APPLE WORKING ON CHEAPER iPHONES / WHY ANDROID IS WINNING TABLET PC WAR


CYBERSPACE, JUNE 24, 2013 (MYBROADBAND ONLINE) Apple is exploring launching iPhones with bigger screens, as well as cheaper models in a range of colors, over the next year.

Apple Inc is exploring launching iPhones with bigger screens, as well as cheaper models in a range of colors, over the next year, said four people with knowledge of the matter, as it takes a cue from rival Samsung Electronics.

The moves, which are still under discussion, underscore how the California-based firm that once ruled the smartphone market is increasingly under threat from its aggressive South Korean competitor. Samsung has overtaken Apple in market share through the popularity of its bigger-screen Galaxy “phablets” and by flooding the market with a range of products at different prices.

Apple is looking at introducing at least two bigger iPhones next year – one with a 4.7-inch screen and one with a 5.7-inch screen – said the sources, including those in the supply chain in Asia. They said suppliers have been approached with plans for the larger screens, but noted it is still unclear whether Apple will actually launch its flagship product in the larger sizes.

“They constantly change product specifications almost to the final moment, so you’re not really sure whether this is the final prototype,” said one person with direct knowledge of the matter.

Apple declined to comment.

UNDER PRESSURE

Apple’s possible shift to offer what is often referred to as “phablets” – chunkier smartphones not quite big enough to qualify as tablets – comes as the long-time consumer and investor darling faces pressure to deliver more than one new handset model a year. Critics say its pace of innovation has slowed since the death of legendary co-founder Steve Jobs.

The iPhone 5 launched last September was the first to veer away from the Apple phone’s 3.5-inch screen, which Jobs famously deemed “the perfect size for consumers” and had been used in every iPhone since the iconic device was unveiled in 2007.

The current iPhone 5 has one of the smaller screens among the best-selling smartphones in the mobile market, where consumers spend more time browsing the web and streaming content. Samsung’s Galaxy S4 and Galaxy Note 2 have 5-inch and 5.5-inch screens, respectively.

For this year, Apple is expected to launch two new models, widely referred to as the iPhone 5S, with new fingerprint technology, and a cheaper version in plastic casing, supply chain sources have said. Apple plans to dress up the cheaper phone in a range of 5-6 colors to differentiate it from the more expensive model that has traditionally come only in black and white.

The U.S. firm has discussed a price of $99 for the cheaper phone, the timing of which could slip to next year, one of the people said. It’s not yet clear what the final price would be.

Apple – whose revenue growth has decelerated from the heady days of 2010 when it introduced the iPad and when the iPhone was the world’s top selling smartphone – has sought ways to re-energize its flagship line.

BROADER PRODUCT RANGE

Analysts say the company needs a cheaper gadget to push on in growth markets in China and India, and to counter Samsung’s edge in having phones priced up and down the spectrum. China, the world’s biggest smartphone market, is set to grow 48 percent this year, outpacing the global increase of 31 percent, according to industry forecasts.

While Apple only offers a single phone model across all markets, it has successfully marketed the iPod music player and its iPad in different sizes and at varying prices. Asked at last month’s AllThingsD industry conference why Apple hasn’t launched different sized iPhones, CEO Tim Cook said: “We haven’t so far. That doesn’t shut off the future.”

He explained that the range of iPods serve different audiences and needs. “On the phone, that’s the question. Are we now at a point to serve enough people that we need to do that?”

Cook noted a larger screen comes with trade-offs on features such as battery life, resolution and brightness.

Test production for both the standard and cheaper iPhone models aims to start next month, with mass production ramping up in August to meet a September launch target, two people said.

“Trial production was originally planned to start in June, but the mixing of colors is taking longer than expected as Apple has very high and idealistic standards,” said one source in Asia, adding 20 million plastic iPhones are expected to ship in the October-December quarter.

Japan’s Sharp Corp and Japan Display and South Korea’s LG Display will supply the panels for the aluminum iPhone 5S and the plastic iPhone, while Hon Hai Precision Industry will assemble the higher-end phone and Pegatron will put together the cheaper model. (Additional reporting by Mari Saito and Miyoung Kim; Editing by Ian Geoghegan)

FROM FORBES.COM

Why Android Is Winning The Tablet Wars Todd Hixon Todd Hixon, Contributor

Android tablets took the lead from Apple AAPL -1.37%‘s iOS tablets in Q1 of 2013 (source). This is a huge change from three years ago, when Apple invented the modern tablet.


Global electronic tablet market share by OS and Vendor; data via IDC and Strategy Analytics.

What is happening and where is this going? I see four driving forces:

1.Tablets are more than a media consumption device now
2.Android has matured
3.The rise of Samsung
4.Democratization of tablets

Tablet computing is well beyond the control of Apple’s iTunes content delivery system.

In the early days of the iPod and the iPhone (ancestors of the iPad), you could hardly use the product without periodic plug-ins to iTunes to get content and configure the device. After that Apple’s App Store held hegemony on the apps that give tablets value.


Data via CivicScience.com; See end notes on category definitions.

Those days are over. The chart at right shows that the biggest usage mode for tablets is communications: e-mail, web, social media, etc., where Apple has no advantage in content access. Work usage is also important, and the productivity apps for Apple and Android are fairly comparable.

The second biggest use is media and entertainment. Apple had a big advantage at the start here, but the playing field here has been leveled to a large extent. eBooks and music are equally available on Android, a wide selection of video is available from Google GOOG -0.26% Play, Netflix NFLX -0.65%, and Amazon, and there are numerous Android tablet games, although probably fewer options than iOS.

Android itself has come a long way, most recently on tablets. Android 3.0 “Honeycomb” two years ago was weak and buggy, however the current 4.2 “Jelly Bean” release is full-featured and slick. Market research suggests that Android users love their OS just as much as iOS users love theirs (more). Combined with a nice hardward platform like the Nexus7, Android delivers a very competitive tablet.

And, Samsung is a force of nature. At CES in 2011 they had a Galaxy product targeting every Apple mobile product from the iTouch to the iPad. They experiment with many size and design variations: they were early with the now-dominant 7 inch tablet and pioneered the surprisingly successful “phablet” concept (~5″ devices that are big phones or small tablets). Consumer research showed that Samsung’s brand did not match Apple’s, and they responded with a brand marketing blitz that makes them the biggest U.S. spender in mobile electronics, including LeBron James in a Superbowl ad. Samsung is now arguably a stronger brand than Android; the two together are formidable.

Apple is holding the price point up and resisted offering a smaller tablet; it needs high prices to satiate Wall Street‘s lust for predictable earnings. Other vendors have democratized the business by with good offers at lower price points. The five most popular tablets on Amazon today (May 14, 2013) are four 7 inch Kindle and Samsung tablets selling for $179 – $229, and an 8.9 inch Kindle selling for $269. Comparably configured, these products are $100-$200 cheaper than Apple’s products. And, there is a third tier of 7 inch Android tablets in the $100-$200 price range that now takes about 30% of the tablet market: the big orange band on the first chart above.

Apple held on to over 70% market share in iPods throughout the life cycle. The iPod is a media consumption device, and the link to the iTunes content access/management platform was unbeatable. It’s clear that tablets will be a different story, more like PCs. They are becoming a diverse market with several strong brands (Samsung, Asus/Google, Amazon/Kindle), a large number of popular-price offerings, and multiple content access platforms.

This is good news for the eco-system. Apple and Google have done a great job of showing the way and creating a rational platform, but the true potential of tablet computing will emerge only if we let all the flowers bloom.


Chief News Editor: Sol Jose Vanzi

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