What the iPhone 5S must have to revitalize Apple’s smartphone strategy
By Chantal Tode
May 20, 2013
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The rumor mill surrounding the next iPhone launch has started grinding in earnest. But while iPhone launches always come with much anticipation, there is an added level of urgency this time around because Apple seems to have lost some of its magic touch.
Long the darling of the smartphone market, the iPhone has been under increasing pressure from Samsung, which had a 30.8 percent share of the global smartphone market in the first quarter compared with Apple’s 18.2 percent share, according to Gartner figures. With Apple needing to drive more sales, there are growing rumors that the next launch – which could take place either this summer or in the fall – will include a lower priced offering to broaden its appeal.
“Faced with increased competition from Android devices, and an installed base of older version iPhones, Apple must introduce a lower priced unit to compete,” said Kurt Hawks, general manager at Greystripe, San Francisco.
"A lower priced model will result in broader consumer adoption of iPhones, further placing smartphones in the center of a consumer’s digital life,” he said. “As consumers continue to shift towards mobile content consumption, marketers will continue to scale efforts to reach a connected audience.
"Apple’s share will rise when owning an iPhone goes from a luxury to a necessity for a broader range of consumers - simply by removing the pricing barrier. The bottom line for advertisers is that a lower price point puts more iOS devices into the palm of the consumer’s hands, which creates additional opportunities for marketers to reach consumers."
The NFC question
Lower prices alone may not be enough to light a fire under iPhone sales.
Last year, many were disappointed that the new iPhone did not come with NFC technology embedded, as had been expected.
While NFC technology is still moving at a slow pace, there are more NFC-enabled implementations all the time. So the question is, will Apple make the move to NFC this time around.
“Some future incarnation of the Apple iPhone will need to establish an offline commerce offering that will move its iTunes credentials to ‘iShop’ credentials in the physical world building on the Easypay service,” said Gary Schwartz, author of “The Impulse Economy” and “Fast Shopper, Slow Store.”
“This will extend their Passbook wallet into impulse purchases,” he said. “I believe NFC is the natural enabler for this iShop service and would allow offline advertisers to tag their media with ‘buy now’ functionality.
“Offline interactive solutions are the next media frontier for Apple. It will expand its commerce and big data footprint while its competitors muddle with in-store POS.”
Part of Apple’s problem is that competitors such as Samsung are beginning to look more forward-thinking by being the first to adopt NFC technology and larger screens. As a result, Apple is losing some of its hold on early-adopters, still a key audience in mobile.
However, if the next iPhone were to come with some cool new features, Apple might be able to quickly regain any ground it has lost.
According to rumors, the focus of the new iPhone 5S is on three potential new enhancements - longer battery life, a high-definition screen and better security via fingerprint recognition.
“The first two could potentially result in users spending more time on the device,” said Seth Hittman, CEO of Run DSP, New York.
“From an ad tech standpoint, this means that users’ purchasing decisions could very well be impacted due to these enhancements,” he said. “Advertisers must adapt to these enhancements as well as the other rumor surrounding the various price points and affordability.”
Apple stumbled last year when it introduced its own Maps service, which quickly received numerous negative reviews from users.
While location-based services are a must-have for mobile users – and to drive mobile advertising revenue – it is also important that the user experience be a strong one.
“Clearly attempting to build their own maps product and force it on users was a misstep last time around,” said Harry Kargman, CEO of Kargo, New York .
“Apple should let users choose their default maps application - meaning that if they want the Apple version as the default for apps and email it is available,” he said. “But, if the user wants to choose Google Maps as the default then all the apps and Apple mail would use Google Maps instead.
“Similar to the default browser on a P.C., Apple should allow users to select their default maps provider.”
Apple also needs to up its game when it comes to the camera embedded in the iPhone as most high end Android devices now have an 8 megapixel camera or better.
“Apple touts its phones as taking more pictures than any other device on earth,” Mr. Karman said.
“Given that the iPhone5 camera is not currently competitive with some of the best Android devices, Apple not only needs to raise the bar to be competitive, but needs to surpass what is currently out there on Android,” he said.
One of the biggest issues Apple faces with the iPhone is its short battery life.
With smartphones being relied on for a growing array of everyday activities, no one wants to be lugging around a dead phone.
A larger screen could also be a key feature to appeal to consumers.
“As the phones become more and more a part of every day, all day productivity, the battery life of the phone becomes critical,” said Marci Troutman, CEO of SiteMinis, Atlanta. “There is an option for a mophie battery pack, but not all consumers are willing to spend an extra $100 for the extended case, having the new iPhone come out with a longer lasting, better battery would be a great benefit.
“With the iPhone competition coming out with a larger screen, and the traction of these phones, it is indicative that this is a feature that the consumers are looking for as a decision maker in a phone purchase,” she said.
Apple does still have the ability to bring out some good surprises – last’s year introduction Passbook is one example.
“I have no idea what it might have, but what I hope it has are widgets, built in watch-with features for TV, a scary-good camera and software, and that awesome 3D hologram thing that hit the rumor mill several months ago,” said Brennan Hayden, executive vice president and chief operating officer at WDA , East Lansing, MI .
“If it has all that, I’ll finally ditch my carry-around Android,” he said.
Chantal Tode is associate editor on Mobile Marketer, New York
Related content: Manufacturers, Apple, iPhone, Kargo, Harry Kargman, SiteMinis, Marci Troutman, WDA, Brennan Hayden, Gary Schwartz, Greystripe, Kurt Hawks, Seth Hittman, Run DSP, mobile marketing, mobile
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