an Apple shareholder, I have to say I have been encouraged by the first reviews of the new iPhones.
Apple gave these iPhones to a group of carefully selected gadget hounds a week ago. Apple then allowed the reviews to be published at 9pm Eastern time last night.
The Fingerprint Sensor Could Actually Be A Big Deal
First, there was the near-universal hyperventilation about the fingerprint sensor that Apple put on the more expensive new iPhone.
This fingerprint sensor, which allows you to unlock your phone by pressing your finger on a button instead of typing a password into the screen, could easily have been a crappy new feature that didn’t work very well and that no one really wanted. But it actually sounds as though the fingerprint sensor works quickly and well.
The unlocking, by itself, does not make the sensor a “game changer,” as one esteemed reviewer gushed. When used to unlock the phone, the fingerprint sensor will save you at most a couple of seconds. But, more broadly, allowing you to authenticate yourself with your finger instead of with a login and password combination could reduce a lot of headaches and friction in the digital world at large.
Apple is already allowing users to buy stuff through iTunes with only their fingerprints, for example–a handy improvement from having to remember and type your iTunes password. And this is presumably only the beginning. It’s not hard to imagine that, a couple of years down the road, Apple will have cut deals with Amazon, eBay, and other big ecommerce companies that will allow you to buy stuff on these sites, or sign into other web sites, with the touch of your finger. And it’s also not hard to imagine that you’ll be able to “sign” for things in the real world (credit card receipts, for example) with your finger, pass through security and border controls with your fingerprint, start your car with your finger, and so on.
In short, now that we know that the fingerprint sensor works well, we can get excited about applications for this new technology that are a lot more exciting than saving a second or two when unlocking your phone.
The New Camera Also Sounds Cool
Second, it sounds like the new camera in the new iPhones is visibly better than the prior version. That’s also good news. iPhone users take a lot of pictures. And no one is going to object to having those pictures look better.
Everyone is also gushing about the new iPhone software (iOS7), but all recent iPhone users are going to get that software. Also, it’s software — after 12 hours with the phone, you’ll forget there was ever any different software. (It’s certainly encouraging that people don’t hate the new software, but they’ve already had a few months to get used to it. So, again, there’s not much news here.)
And, More Importantly…
I have also heard other things in recent days that make me less worried about being an Apple shareholder.
First, I have heard that, despite announcing a price for its new “cheap” iPhone that was too expensive ($500+), Apple actually isn’t that serious about this price.
For example, Apple is already allowing Walmart and others to discount the price. And it’s allowing AT&T, Verizon, and other carriers to provide the phone for “free” by letting consumers pay for it in 24 monthly installments, as part of their regular phone bills.
More importantly, I have heard that Apple views the price of the cheap iPhone–the 5C–as just a starting price and will cut it rapidly. This is one of the big benefits of offering a top-of-the-line iPhone (the 5S) and a cheap iPhone (the 5C). Apple can cut the heck out of the price of the cheap phone to drive sales while also protecting its brand and margin by holding the line on the expensive one.
Lastly, and most importantly, I have heard that Apple may sell the cheap iPhone for different prices in different countries. This is very good news. If Apple can get millions of Americans to pay $US500+ for the new phone (through their carrier subsidies) and sell the same phone for, say, $US250 in China, then Apple can have its cake and eat it, too. It can preserve a lot of its massive profit margin in rich countries but still drive market share gains in poorer countries. (The latter is important, because the iPhone is a platform for third party applications and services, and maintaining a meaningful market share is important for platforms.)
And then there is Apple’s brilliant iPhone marketing plan, which makes it necessary for you to stand in line for at least 24 hours if you want to buy the new iPhone 5S on the first day (tomorrow). This will create massive lines at Apple Stores, which will create an impression of insane demand. Yes, this is an old ploy, and, yes, it is probably less a ploy than the result of Apple not being able to make enough iPhone 5Ss to meet initial demand, but it will have the same effect.
So, overall, I’m encouraged about what I’m hearing about the new iPhones.
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