New iPhone Hardware
In the fiscal second quarter, Apple's iPhone gained market share in U.S., the UK, Japan, Canada, Germany, France, Vietnam and Greater China, and other countries, and managed to set a new all-time record for total iPhone sales in the BRIC countries. The third quarter reinforced the enthusiasm for the iPhone, with Cook highlighting strong sales of the iPhone, as well as the Mac in the company's earnings press release.
It's expected that the next iPhone will come in two sizes, both a 4.7-inch version and a 5.5-inch version, which may allow the company to charge more for a larger phone, given demand for Apple products. On the fiscal quarter earnings call, Cook was asked about this factor, and said that Apple would charge a price for its products what it sees as appropriate, but did not commit to a particular price. "We price things that ... are priced in such a way that we think it's a fair price for the value that we're delivering and we make those on each thing as it gets closer time to come to market," Cook stated.
Cantor Fitzgerald analyst Brian White believes that both versions will be unveiled next week, but the larger 5.5-inch iPhone is more important to the company's position in China. "In our view, it doesn't matter if the two new iPhones are available in September or October; however, we believe it is important for Apple to launch a 5.5-inch iPhone Air this year to better penetrate China," White wrote in a note. He rates Apple a "buy" with a $123 price target.
With the Health app, which many believe is part of Apple's push into wearable technology, given the oft-rumored wearable device (which may also be unveiled at the Sept. 9 event), the health and fitness market app market is exploding. By unveiling this, it's clear Apple wants to be part of a growing trend. According to a report from research firm Research2Guidance, there are now more than 100,000 dedicated health and fitness apps on Apple's iOS and Google's Android platform, with the projected revenue to be $26 billion by the end of 2017. This is up from $2.4 billion this year, so it's clear the segment is exploding. Though much of the revenue is concentrated at the top with the top 5% of app publishers seeing more than 500,000 downloads, making more than $1 million a year in sales. Additionally, the company launched what it calls smart home technology, known as Homekit, that will allow its users to integrate computing hardware with smart appliances. Currently, there are a few partners for HomeKit, including Honeywell (HON) , Texas Instruments (TXN) , iHome, Phillips (PHG) and others. "HomeKit is a new framework for communicating with and controlling connected devices in a user's home. Apps can enable users to discover devices in their home and configure them, or you can create actions to control those devices. Users can group actions together and trigger them using Siri," according to Apple's Web site. HomeKit will allow locks, lights, doors, thermostats, garage doors and other home-centric items to integrate into an iPhone or an iPad, using Siri to operate them.
Some of the smaller issues that have been changed with iOS 8 include predictive typing, using Apple's QuickType keyboard, and for the first time ever, allow Swype keyboard technology into iOS. Apple's iOS 8 also comes complete with an iCloud Photo Library. This is a simpler, faster and more intuitive user experience that will give users a lot of new functionality.
Apple also gave Messages a boost, implementing new features that will allow users to share voice, video or photos with a single swipe. For some who have been on long, annoying group messages, Apple has now created the ability to remove oneself from those group messages. Apple also introduced a feature that allows some of these messages to self-destruct after a predetermined period of time, a nod to messaging apps such as Snapchat. --Written by Chris Ciaccia in New York >Contact by Email. Follow @Chris_Ciaccia
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