Wednesday, May 22, 2024

The iPhone’s Future: Smartphone Showdown

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Clearly the iPhone is a phenomenal success, so it begs the question of what Apple will do to keep the iconic device in the top spot as king of the smartphones. The answer: lower the price, add more functionality, expand access overseas and pack any future models with software that has a wow-factor.

This roadmap for where the iPhone is headed comes from applied technology analyst Yair Reiner of Oppenheimer & Co., who told that’s what top Apple (NASDAQ: AAPL) executives, including CFO Peter Oppenheimer, relayed to him during a recent meeting.

“There’s a lot of room to grow market share, and Apple says the way to do that is by adding value in a number of ways. One is by lowering prices. Then, by adding more functionality. They’ve always used a combination of these two levers in their portfolio. And there’s more runway in terms of geographical extension, and by that, I think they’re passively acknowledging that China, with its population, might be a good target,” said Reiner.

In terms of segmenting the market by coming out with different models, he said Apple was tight-lipped on any details, but did offer some insight on the future of the product line.

“In regard to segmentation of the market with additional models, I raised that as a possibility, and Apple said they don’t discuss future product plans, but one thing they did say is that any iPhone they put out there would be a software-centric device.

“So there’s no announcements about additional iPhone models, but I think a tacit acknowledgement that segmentation is something they’ve used successfully in the past for all of their product categories. So, theoretically, that could be on the menu of options for increasing the value of the iPhone,” said Reiner.

He said he interprets what Apple execs said as meaning that any future iterations of the iPhone would have comprehensive feature sets. “I think if we can read into Apple’s statement, what we can say is any segmentation of the iPhone is not going to involve any kind of simple voice device. Whatever they issue, it would have a full-blown operating system.”

A smartphone showdown

News on the future of the iPhone comes at a time when the summer smartphone showdown is heating up on all fronts and rival Research In Motion (NASDAQ: RIMM) shows signs of gaining market share by aggressively entering the consumer market.

Handset makers are all gearing up for key product releases, with the (NASDAQ: PALM) Palm Pre set to come out by July. Some recent reports indicated it may go on sale before the Apple developer conference June 6, which is when Apple is rumored to planning the rollout of new iPhones.

RIM has hinted it will introduce new Storm models soon, with photos of a Storm 2, its answer to the iPhone, already popping up on the blogosphere.

In Android developments, Samsung is gearing up to introduce two smartphones based on Google’s mobile operating system this summer in the US, while HTC, maker of the T-Mobile G1, is reportedly working on two new phones. Motorola announced it plans to unveil Android handsets in time for the holiday buying season.

Operating systems compete

To keep pace with the competition and the slew of new products, the race is on to update the respective mobile operating systems as well. Android’s 1.5, or Cupcake, update is out now, while RIM just finished tweaking the BlackBerry operating system to support touchscreens and speedier browsing.

Finally, Apple is poised to release iPhone OS version 3.0, with a slew of enhancements as Palm is readying its new mobile platform, webOS, to coincide with debut of its upcoming Pre smartphone.

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