Apple iPhone 12 launch: What the Experts Say

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Apple has announced four 5G-compatible models in its new iPhone 12 range, including a new iPhone 12 Mini retailing for £699. Here three experts give their opinions on the new line up…

Ben Wood, Chief of Research, CCS Insight

Apple’s new 5G iPhone offerings

Despite the pandemic and the global macroeconomic pressures it has created, Apple looks well-positioned. The introduction of 5G technology to the iPhone range gives people a meaningful reason to upgrade and makes buying an iPhone this time around a future-proof purchase. At a time when people are typically holding onto their smartphones for three years or more, that’s an important selling point.

With the introduction of four new models together with the already announced iPhone SE, Apple has a very clean portfolio of devices that offer a “good, better, best” choice for consumers. The range is well-suited to online purchase too. Most people are familiar with what an iPhone looks like and what it offers. All they need to do is visit the website, decide what their budget is, and then make the purchase. It’s not so straightforward with rival products, where there are vast line-ups with lots of tiny differences and a variety of designs and features.

Apple may get an unexpected boost from those fortunate people who have come through the Covid-19 pandemic with a bit more cash in their pockets. Cancelled holidays, less eating out, no commuting costs, not buying a new car and other pandemic-related savings may result in people taking the plunge and treating themselves to a new phone, and the iPhone still maintains a premium position, making it a valued purchase.

Apple no longer relies on the margin it makes at the point it sells an iPhone. The device is a gift that keeps on giving for Apple as it becomes increasingly successful at selling services such as Apple Music, iCloud storage, AppleCare and Apple Pay that result in ongoing revenue from owners long after the phone is first sold.

Although 5G devices have been available from pretty much every other smartphone-maker for over a year, there’s a strong argument that this line-up of 5G-enabled iPhones will be the market-maker for the technology.

Inevitably, the iPhone 12 will mark the real start of 5G for the consumer mass market. Samsung and several Android phone-makers may have had an 18-month head start, but the limitations of early 5G devices, coupled with the time needed to expand network coverage, have meant momentum is still building. Apple is following its playbook by timing this launch for when the market is ready, rather than the technology.

In markets like China and South Korea that are seeing rapid adoption, a 5G iPhone is essential. In Western markets it will be Apple that kick-starts the transition from 4G.

Apple’s first steps into 5G are typical of its tactic of delivering technology when it’s ready rather than trying to drive up adoption by brute force. Although Apple faces a sea of competitive alternatives, its late entry to the 5G party some 18 months after rival Samsung has left few scars.

Having separate launch events for the new Apple Watch and the iPhone 12 has resulted in more-focussed communication. The usual avalanche of hardware and service announcements was replaced by a cleaner presentation of the iPhone 12, the introduction of 5G and a new HomePod. Services remain a critical element of Apple’s business, but focus was firmly on the device behind most of Apple’s revenue and profit.

iPhone 12 mini

The big news for me is the iPhone 12 mini. After years of phones getting progressively bigger, Apple is reversing the trend by offering a flagship product in a smaller package. I think it’ll be a hugely popular move. Where Apple goes, others follow, and I expect all rivals to make similar moves over the next 12 months.

The fact that the iPhone 12 mini also supports 5G is a further advantage. Apple’s positioning of the device as the “smallest, thinnest and lightest 5G phone in the world” will undoubtedly grab headlines. More importantly, it means the iPhone 12 mini will secure a prominent place in network operator portfolios as a highly attractive premium 5G device.

Plenty of people will argue they don’t really need 5G, but the technology’s inclusion in the new line-up is big win for Apple and anyone buying into the iPhone 12 range. They’ll get a future-proof product, which will have better residual value than 4G iPhones. And 5G coverage is only going to get better over the next three to four years, which is the likely lifespan of most new iPhones.

In multiple markets, network operators recognise they need 5G iPhones to recoup the huge capital investments they are making in 5G infrastructure. Although many will be reluctant to admit it, in many cases the iPhone will play a central role in building momentum behind this new technology.

I fully expect a price war to break out between network operators as they use the arrival of 5G-capable iPhones to woo customers from rival networks while boosting their 5G connection numbers.

