Apple iPhone 14: Industry Reaction

Apple’s ‘Far Out’ product launch on Wednesday evening of the iPhone 14, Apple Watch Series 8, Watch Ultra, and next generation AirPod Pro, has attracted reaction from industry experts.

The event and product launches was covered by Silicon UK in a live blog, and included in the launches were some genuine surprises.

Surprises included:

• the arrival of the Watch Ultra;
• crash detection;
• the switch from physical SIM trays to eSIM only in the US;
• dual GPS for more accurate positioning in dense urban environments;
• the aggressive pricing of all the devices;
• emergency notifications via satellite;
• the Always on display;
• the replacement of the notch with a smaller ‘pill’ cutout called the ‘Dynamic Island’, which presents information widgets like an incoming call (without exiting an open app).
• the forthcoming free inclusion of Apple Fitness+ for all iPhone users.

Wearable wonder?

“The Apple Watch family saw its most significant shake-up since the product launched in 2015,” noted Leo Gebbie, Principal Analyst, Connected Devices at CCS Insight. “Usually, the main Watch sees an incremental update, but Apple tore up the recipe this year and overhauled its entire wearables line, headed by the striking new Watch Ultra.”

“The new flagship may take all the headlines, but the Series 8 and Watch SE have a critical role to play if Apple is to continue its role as the dominant player in the smartwatch market,” Gebbie added.

“The aggressively priced $250 Apple Watch SE offers plenty of bang for the buck and will trouble rival wearable makers with devices at this price point,” Gebbie noted. “Its rich feature set and improved performance will appeal to first-time buyers and may tempt some existing smartwatch owners over to the Apple family.”

“The Apple Watch Ultra is a radical new offering from Apple, which until now had never deviated from the original design of the Watch,” said Gebbie. “It provides a new aspirational flagship tier for Apple Watch that will compete with sports watch brands like Garmin, as well as some luxury Swiss watchmakers which have marketed their watches around extreme sports.”

“Apple claims that the Watch Ultra’s dual-frequency GPS integrated with Apple Maps will deliver the most accurate GPS in dense urban environments,” Gebbie concluded. “This will be hotly contested by rivals like Garmin for whom a key differentiator is highly accurate sports tracking capabilities.”

Right pricing, right timing?

Meanwhile Paolo Pescatore, tech, media and telco analyst at PP Foresight noted how Apple with its pricing has adapted to the new economic reality facing many users around the world.

“Pricing and timing are critical to the success of these new Apple products,” said Pescatore. “With household bills all heading in the wrong direction, it still represents a real test of consumer appetite in forking out for these latest shiny devices. As well as the true power of Apple’s brand in a tough economic climate with everyone tightening their belts.”

“While these subtle improvements may get unnoticed, they remain paramount to improving the entire experience for iPhone users,” said Pescatore. “The line-up underlines the importance of these together to Apple in upselling and cross selling.”

“Makes sense to focus on what works best rather than move into nascent segments like foldables or smart glasses. These new categories are exciting, but are not highly sought after among users (yet),” he said.

“The new Watch Ultra represents an interesting move for Apple,” Pescatore added. “Allows Apple to further broaden its portfolio and cater for new users with different features. Others have paved the way and now Apple wants a slice of the action at a punchy price point.”

“Satellite remains the next and last frontier in connectivity,” Pescatore said. “There’s a frenzy of activity around satellite connectivity. This in stark contrast to a few years ago as users switched from satellite TV to streaming services.”

“Ultimately this is good news for consumers to ensure they are able to receive connectivity in hard to reach areas,” said Pescatore. “This promises to be more viable than some of the other services out there. It is encouraging to see a vast of providers starting to get serious about using satellite for the last mile. Ultimately reliable and robust connectivity is still highly sought after among all users.”

And Pescatore noted that while Apple’s move to eSIM may seem like a huge blow to telcos, Apple’s most trusted channel -it makes perfect sense for all parties.

“Take-up has been limited for now, but this will is now set to change as Apple will kickstart consumer adoption,” said Pescatore. “Telcos must now prepare for this and upgrade their systems to deal with this significant development. In time expect the SIM tray to disappear altogether.”

Carrier implications?

The fact that Apple has so clearly signaled its intentions with satellite connectivity capabilities and eSIMs was also noted by other experts, including Anthony Goonetilleke, group president of technology and head of strategy at Amdocs.

