Though the rumor mill took some of the suspense out of Apple Inc.'s (AAPL) iPhone launch event, it still packed a few surprises and filled in some key details about what the company's latest devices do, how they're priced and when they ship. Here are some takeaways on what was announced.
The iPhone X (mostly) Lived Up to the Hype
The edge-to-edge OLED display on Apple's latest flagship phone was as good as rumored, with those getting their hands on the device raving about its image quality. With a million-to-one contrast ratio and support for Apple's True Tone display tech -- it adjusts a device's display in response to an environment's lighting -- the display should at least hold its own against the OLEDs found on high-end Android phones.
The iPhone X's polished build, with front-and-back glass panels held together by a stainless steel band, is also going over well. The same goes for its quick and accurate Face ID unlocking/authentication system, as well as its dual 12-megapixel rear cameras, which are accompanied by two optical image stabilization (OIS) modules and large-aperture lenses (good for sports and low-light shots).
One notable surprise: Apple promises a 2-hour battery life improvement relative to the iPhone 7.
The 6-core A11 Bionic processor powering the iPhone X, as well as the iPhone 8 and 8-Plus, keeps up Apple's legacy of top-notch chip engineering. With the help of new CPU cores, a proprietary GPU (a first for the company) and a performance controller, Apple promises a 25% performance gain for its high-performance CPU cores, a 70% performance gain for its low-power cores and a 30% GPU performance gain relative to the A10 Fusion processor inside last year's flagships. There's also a dedicated image processor and video encoder for photo and video recording, and (as rumored) a dual-core "Neural Engine" for handling machine learning algorithms.
One disappointment: While the front camera features a 3D sensing system -- Apple calls it TrueDepth -- that relies on an infrared camera and dot projector to help create a 3D model of a user's face that can be used by Face ID and augmented reality apps, no similar technology was built into the rear camera. That could explain why Lumentum Holdings Inc. (LITE) , believed to be supplying lasers used by TrueDepth, sold off during Apple's event.
Also, though this wasn't a surprise, Apple never said the iPhone X -- of for that matter, the iPhone 8 and 8-Plus -- will support Gigabit LTE, which is now supported by several high-end Android phones. This is reportedly a product of Apple once more using both Intel Corp. (INTC) and Qualcomm Inc. (QCOM) modems within its flagship phones, and throttling the top speed of the Qualcomm modems to keep them from surpassing that of the Intel modems.
But overall, initial hands-on reviews and consumer reactions both look quite positive. Apple has a hit on its hands -- just as long as it can make enough of them.
The iPhone Sticker Shock Was Bigger Than Expected
As reported, the iPhone X starts at $999. Not previously reported: Apple will be charging an extra $150, rather than the usual $100, to get more storage (256GB vs. 64GB). And the company shot down hopes that something of value, such as an Apple Music subscription, AirPods or a wireless charging pad, would be bundled with the X.
The iPhone 8 and 8-Plus, meanwhile, feature starting prices ($699 and $799) that are respectively $50 and $30 higher than those the iPhone 7 and 7-Plus carried a year ago. And they, too, feature 256GB models that carry a $150 premium relative to 64GB base models.
Apple is betting installment plans, strong customer loyalty and the value high-end smartphone users attachment to their devices will prevent its pricing from denting unit sales. Pre-order data for Samsung's Galaxy Note 8, which carries $900-plus prices, bodes well for the ability of Apple's de facto price hikes to pay off.
Apple Is Banking on Good iPhone 8/8-Plus Sales Until the iPhone X Arrives
Not only won't the iPhone X ship until Nov. 3, Apple won't even take pre-orders until Oct. 27. In addition to suggesting the X's production constraints are no joke, it means that Apple will need to lean on iPhone 8 and 8-Plus -- pre-orders start on Sept. 15, and shipments on Sept. 22 -- to meet its September quarter guidance for 4% to 11% annual revenue growth.
With better cameras, a faster processor, wireless charging support and somewhat improved LCD displays, the iPhone 8 and 8-Plus are respectable upgrades relative to the iPhone 7 and 7-Plus. And of course, they're cheaper than the X. But there's a good chance that hype and anticipation surrounding the X, with its head-turning OLED display, TrueDepth front camera and superior rear cameras, will keep a lid on demand.
Also of note: iPhone X pre-orders start right around the time Apple typically delivers its September quarter report. It could make sense for the company to delay its report by a week or so to have some iPhone X sales on the books before issuing its December quarter guidance.