At the “Hi, Speed” event Apple aired on Tuesday, it was all about the iPhone. Of course, it was about the iPhone 12 new models, all four of them, but the iPhone was front and center even as Apple introduced the new HomePod Mini and Apple’s vision of the smart home.
Many have covered all the speeds and feeds of the different models, so I will not spend time doing that. If you have missed something, you can easily find a model comparison on the Apple website. What I want to spend time on are a few key bigger picture points that help to position the new models in the market and broader Apple context.
The Super-cycle
I was asked several times whether Apple would see a super-cycle with the iPhone 12, and the answer I gave was honest but not very helpful: it’s complicated. All things equal, Apple has the perfect product lineup: new design, four products that span a wide enough price range, and a new technology, 5G.
However, the reality is that the iPhone 12 models are hitting the market during an economic downturn and, in the US, a time of considerable uncertainty. There is a high degree of reliance on technology that we all have experienced during the pandemic, which might counter this market negativity by encouraging an upgrade cycle for the device that we still all turn to the most: the smartphone.
On Apple’s side, there is a user base with the largest proportion of users falling into higher-income brackets, a factor that will soften the impact of the economic downturn. Outside the early-adopter group looking for the iPhone 12 Pro and iPhone 12 Pro Max, and likely to jump on the new products as soon as they are available, we might see a more spread out cycle. This is because different countries are opening up more while others are fighting the threat of a second wave of the pandemic.
Three LTE models remain in the portfolio, iPhone SE, iPhone XR, and iPhone 11, which will continue to drive some decent volume for Apple both from users who are upgrading from older models as well as for users and markets moving to 5G more slowly. Being a year old or less, combined with the value Apple always provides through software updates, gives buyers choosing these models confidence in their purchase.
5G
Apple had a slide during the event that said “5G just got real.” Depending on where you sit on the 5G hype cycle, you either think that 5G has been real for over a year now or, that we are still all waiting for it to be real. As it’s often the case, the truth is somewhere in between. 5G has been available in many markets for a while, but networks’ coverage and performance still leave much to be desired.
I did not think Apple would make a big deal out of 5G, and by and large, that was the case. Tim Cook reminded us of the privacy and security benefits of 5G over Wi-fi. The rest of the time dedicated to the topic was spent explaining how Apple differs in its implementation of 5G.
Apple made a couple of interesting decisions given when they are joining the 5G party. First, as expected by most, the full iPhone 12 family is 5G. Apple highlighted its space efficiency, which allows enough room for multi bands support.
In the US, the entire iPhone 12 family supports mmWave rather than just having one Verizon model. This helps Apple with economies of scale and better production and inventory management at a time when the pandemic is making it harder to forecast. With mmWave support spread across the family, the premium that we have seen other manufacturers put on the Verizon skew is less evident but might become more apparent as we see pricing in other regions.
The second interesting decision was to apply AI to 5G through “smart data mode.” This means that the iPhone smartly decides when to use 5G or LTE based on speeds and use cases. When your iPhone doesn’t need 5G speeds, it automatically uses LTE to save battery. But when 5G speeds matter, the iPhone 12 starts using it. Apple also delicately pointed out that users will experience different 5G speeds based on where they are located.
iPhone SE vs. iPhone Mini
When the iPhone SE was launched in April 2020, I wrote:
“The iPhone SE feels like a different kind of product, though. It is not a model we should expect to be refreshed with the regular cadence we see in the rest of the portfolio. Instead, it’s a product that serves the purpose of getting the most pragmatic users to upgrade after holding on to their phones for years. These users might be coming from a hand-me-down or a secondhand iPhone or even be Android users looking for their first iPhone… If I had to guess when a good time for the next refresh of the iPhone SE might be, I would say that in another four years sounds like a good time considering that by then, 5G will be truly mass market.”
After this week, I have started to change my mind, and I am guessing that the iPhone SE we have in the lineup today might be the last model that will bear the name. Going forward, the iPhone Mini will reflect a more compact form factor with all the essential features and a lower price point. Next year as the iPhone 13 Mini is introduced, I would expect to see the iPhone 12 Mini hitting a price point much closer to the iPhone SE, which will probably remain in the portfolio perhaps till 2022.
iPhone 12 Pro Max vs. iPhone 12 Pro
At the other end of the iPhone 12 Mini, we find the iPhone 12 Pro and iPhone 12 Pro Max. After a couple of years of providing parity of features but a difference in size in the high-end models, Apple returned to making the largest model the one with the best camera system. When Apple first did this with the iPhone 6Plus, they were unprepared by how much the mix skewed towards the larger size. Users were prepared to buy a larger device to take advantage of the superior camera system.
Both Phone 12 Pro models offer the ability to shoot in RAW format, meaning that the user can manually make the photo look its best rather than having the iPhone automatically do it for them. For video, both Pro models support HDR video with Dolby Vision, up to 60 fps, and even better video stabilization. The iPhone 12 Pro Max takes the pro camera experience even further with a new ƒ/1.6 aperture Wide camera with a 47 percent larger sensor delivering an 87 percent improvement in low-light conditions. It also includes the expansive ultra-wide camera and a 65 mm focal length Telephoto camera for increased flexibility with closer shots and tighter crops. Combined, this system offers a 5x optical zoom range.
The iPhone 12 Pro Max impact might end up being quite different from what we saw with the iPhone 6 Plus. The iPhone 12 Pro Max might not end up skewing sales volume, but it might certainly capture new generators of creators, a segment that Apple has always cared a great deal about and that over the years have become more and more mobile-focused.
Much like many users buy into 5G to future-proof their smartphone purchase for a few years, it seems to me that Apple has used 5G to rethink its iPhone portfolio setting it up in a way that makes it easier for buyers to pick the right product for them. I will be sharing more about the iPhone 12 cameras, the new MagSafe wireless charging, and 5G performance as I test the devices between October 23 and November 13. With no MacBooks being announced at the “hi, Speed” event, I am also guessing we will have “one more thing” from Apple before the end of the year.
