone in its product lineup is an issue --
most notably in an internal presentation slide that became
The now infamous "customers want what we don't have" slide.
Source: Apple via iphonehacks.com.
With iPhone 6, Apple could remedy its biggest problem -- the
lack of a larger screen.
Bigger, in this case, is probably better
Given that Apple has been able to capture a significant portion
of the high-end smartphone market even without a larger screen,
it's natural to assume that there is some non-trivial part of the
market that would switch from Android and/or Samsung if Apple
were to introduce a larger-screen iPhone.
Admittedly, it is very difficult to tell just how much market
share Apple will gain with a larger-screen phone, and therein
lies the big uncertainty ahead of the iPhone 6 rollout. However,
there have been a number of very encouraging data points in
surveys done by a number of firms.
More market share; higher selling prices
A good set of data points came from a survey done by RBC Capital
Markets. Of 4,000 consumers surveyed, about 50% of them intended
to purchase iPhones as their next upgrade, implying that half
expected to go with other vendors.
That's already impressive, but according to that same survey,
of the users who did
intend to purchase an iPhone as their next smartphone, 35% of
them indicated they would do so if Apple made the screen
It gets even better, though: In that same survey, 26% of those
customers indicated that they would be willing to pay a $100
premium for a 5.5-inch iPhone. Given that the incremental
manufacturing costs of a 5.5-inch iPhone are unlikely to come
even close to $100, this is additional potential margin gravy for
Now, note that this was just one survey, but the sentiment
here is clear: Apple would be selling more iPhones, potentially
even at higher price points, if it would just equip them with
Foolish bottom line
Since screen size is a relatively easy problem to solve -- Apple
has already solved the "tough" problems like putting together
world-class product teams and an arguably unparalleled brand --
it stands to reason that this should be a pretty easy "slam dunk"
However, the big question for Apple investors is just what the
magnitude of the iPhone 6-fueled growth will look like and how
much of it is baked into the current share price.
In other words: Sept. 9 can't come quickly enough.
Leaked: Apple's next smart device (warning, it may
Apple recently recruited a secret-development "dream team" to
guarantee its newest smart device was kept hidden from the
public for as long as possible. But the secret is out, and some
early viewers are claiming its everyday impact could trump the
the iPad. In fact, ABI Research predicts 485 million
of this type of device will be sold per year. But one small
company makes Apple's gadget possible. And its stock
price has nearly unlimited room to run for early-in-the-know
investors. To be one of them, and see Apple's newest smart
Apple, Inc. Set to Unveil iPhone 6 on Sept. 9
originally appeared on Fool.com.
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