Apple is expected to unveil some new additions to its current family of iPhone and iPad devices at the company's product announcement on Monday, March 21, 2016.Eric Risberg/The Associated Press
Since 2007, when Apple Inc. launched the iPhone, the company's mobile-device-unveiling news conferences have become must-watch events for the tech trade and hungry fans. At its latest event on Monday, the company will try to answer three burning questions: Can Apple ever expand its all-important iPhone category again? Is its larger ecosystem keeping pace with more focused competitors? And, what will happen in its escalating battle with the FBI?
That last item is adding a wrinkle to this year's expectations. Apple's latest devices usually dominate a couple of complete news cycles, thanks to a splash of industry leaks as well as pre- and postlaunch analyses as the tech and business press tussle over what it all means. But Apple's not doing itself many favours with an event that seems likely to focus on tweaking the size of its popular devices and not much more, while in the middle of a weeks-long public fight with the FBI and the U.S. Department of Justice over encryption, the subject of a major showdown on Tuesday.
The primary expectation is that a new iPhone SE will replace the old 5S: It will have a 4-inch screen, the latest NFC chip (to support Apple Pay), the newer A9 processor, but reportedly no 3D Touch (available for now only on the iPhone 6S and 6S Plus variants).
A new, smaller iPhone is an interesting idea: Until now, Apple's iPhone sizing policy has been a one-way ratchet in that the new ones only got bigger. Apple resisted the megasize phones that Android partners such as Samsung pioneered, such as 2011's 5.3-inch Galaxy Note, waiting until 2014 to launch the iPhone 6 and 6 Plus. The popularity of those larger devices – coupled with partnerships with China's biggest mobile carriers – pushed iPhone sales to their highest levels ever.
The only trouble was that the 2014 holiday sales of the iPhone 6 were so outstanding that Apple stock started a year-long slide as investors feared it couldn't match those numbers. Indeed, the good but not great sales of the 6S and 6S Plus in holiday 2015 suggested that the ever-growing iPhone category had reached market saturation.
Can a smaller phone kick-start growth? Analysts at Citibank offered a take on how a cheaper, but updated iPhone selling for less than $500 (U.S.) could boost sales: "Apple currently has 2-per-cent share in India for calendar 2015, and we believe if the company were to increase its market share to be similar to that in China [about 13 per cent] this would increase iPhone units by 15-20 million units," senior analyst Jim Suva said.
The potential is significant, given that India's active user base of 170 million is the second largest in Asia and is expected to outgrow the U.S. base of 190 million early this year, Mr. Suva said. Smartphone unit growth in India is also expected to remain in the range of 25 per cent to 30 per cent, he said, compared with low-single digits in China and North America.
Even though 70 per cent of new phones sold in India are in the sub-$200 price range dominated by Android, Mr. Suva thinks that still leaves plenty of room for iPhone SE sales to thrive.
The other announcements may not move the needle much. Last year's megasized iPad Pro (12.9-inch screen) is expected to get a new smaller relative, something below 10 inches but with another custom keyboard. There is also an expectation that Apple will release new wristbands and perhaps a software update for its Apple Watch. With little sign of news on connected home devices, traction in the Apple Car segment or major updates to its other services, Monday could be an unusually quiet launch day for the company.
But the main event starts on Tuesday, when Apple gets a hearing in front of Magistrate Judge Sheri Pym, of the U.S. Federal District Court for the Central District of California, to fight the order she handed down on Feb. 16 that would force the company to help the FBI unlock the iPhone of San Bernardino shooting suspect Syed Rizwan Farook. Apple filed for relief from that order on Feb. 25, and a war of words – fought in the media with leaks and interviews and in court with testily worded filings – has raged ever since.
The rhetoric over encryption is hotter than any air that will leak out of the carefully staged Monday event. Chief executive officer Tim Cook likened the computer code the FBI is requesting to "cancer" and a "master key to turn 100 million locks" while U.S. President Barack Obama raised the spectre of child pornographers using iPhones and warned against "fetishizing our phones above every other value." Former Clinton and Bush-era counterterrorism official Richard Clarke called for a pox on both their houses, saying, "Every expert I know believes that NSA [the U.S. National Security Agency] could crack this phone. … [The FBI is] not as interested in solving the problem as they are in getting a legal precedent."
Even though the courthouse faceoff happens 700 kilometres away in Riverside, Calif., the day after Apple's iPhone event at its headquarters in Cupertino, the two events are inseparable.
In years past, competitors such as Amazon, Samsung, Microsoft and Google might have scheduled their own glitzy press conferences close to the time of an Apple event. But none of those events ever really stole the spotlight from whatever new i-thing Apple wanted to talk about. It turns out only one company can steal Apple's thunder: Apple itself.
Shane Dingman