All eyes on Apple for new iPhones

Analysts believe a special event at Apple's headquarters in Silicon Valley will spotlight a more economical iPhone priced to compete in emerging markets where money is tight, along with a beefed-up top-end model.

"The key challenge for Apple this week is to demonstrate that it can maintain momentum in overall iPhone sales and do so in a way which won't drive down margins significantly," said Ovum chief telecommunications analyst Jan Dawson.

"It's key for Apple to be able to find ways to drive growth at a higher rate again, and getting China's biggest carrier on board and launching a cheaper version of the iPhone are both key to doing that," he added.

Apple became a Wall Street darling by pairing blistering sales of culture-changing gadgets such as iPods, iPhones, and iPads with enviable "margins," the difference between cost and price.

Forrester analyst Charles Golvin told AFP the consensus is for Apple to unveil a new high-end phone, adding it is most likely to be called the 5S, with the same look and feel physically but with a speed boost; new processor, and new graphics capabilities.

Speculation abounds

"A lower-cost iPhone has been dubbed the 5C, because it would come in multiple colors analogous to today's iPod touch," Golvin said.

Speculation about the iPhone 5S included the debut of a gold color and fingerprint recognition for enhanced security. "For the most part, we view the iPhone5S as an evolution of the iPhone 5 and as such do not view it as especially innovative," Citi Research said in a note to investors on Monday (9 September).

"However, with the inclusion of a fingerprint reader, Apple opens itself to new opportunities, most notably mobile payments," the research company said.

It remained unknown how low a price Apple would be able to hit with the 5C.

According to Citi, mobile phones priced US$300 or more accounted for only 13.7% of overall phone sales last year.

Analysts were keenly focused on the promise of a 5C to win over buyers in China and other developing markets where there is fierce competition from low-priced smartphones powered by Google's Android operating system.

FBN Securities predicted that launching two new iPhones would reverse gains made by Android-powered rivals in the market.

Apple has invited press to a Wednesday (11 September) event in Beijing that analysts believe signals a deal to add iPhones to China Mobile's massive telecommunications network in that country.

Fingerprint security?

"The only real potential to surprise investors seems to be in the scope and velocity of a new China strategy and any new features within iOS 7 and fingerprint scanner technology," Barclays Equity Research said in a note focused on what is expected from Apple.

Apple's iPhone franchise has historically focused on premium products at premium prices, essentially leaving the company unable to address about 60% of the opportunity in the smartphone market, the investment bank Cantor Fitzgerald said in an analyst note.

"We expect this to change with the introduction of the plastic-encased iPhone 5C," Cantor Fitzgerald said.

Analysts did not foresee any talk of Apple watches or TV at the Tuesday event.

The smartphone market is now dominated by Android devices, with roughly three-quarters of all handsets, but a forecast by research firm IDC suggested Apple will increase its share this year to 17.9% from 16.9%.

At the heart of any iPhone announcements on Tuesday would be a dramatic overhaul to the iOS software powering Apple handsets. New iOS 7 software will debut with a free iTunes Radio Service featuring more than 200 stations and an incredible catalogue of music from the iTunes Store, Apple claimed earlier this year.

The streaming radio service is part of what Apple chief Tim Cook branded the biggest change to iOS - Apple's mobile operating system - since the introduction of the iPhone in 2007.

Source: AFP via I-Net Bridge