In a report entitled: “Why the Apple iPhone 5’s Lack of Killer Features is Pure Genius”, a piece on Money Morning speculates that the reason that Apple didn’t add NFC, wireless battery charging, or biometric security using fingerprint scans is that those will be the new features coming next spring.
“What if Apple has decided to modify its upgrade cycle to two iPhones a year instead of just one?” is the suggestion, and the article is quite persuasive.
The report notes the “harsh lesson” of Apple’s June quarter, where sales of the iPhone 4S slid dramatically because consumers were awaiting a new model. Not only was the iPhone 4S competing against rumours of the iPhone 5, there was also an influx of new smartphones coming to market.
The report suggests: “As they continue to improve, it’s getting harder for Apple to hold out for an entire year between updates.”
It’s not just the increased competition that should be keeping Apple on its toes. The iPhone accounts for around half of Apple’s revenue and about two-thirds of its profits, so the company will want to avoid “dramatic swings in iPhone sales” as they will have a significant impact on the company’s earnings.
Ovum analyst Adam Leach told Cnet: “Whilst the company is still reaping the rewards of the brand equity of the iPhone, consumers are notoriously fickle when it comes to buying handsets. Without the continued innovation, which we are accustomed to with Apple, the company risks losing consumer appeal.”
With the increased competition even loyal Apple customers could be less likely to wait for months to upgrade their iPhone when they could opt instead for an Android device or a Windows phone.
Apple needs to have a fresh iPhone, not an iPhone that is nearly a year old, if it is to compete with the evolving smartphone market, is the conclusion of the report.
“Even features like Siri, let alone a bigger screen and LTE, aren’t enough to carry the product for 12 months,” it claims, predicting that next autumn we can expect to see mini-fuel-cell battery technology and NFC added to Passbook.
However, another report has the contrary opinion that a yearly release cycle is a good thing for Apple. DigiTimes notes that Apple’s strategy of launching a new smartphone model every year allows the company to be able to focus on the smartphone’s overall design and manufacturing details, and suggests that the lack of choice when it comes to iPhone model, and the long gaps between launches, are “relatively limiting factors” for Apple when it comes to the iPhone’s market penetration.