Goonetilleke believes that both the telecoms community, as well as consumers are ready for this new capability and that an eSIM-only iPhone will allow communications service providers to give their users next-generation experiences enhanced with flexibility, convenience, speed and sustainability.

Indeed, research released this week from Amdocs found that 81 percent of consumers are in favour of the idea of an eSIM-only future for smartphones, and 58 percent want their mobile network operator to integrate eSIM into their offering.

The Amdocs research also found that 32 percent consumers are most excited by the ability to switch providers and plans instantly, and 21 percent are most excited for the reduction in hassle that comes with buying a physical SIM card.

“Apple’s decision to introduce an eSIM-only version of the iPhone 14 represents a watershed, game-changing moment for seamless connectivity,” said Goonetilleke.

“We’re already seeing momentum towards eSIM across the telecoms sector and we expect this to grow as consumers, original equipment manufacturers (OEMs) and communications service providers increasingly realise the full scale of the next-generation experiences and possibilities unleashed by this exciting new technology.”

Satellite connectivity

Meanwhile Ben Wood, chief analyst at CCS Insight also noted Apple’s emergency SOS connectivity development and the move away from a physical SIM card.

“The announcement of an ‘Emergency SOS via satellite’ service should dominate the headlines, but the impact was diluted by a series of leaks ahead of launch, which prompted companies including Google, Huawei, SpaceX and T-Mobile to announce future support for satellite services before Apple’s event,” said Wood.

“The investment to add satellite capability should not be underestimated,” said Wood. “It will likely have taken Apple years to put all the pieces of the puzzle in place including a commercial agreement with satellite provider Globalstar and the creation of the infrastructure needed to pass messages to the emergency services.”

“Apple’s transition to an eSIM-only variant of iPhone 14 in the US will provoke intense debate,” Wood added. “Network operators globally will be watching closely to see whether the move sees a shift in Apple’s balance of power over US carriers.”

“CCS Insight predicts that if the eSIM-only iPhone is successful in the US, Apple will take this approach to advanced markets in Europe and beyond with iPhone 15 in 2023,” Wood said.

“It is impressive that Apple has maintained year-on-year pricing parity on the new iPhone 14 devices in the US,” Wood added. “We had anticipated that inflation, increased production and component costs, and other expenses such as more expensive shipping would have led Apple to increase its retail pricing.2

“Although iPhone pricing in the US has remained flat, we caution that in markets such as the UK, Apple will be obliged to increase pricing in local currency given the strength of the US dollar,” said Wood. “If it matched pricing from last year it would quickly find huge volumes being transhipped for profit.”

“Rather than the strapline of ‘Far Out’ for this event, Apple could have said ‘We’ve Got Your Back,’” said Wood. “Introducing features such as crash detection, emergency satellite messaging, enhanced health capabilities and more, it builds on its already established reputation for security and privacy.”

UK iOS usage

Analyst house Forrester meanwhile provided some additional data to Silicon UK about Apple iOS usage in the United Kingdom.

Forrester noted that 44 percent of the UK online adults who use a smartphone use the Apple iOS operating system in their primary smartphone, whereas 54 percent use Android.

Forrester also revealed that 27 percent of the UK online adults have purchased a smartphone with an iOS operating system in the past 12 months.

“Apple has announced a strong portfolio of smartwatches that has the potential to reach new users across more segments, including an Apple Watch Ultra to address the premium segment of sport fans,” noted Forrester VP, principal analyst Thomas Husson.

“With aggressive pricing, Apple is much better placed to compete directly with Garmin,” said Husson. “The new sensors and features look great and will enable new experiences and a progressive move from fitness to healthcare.”

“The keynote and new range of iPhone 14 flagship devices look a bit like déjà-vu and, being 15 years old, the iPhone is getting closer to becoming a mature device benefiting mostly from what may be perceived as just incremental innovation (satellite connection, car crash detection),” added Husson.

“However, the devil is in the detail: Apple is incredibly good at making the total sum of these customer experience details a differentiated branded experience,” said Husson. “And more importantly, in the context of rising inflation, a strong dollar, supply chain issues and geopolitical tensions, Apple masters better than anyone the art and science of pricing.”

“This new range of powerful iPhone 14 smartphones and smart pricing of older ranges with its retail partners should enable Apple to maintain its leadership in the premium segment,” Husson concluded.