In 2016, Apple will overhaul the iPhone series with the iPhone 7. This may not sound anything out of the ordinary, as the consumer electronics giant usually reboots its iconic smartphone when it is assigned a new number. But there are numerous factors which would collectively point to the fact that it is essential for Apple to significantly redesign the iPhone 7 when it is released next year.
Sales issues
Firstly, the sales of the existing iPhone 6s have been, if not disappointing, somewhat lukewarm. In particular, the smartphone has not sold especially well in the Western marketplace, with Apple having to rely on emerging markets, particularly in East Asia, in order to achieve sales growth and even overall stability.
This mediocre performance from the iPhone 6s has been reflected in the share price of Apple, which has declined in the latter half of 2015 from its peak during the summer months.
With Apple having smashed through the $700 billion market capitalization figure in 2015, it was hoped that the corporation could push on to become the first company to break through the $1 trillion barrier. But the reality is that the market value of the company has declined along with the share price – as is of course to be expected! – meaning that Apple’s market value is just over $600 billion at present.
So the first problem for Apple to address is that the company finds itself in a rare time of challenge. The last few years have been a relentless march of success for the consumer electronics manufacturer, with Apple achieving numerous records and firsts along the way. But the California-based company must now face up to the fact that it needs to regenerate its business in the coming years, and create new revenue streams to complement its hugely successful existing product lines.
Moving the iPhone range forward with iPhone 7
With this in mind, the iPhone 7 needs to feel like an entirely new smartphone. Apple can pretty much flog any iPhone device in large numbers, but if it is to attract consumers to the next generation smartphone then it must demonstrate that it is a significant departure from this year’s release. And it would be reasonable to suggest that this is something that the company has failed to do with the iPhone 6s.
Even Apple’s advertising supports the general impression that the corporation was concerned from day one that the iPhone 6s would be perceived as a meagre upgrade on previous smartphones by the general public. Apple television advertising for the iPhone 6s chose to focus on all of the ways in which the smartphone differed from previous iPhone releases; a departure from the previous extremely self-confident and assured conceptual marketing that Apple has engaged in.
Of course, the S range of the iPhone series is usually very much an upgrade, and the iPhone 6s didn’t differ from normal Apple policy in this regard. But it was nonetheless viewed in Western markets as a non-essential upgrade from the iPhone 6, and this has perhaps contributed more than any other factor to its relatively poor performance in its key marketplace of the United States. Indeed, it has been reported in the last 12 months that Apple is now shifting more iPhone units in China than any other nation on the planet.
The performance of the iPhone 6s and the fact that Apple was able to deliver few major innovations with this smartphone – with the notable exception of 3D Touch – contributed to a general impression that dogged the market in 2015. Increasingly there is a feeling that we have reached ‘peak smartphone’. The market in the developed world is extremely saturated, and the new models of all of the major handsets offer ever diminishing returns. Actually delivering something that blows people away and represents a technological revolution in the smartphone space is becoming increasingly logistically complex, and in many cases unfeasible and prohibitively expensive.
When public perception reaches this point, it is obvious that people will not be rushing out to purchase the iPhone with the same enthusiasm that occurred in the past. So one of the biggest challenges for the iPhone 7 is to reverse this perception, and deliver something genuinely unique and jaw-dropping.
Challenging Samsung
Compounding this problem for the iPhone 7 Is the fact that the iconic Apple series has fallen behind its Samsung Galaxy rival in technology terms to a certain extent. This hasn’t been reflected in sales; far from it. Apple remains the market-leader by a considerable distance, and Samsung has in fact enjoyed numerous quarters of declining profits. Nonetheless, the Korean manufacturer has crammed its smartphone range with extremely high specifications in recent years, and also embraced features that Apple is yet to include in the iPhone series.
This should change in 2016 with the iPhone 7, as Apple must deliver the handset to consumers that fans of the series are genuinely demanding. This must include numerous new features, with an improved screen resolution definitely top of the list. This should mean the first ever full HD Apple smartphone, alongside a quad HD iPhone 7 Plus. Apple should also include wireless charging in the iPhone 7, and there have already been a raft of rumors about the camera technology that could be included in the device.
A waterproof and dustproof iPhone 7 has also been mooted, as Apple attempts to produce a more flexible performer when the smartphone is released. The consumer electronics giant should also release a smaller version of the iPhone 7, as Apple continues to attempts to generate new revenue streams for the company.
This proposed 4-inch version of the iPhone 7 will play a significant role in the East Asian marketplace, as the demographics of Apple’s sales profile continues to shift. The design of the iPhone 7 must acknowledge this growing trend, and deliver a unit that appeals to both Western and Asian consumers.
Apple certainly faces numerous challenges with the iPhone 7, and only an overhaul of the smartphone concept will enable the corporation to deliver on its hopes and commercial imperatives.
