By CUPERTINO, California, September 12 (Reuters) – Apple (AAPL.O) is set to unveil its highly anticipated iPhone 15 lineup, but this launch is marred by concerns surrounding its market access in China and growing competition in the premium smartphone segment.
The iPhone has been a cornerstone of Apple’s success, accounting for more than half of its impressive $394.3 billion in sales last year. However, as the company prepares to introduce its latest innovations, it faces new hurdles in its third-largest market: China.
Anticipated features of Apple’s new phones include novel charging ports, sleek titanium cases, and enhanced camera capabilities. Yet, these exciting updates come at a time when the Chinese government has tightened restrictions on the use of iPhones, casting a shadow over Apple’s product launch.
Moreover, Apple is confronted with formidable competition from Huawei Technologies (HWT.UL), which was once its primary rival in China’s premium smartphone market. Huawei’s phone business took a significant hit in 2019 due to U.S. export controls, but it recently made a comeback with the release of the Mate 60 Pro. This high-end phone incorporates Chinese-made chips, potentially in violation of U.S. trade restrictions, and introduces unique features like satellite calling, leveraging China’s government-backed network. While Apple’s current iPhone lineup also includes satellite capabilities for emergency use, Huawei aims to outpace Apple by integrating advanced satellite functionalities.
Despite these challenges, Apple’s focus on its new product lineup remains unwavering. One of the most notable changes for consumers will be the shift from Apple’s proprietary “Lightning” charging cables to USB-C, a standard already used in its laptops and some premium iPads. This transition, mandated by European regulations, is poised to be presented as an upgrade, capitalizing on faster data transfer speeds, ideal for handling high-quality videos created with iPhones.
Analysts are also anticipating the introduction of “periscope” camera technology, promising superior zoom capabilities, along with the introduction of titanium cases and enhanced chips. “Periscope” lenses employ mirrors or prisms to achieve longer focal lengths without significantly enlarging the camera module. The key question is whether Apple will reserve these features for a new top-tier device or incorporate them into its more affordable models.
Ben Bajarin, Chief Executive and Principal Analyst of Creative Strategies, suggests that the allure of the latest and greatest features may attract consumers across the board, much like the appeal of Apple’s premium products. This could create buzz and momentum for the top-end iPhone.
Apple aims to increase its average phone selling price to bolster revenue, but the strategy remains uncertain. Will Apple raise prices across its entire range or only for its premium models? The global smartphone market has experienced a decline, with shipments dropping from 294.5 million to 268 million in the second quarter. Remarkably, Apple’s shipments declined the least among major smartphone makers, from 46.5 million to 45.3 million, according to Counterpoint Research.
Bob O’Donnell, Head of TECHnalysis Research, acknowledges the challenging market conditions, emphasizing the overall downturn in the smartphone industry.
In addition to the iPhone 15 launch, industry observers are keen to uncover any hints about Apple’s involvement in generative artificial intelligence (AI), a technology trend that underpins applications like OpenAI’s ChatGPT and Microsoft’s “Copilot” assistant technologies for Office software. While analysts have repeatedly pressed Apple for insights into its AI plans, the company has remained tight-lipped. Nevertheless, Chief Executive Tim Cook did reveal in July that the company’s secretive work in this field has driven up research spending.
As Apple’s iPhone 15 takes the spotlight, it faces a landscape riddled with challenges and uncertainties. The company’s ability to navigate the complexities of the Chinese market, stave off competition, and continue its tradition of innovation will be closely scrutinized by investors and tech enthusiasts alike.
