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Apple iPhone 5S – Innovative or Incremental Update?

technology upgradeThe 5S, Apple’s newest phone was unveiled today with much excitement and fanfair like past events. With the company’s share price down significantly from past highs and competition stiff, the 5S needs to be well received in order to put the company on the path to growth again.

Features

There are plenty of websites out there that will be covering all the technical details of the new 5S and its lower priced version, the 5C. We won’t be focusing on that.

To briefly sum up the changes in the 5S it has:

A faster CPU
A better camera (video, flash, burst mode, panorama, etc)
More LTE bands to support fast data transfer in other counties
Redesigned iOS 7
A fingerprint scanner for locking/unlocking the phone

The major new feature in the 5S is the fingerprint scanner. From a security perspective this is a great enhancement that will do away with passcodes and will make security of the device seamless. Apple also said you’ll be able to pay for apps using your fingerprint as well.

With the exception of the fingerprint scanner however, everything else is very standard fare. Faster processor, better camera, better software. In short, the iPhone 5S is yet another incremental update to Apple’s line of phones.

While the fingerprint feature is great, I don’t think people are going to be beating down Apple’s door to get their hands on phones with this feature. There have been fingerprint readers on laptop PCs for quite a long time, I’ve not heard of one person that actually wants or uses one however. Granted, laptops and phones are two different devices and are handled much differently.

Form Factor

What Apple missed out on and didn’t deliver in this model, is a bigger screen. I use a Samsung Galaxy S4 and I have to say that I don’t think I’ll switch to a phone with a smaller screen any time soon. A large screen makes a huge difference to any task you perform on a phone and is a massive differentiator.

The form factor of the 5S is the same as the 5, which is virtually the same as the 4S and 4. Seeing a trend? Without a change in form factor, the iPhone is simply not wowing people like it did in the past.

Cost & Emerging Markets

Another major announcement at the Apple event was the new 5C model aimed at emerging markets and cost conscious consumers. It’s a stripped down version of the 5S but still an iPhone through and through.

To put things in perspective, here are the costs of the 5C and 5S side by side.

16gb 32gb 64gb
5C 2yr Contract  $    99.00  $  199.00  NA
5S 2yr Contract  $  199.00  $  299.00  $  399.00
5C Unlocked  $  549.00  $  649.00  NA
5S Unlocked  $  649.00  $  749.00  $  849.00
Difference -18.2% -15.4%

If we compare the prices for the unlocked 5S and 5C, the difference in price is only 18% for the 16gb version and even less for the 32gb version. Is a phone that costs $549 unlocked really aimed at emerging markets? Ask yourself, do people in emerging markets earn 18% less than those in developed markets? Not even close, they earn far less.

The slightly cheaper 5C might make its way into the hands of more buyers, but don’t expect everyone in China or Latin America to start picking these up.

Verdict

At the end of the live coverage by CNET of the event, they conducted a poll of their viewers and asked if Apple was still innovative or if they were lagging behind competitors. 54% of people felt the company was still innovating while 46% thought they were lagging behind.

I am firmly in the camp of the 46% of respondents who believe the company is lagging behind. The fingerprint reader and new features are great but it’s just the next incremental version of a solid product, nothing to get excited about.

What about the company’s share price? Down 2.28% on the day, it seems investors aren’t impressed either.

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2 Responses to "Apple iPhone 5S – Innovative or Incremental Update?"

  1. I agree they are really starting to lag behind with their updates. I’ve never been a huge Apple fan and this might give Microsoft a little time to catch up in the market if that’s even possible. It’d be cool to see a true 3 horse race again.

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