Apple's announcements include:
- Two new smartphones: the iPhone 6 and iPhone 6 Plus, notable features include:
- Larger screens, iPhone 6: near HD 720 for 4.7” with 1334x750 (326 PPi); iPhone 6 Plus: Full HD for 5.5” with 1920x1080 (401) PPi
- Faster A8 processor, 20% faster CPU, 50% faster graphics built with 20nm process
- New rear 8MP camera, with 2.2 aperture, and new sensor, and phase detection autofocus. The 6 Plus includes optical image stabilisation.
- New front facing camera, also 2.2 aperture, with burst selfie mode and HDR.
- iPhone 6 Plus has an iPad-like UI design when apps run in landscape mode
- Apple Watch
- Requires an iPhone 6 Plus, 6, 5S. 5C, or 6to use, price starts at $349, available early 2015.
- Retina resolution display with sapphire cover glass for robustness
- User interface includes "force touch" a "crown" jod-dial button and Siri voice control.
- Available in two sizes, with three finishes including a 18 karat gold option, and interchangeable straps.
- WatchKit for third party app developers. Includes apps for communication, maps, notification and health.
- Includes: multiple sensors for health tracking, including pulse rate
- Will support Apple Pay
- Magsafe wireless charging
- Apple Pay
- A new payment service using NFC chips in the new iPhones and Touch ID
- Intended to be private, with Apple not knowing
- 22,000 retailers will be compatible.
- Initially available in October, US-only
Our Analysis - iPhone 6 and iPhone 6 Plus expands Apple's reach
The iPhone acts as a critical bridgehead to acquire new customers, and as a foundation for new ventures such as Apple Watch and Apple Pay. The more new customers Apple can win the with iPhone 6, the greater the chance of success with the Apple Watch and Apple Pay.
Apple is raising the competitive threat to other smartphone makers with a new stronger portfolio including two new large screen iPhones. By launching multiple products together, Apple is opening multiple fronts to build on the success of the iPhone to date. Apple has shipped over 551 million iPhones to date, and despite competitive pressure, Apple has shipped 15% more iPhones in the first half of 2014 than the same period in 2013.
As a result of the iPhone 6 launch, IHS forecasts Apple will overtake Microsoft (the former Nokia devices unit) to ship the second largest number of mobile handsets in 2014 behind Samsung.
Larger screen iPhones remove a key differentiator which has insulated Samsung, Sony, HTC and LG's large screen flagship smartphones from iPhone competition. Shrewdly, Apple has prepared the ground to make sure its app ecosystem will be available quickly on the new iPhones by providing developers with the tool so to easily support different screen sizes in iOS8 which was unveiled to developers three months ago at WWDC.
Apple is expanding its iPhone portfolio this year too. By keeping both the iPhone 5C and iPhone 5S on sale, Apple is increasing the number of consumer segments it is able to address. Operators will need to devote more of their valuable ranging slots to Apple, crowding out other smartphone markers who will find it harder to gain distribution and visibility for their models.
Our Analysis - Apple aims to reset the wearable market and make 2014 year zero
Apple aims to reset the wearable market and make 2014 year zero for wearables, as 2007 became the start of the true smartphone market because of the iPhone. But moving into a new category is a bold, expensive and risky effort. This Apple Watch is a first generation device, whether it is successful or not, Apple will aim to iterate and make it a must have companion for every iPhone owner.
Apple Watch stands on the shoulders of Apple's iPhones. Significantly, the addressable market for Apple Watch will be tied to the installed base of iPhones. While Apple has shipped 551m. iPhones cumulatively to the end of June 2014, the iPhone's global installed base will be slightly under 400 million at the end of this year. But of those, only a little more than half, or over 200 million will have an iPhone 5 or newer
Apple rarely invents new markets, despite its reputation. But when Apple launches a new product category it attempts to re-define the market. Examples of Apple's ability to enter an existing market and transform it include: the iPhone, iPad, and iPod.
In each case, Apple changed the competitive dynamics and forced existing players to move fast to remain competitive. Current wearable makers must raise their game to respond to Apple or risk a similar market trajectory because today's Apple is considerably stronger than the company was at the launch of the iPod or iPhone.
Unlike Apple's original iPod strategy which sought compatibility with the mp3 standard and with Windows PCs as well as Apple's Macintosh computers, Apple now has a large enough installed base to target only its customers.
Our analysis – Apple Pay
IHS expects Apple will extend Apple Pay internationally as soon as it is able to do so. Apple's product strategy is global-focused and as a result keeps variation in products, models and services to a minimum to maximize global scale economies. Apple has already started conversations with key financial players.
Even when it launches in one country first, Apple ensures its product design is suited to selling worldwide as soon as Apple has overcome launch hurdles.
But the iPhone has been so successful in the US, the installed base is large enough to create a viable target market for a new product. IHS estimates the iPhone installed base is over 100m units in the US.
There are several precedents for US-only Apple product launches, covering four major reasons:
1. Content rights. Both the iTunes music store and its movie sales launched initially in the US. The iTunes music store is now available in 119 countries while Apple's movie store reaches 109 countries.
2. Scaling new hardware production. The original iPads launched first in the US, before a wider roll out, as Apple sought to ensure that in the countries the iPad was available it was able to meet demand.
3. Securing partnerships and distribution. Apple used the six months from the first iPhone announcement to it going on sale with AT&T in the US to connect with more mobile operators and secure distribution. Having originally launched in one country, Apple made 2013's iPhone models available in over 60 countries within 6 weeks of launch. The Apple App Store which distributes iOS apps for iPhone and iPad is available in 155 countries.
4. Regulatory barriers. For example, for a medical or financial services product where there is tight country-specific legislation.
Mobile payments and wallet services have been launched by device manufacturers numerous times in the past, and so far none have succeeded in gaining mass user adoption. Unlike many other services, Apple holds a number of advantages: