Apple’s next huge iPhone event is imminent and the rumor mill is churning nearly out of control. Talk of NFC and one-handed controls are the latest inklings to bubble up to the top.
But there are a few rumors that have persisted practically since the iPhone 5S launch. Ahead of the Sept. 9 event, it’s practically a given that the company will unveil two new iPhones (a 4.7- and a 5.5-inch model) and a wearable, likely the fabled “iWatch.”
Apple has taken its time jumping into wearables but the company’s lingering resistance to super-sizing its iPhone displays has lasted even longer. Some analysts feel like the decision to go big should have come sooner.
Recon Analytics’ Roger Entner said if Apple has failed in competing with Samsung it’s by not going big enough, adding that the iPhone display size jump from 3.5 inches to 4 inches was not sufficient to compete.
“If you want to fault Apple for something over the last two years, it’s that it is completely missing the large-screen segment,” Entner said.
Apple’s absence from the phablet market recently came into sharper focus after Samsung unveiled its spec-monster Galaxy Note 4. Apple’s shares fell 4 percent after the announcement.
BTIG analyst Walter Piecyk said the Apple stock fluctuation surrounding Samsung’s Note 4 launch didn’t necessarily mean anything. As he pointed out in a recent blog post, Apple’s stock has always had its ups and downs around an iPhone launch. Since the original iPhone launch, Apple’s stock has risen an average of 5.2 percent in the month proceeding an announcement, risen only 0.3 percent the day of, and fell an average of 2.1 percent in the month preceding.
Apple’s stock fell 2.3 percent the day of last year’s iPhone 5S launch, something Piecyk in part attributed to disappointment over no low-cost iPhone arriving to address demand in emerging markets.
Apple’s upcoming venture onto Samsung’s big-screen turf could have different pricing implications, with reports suggesting the next batch of iPhones might see a price jump.
“Becoming more expensive is not the answer,” Entner said. “The traditional [iPhone] pricing has served them well and the margins should still be roughly in line.”
But Piecyk said U.S. carriers’ move away from device subsidies and toward installment pricing could help to alleviate concerns over an iPhone increase. He speculated a $100 price increase and said that on a 24-month cycle that bump in cost could seem negligible.
“It’s only an incremental $4 a month on your bill,” Piecyk said. “That doesn’t seem like something that would discourage an existing iPhone customer from upgrading.”
In addition, device pricing schemes means more people will be eligible to upgrade to the new iPhone rather than paying full price up-front.
BTIG estimates that at AT&T, which has the highest iPhone install base, only 22 percent of that base was eligible for an upgrade. Coming up on the next iPhone release, due to the new Mobile Share Value plan, BTIG estimates 55 percent of AT&T iPhone customers will be eligible.
“It could be that many of these AT&T customers that have moved down to Mobile Share value plans that are saving them money on a monthly basis may choose not to pay an extra $25 a month,” Piecyk said. “But in the past they didn’t even have that as an opportunity.”
