Apple News & Analysis : Three Guys And A Podcast

Two_iphone_6The highly anticipated and much rumored iPhone 6 is likely launching in two models, one with a larger 4.7" display and the second with a gargantuan 5.5" tablet/phone size (AKA phablet). But is launching two large screen smartphones a good idea for Apple considering that just a bump to 4.7" display is upping their current 4" display area by 38%? Here's T-GAAP’s two divergent points of view.

Apple should not launch two NEW iPhones

If Apple launches a 4.7" iPhone 6 in the Fall, it will likely see the largest sales in the history of smartphones. The upgrade cycle for legacy iPhones has amassed to be largest ever. Apple need only deliver a few new features, such as a larger 4.7" display, and a massive upgrade cycle will happen. 

Steve Jobs was the king of KISS (Keep It Simple Stupid). A singular focus on one product, giving it a wide media birth, with cutting edge design was the recipe for Apple success. Launching two sizes only complicates the choice, causing consumers to vacillate between sizes, and in the end, perhaps look at other options or just stick to the device they have while they consider what to do next. Two iPhones does not necessarily mean increased sales.

If two iPhones are launched, pricing is likely to be $199 for an entry level 4.7" iPhone, and $299 for a 5.5" version. The pricing creates further confusion as some will certainly lean towards the phablet-sized iPhone, but the price of $299 will not agree with their wallet. This only leads to a customer waiting or picking an optional competitive product at a lower price. Yet another case where one is better than two.

Launching only a 4.7" iPhone would allow Apple to gage the uptake in the all-important, emerging Asian market. The vast majority of the world’s population cannot afford both a tablet and a smartphone, thus phablet sized devices have become a popular middle ground. If a 4.7" iPhone stole enough sales from Samsung and other Chinese phablet makers, Apple may not need to launch a 5.5" iPhone. Delivering just one iPhone would increase Apple’s economies of scale to amazing levels, while showing the industry it doesn’t follow trends, it creates them. However, if the 4.7" doesn't convert enough phablet buyers, Apple can then launch a 5.5" iPhone in early 2015. Launching one phone in the Fall gives Apple options down the road.

Launching two sizes this Fall will cause consumer confusion, leaving Apple no phablet option for a later date, only discovering a 5.5" iPhone wasn’t necessary in the first place. The risk is in low iPhone phablet sales, negative press, and the perception of a failed product and faltering brand. There is simply no need to rush a dual iPhone launch this Fall.

Apple should LAUNCH TWO NEW LARGER DISPLAY SIZES

Samsung, LG, HTC, and countless Chinese brand Android smartphones are dominating the 5" or larger phablet market, while Apple lets this customer and market share go to waste. It would be in Apple’s best interest to deliver a 4.7" and 5.5" iPhone this Fall, giving consumers more choice in iOS devices than ever before.

The Asian market is rapidly migrating to phablet sized products, and Apple needs to engage this market and begin to dominate it. A 4.7" iPhone is not likely to sway users who simply need a device that drops into a half-tablet / half-smartphone device world. Launching multiple sized iPhones may not seem like an Apple-esque move, but it is simply what the market demands. 

Apple can either sit back and begrudgingly move to a 4.7" display size only, or realize they have the opportunity to put a massive dent into Android’ world-wide market share. For Apple this option would be the nuclear option against Google’s OS. The timing couldn’t be better for Tim Cook to play hard ball and show that Apple’s still “got game” and will take aggressive moves when required to do so.

What's your opinion? Should Apple launch two iPhones this fall or just one?

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