Market Watch

Apple Unveils iPhone 4



As widely anticipated, Apple unveiled its latest iPhone during its annual developer conference. The iPhone 4 offers a range of new or improved hardware features including a complete redesign, improved performance, battery life as well as a gyroscope for improved position and orientation data. iPhone 4 also features an improved 5 megapixel back camera and a front facing camera that can be used for the new FaceTime video chat service, which currently only runs on WiFi internet connections. Earlier generation iPhone 3GS replaces the iPhone 3G as the entry-level device and sees its inboard memory reduced to 8Gb.

Software-side, Apple added its iBooks book reading software (introduced with the iPad) and announced a mobile version of its iMovie video editing software that will retail for $4.99. In an effort to reflect its operating system's wide reach across its portable devices (iPod touch, iPhone, iPad) iPhone OS will now be called iOS.

Apple claimed over $60m of advertising spend was already commited to its iAds advertising services by leading brands such as Unilever, AT&T, Chanel, GE, Target, Best Buy, Direct TV, or Disney. Apple believes it will be able to channel around 25% of the 2010 US mobile ad spend.

  • Apple also reported a range of statistics during its WWDC keynote including:
  • App Store app downloads have passed 5bn.
  • It will soon sell its 100 millionth iOS device.
  • Apple has paid developers more than $1bn revenues from paid applications.

It has sold 2m iPads, which now have access to 8,500 native applications and have generated 35m app and 2m book downloads (via iBooks).

Analysis
Due to a preponderance of internet leaks in the run up to WWDC, Apple's launch of the iPhone 4 held few surprises. Widely anticipated new features including a front facing camera, improved rear camera, a redesigned form factor, A4 processor boasting improved battery performance, improved screen resolution and HD video recording all came to fruition.

Despite the lack of surprises, Apple's update is enough to help it maintain its success in the smartphone market. The new hardware and software features are more than enough to match its leading competitors including the latest Android devices.

Confident in the appeal of its hardware lineup, and helped by an unmatched mindshare, Apple chose against lowering its entry price points, which could ultimately hurt volume shipment growth but guarantee healthy margins. Therefore, Screen Digest expects Apple to increase its absolute shipment numbers and remain the global smartphone revenue leader, but at the cost of a smaller unit market share, in the face of mounting competition from lower-priced smartphones from the likes of Nokia, Samsung and HTC.