Apple Takes Another Big Bite from the Smartphone Market

Tuesday’s Apple event proved, once again, that the industry should never underestimate how successfully Apple can break the mold or flaunt conventional wisdom.  Everyone knew two new iPhones were coming – and that they would be 4.7” and 5.5” and that they would look nice, and that they would fit neatly into the current buying, stocking, and usage trends for smartphones in the U.S. (as we discussed in our press release last week).  But seeing a mock-up, or sketching something out as a model, or examining a pirated photograph is a poor substitute for seeing something in person.  And it is impossible to express how slick both new iPhone models are until you see them in person and hold them in your hand.

I had the good fortune to go to the event and see the phones close-up, everyone else will get a chance on September 19th.  When consumers do see them we believe the U.S. smartphone market will be reinvented.   Every smart consumer will immediately see the potential of what a big screen iPhone can provide.  No matter how strong we felt this launch would be, the by-product of two mediocre iPhones before them, two lackluster Samsung product cycles, the growth in mobile video, the sudden new affordability of hero phones through installment plans, and the removal of much of the potential for buyer’s remorse through early upgrade options – this launch will be much stronger than that.

As a dedicated phablet user I love the readability and usability of a large phone.  I love the convenience of a persistent cellular connection and the easing of the smartphone typing challenges afforded to me by a large screen.  The iPhone 6, and especially the iPhone 6 Plus, are going to reset the bar on what those product features mean for a consumer.  While everyone has believed the 4.7” iPhone 6 was going to be the winner in this cycle, I think the iPhone 6 Plus is going to exceed expectations by far more than its smaller sibling.  The sacrifice in comfort and appearance that most phablets have had to endure has been eliminated by the iPhone 6 Plus and its thin body and sleek design, it does not really look (or feel) its size. Those exclamations of wonderment I have heard when I pulled out my 6” phone because of its sheer size will be eliminated.  It is hard to imagine that a consumer, seeing them side by side, would not pick the larger iPhone.  After all, U.S. consumers like big TVs and big notebooks, why not big phones now too?  If it was not for the $100 price premium on the iPhone 6 Plus I would believe it would outsell the iPhone 6.  But while it won’t do that it will be a key catalyst of change in the U.S. to push people towards bigger phones and even more mobile video, data and internet consumption.  These phones are game changers and market disrupters hitting at the right time into a market that doesn’t think it wants want the iPhone 6’s offer but will be quickly convinced.