Prospects for iPhone 12

CCS Insight believes that despite the economic backdrop, the prospects for the iPhone 12 are extremely positive. Expectations of a 5G iPhone have created pent-up demand for upgrades, and many people whose jobs haven’t been affected by the pandemic have benefited from lower expenditure on other discretionary items for much of the year.

It’s easy to be sceptical about Apple removing the charger and headphones from the box, and there are undoubtedly cost-savings, but the environmental benefits can’t be ignored. Other phone-makers have embraced this approach, but Apple’s decision is likely to mean that in many cases the days of a charger and headphones being included with a new smartphone are over.

HomePod mini

Offering the HomePod mini at $99 is surprising. Such keen pricing is rare from Apple and illustrates the company’s efforts to invigorate its smart home strategy in the face of intense competition from Amazon and Google. It’s a positive move, but Apple still faces an uphill battle when it comes to smart home tech.

There were few surprises from the iPhone 12 launch, but predictability has become an advantage for Apple. Consumers’ familiarity with and trust in Apple’s hardware, software and services are a big part of its ability to retain customers and convince them to spend more money with the company. With many people unable or unwilling to buy products at in retail stores owing to Covid-19 restrictions, predictability and familiarity have never been more valuable.

Ru Bhikha, mobiles expert at Uswitch.com:

Apple named this launch event “Hi, Speed”, and that’s exactly what they’ve delivered. Not only have they introduced the new A14 Bionic chip but we finally welcome the anticipated arrival of 5G in an iPhone for the first time.

Apple fans have been waiting to see this new iPhone for over a year, and their patience has been rewarded with a number of exciting new features.

It’s commonplace to see three models unveiled at a smartphone launch, but Apple went one step further by revealing four variants of the iPhone 12 all of which come ready for 5G. 

The new Ceramic Shield durability of the iPhone 12 series means it has the strongest screen of any smartphone, so there’s less risk of accidental damage.

At a modest £699, the iPhone 12 Mini with its 5.4-inch display should prove popular for those who want a more compact 5G device at a lower price point. 

The new wide-angle lens in the standard iPhone 12 gives a boost to the camera and allows Apple to continue boasting its claim of having the highest quality video of any smartphone. Night mode on the front-facing selfie camera is a nice touch. 

Meanwhile, the 6.1-inch iPhone 12 Pro and 6.7-inch Pro Max offer bigger, super retina displays and three rear cameras. The Pro Max goes even further with its camera improvements, including greater stabilisation. 

The removal of the adapter and standard earphones which consumers have got used to receiving could polarise consumers, with some left disappointed and others pleased that Apple is taking steps to be more sustainable.

Before this launch, 16% of consumers said they were planning to upgrade to a 5G smartphone in the next year. The industry will be hoping that this iPhone will spur thousands more people to make the leap to 5G.”

Paolo Pescatore , PP Foresight

Everyone waits with bated breath for the new iPhone. More so now as telcos are heavily reliant on Apple and have been preparing their networks for the first iPhone 5G.

If anyone can kickstart consumer demand for 5G, then Apple can. People are now more conscious than ever and want the best connections, devices and services at an affordable price.

These new generations represent a window of opportunity to drive uptake and sway customer from rival platforms and devices. Apple will sell millions of the new iPhone 5G devices. This will be high on users Christmas shopping list.

Timing is everything. Apple has had a stellar year and arguably could wait another before launching a 5G device.

Rolling out Apple One along with the new iPhone will be a big money-spinner. They both drive each other to drive further value from every user and family (an increasingly and important target audience).”

Apple’s relentless drive to focus on a superior experience with the fastest ever iPhone will strongly resonate with users. This will fuel revenue growth and margins to new heights.

The iPhone remains a core product and gateway to the Apple universe.

Replacement rates have come down over the years. While users are more wary than ever in forking out lots of money on the latest and greatest phone, they will want to future proof their purchase.

For sure, there are areas in services and in the home that are still work in progress. Apple has the assets and is slowly putting all of the pieces together.

 

Chris Price
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