Tech breakthroughs take a backseat in upcoming Apple iPhone launch

Thu Feb 23, 2017 1:14am EST
 
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By Stephen Nellis

SAN FRANCISCO (Reuters) - When Apple Inc (AAPL.O: Quote) launches its much-anticipated 10th anniversary iPhone this fall, it will offer an unwitting lesson in how much the smartphone industry it pioneered has matured.

The new iPhone is expected to include new features such as high-resolution displays, wireless charging and 3-D sensors. Rather than representing major breakthroughs, however, most of the innovations have been available in competing phones for several years.

Apple's relatively slow adoption of new features both reflects and reinforces the fact smartphone customers are holding onto their phones longer. Timothy Arcuri, an analyst at Cowen & Co, believes upwards of 40 percent of iPhones on the market are more than two years old, a historical high.

That is a big reason why investors have driven Apple shares to an all-time high. There is pent-up demand for a new iPhone, even if it does not offer breakthrough technologies.

It is not clear whether Apple deliberately held off on packing some of the new features into the current iPhone 7, which has been criticized for a lack of differentiation from its predecessor. Apple declined to comment on the upcoming product.

Still, the development and roll-out of the anniversary iPhone suggest Apple’s product strategy is driven less by technological innovation than by consumer upgrade cycles and Apple’s own business and marketing needs.

"When a market gets saturated, the growth is all about refresh," said Bob O’Donnell of Technalysis Research. "This is exactly what happened to PCs. It's exactly what happened to tablets. It's starting to happen to smartphones."

Apple is close-mouthed about upcoming product features, but analysts and reports from Asian component suppliers and others indicate that high-resolution displays based on OLED technology -- possibly with curved edges -- are likely to be part of the anniversary phone. A radical new design is not expected, according to analysts.   Continued...

 
FILE PHOTO - An Apple iPhone 7 and the company logo are seen in this illustration picture taken in Bordeaux, France on February 1, 2017.    REUTERS/Regis Duvignau/File Photo