Apple is not only doubling down on the iPhone X, it's tripling down.
The world's most valuable company plans to launch three new phones soon that keep the edge-to-edge screen design of last year's flagship, according to people familiar with the matter. The devices will boast a wider range of prices, features, and sizes to increase their appeal, said the people, who asked not to be identified discussing unannounced products.
However, none of the three iPhones will be wholly new designs like the iPhone X was last year or the iPhone 6 in 2014, with some inside Apple labelling the launch as an "S year," a designation the company has given to new handsets that retain the previous design but add new internal features. The company is planning more significant changes for next year, they added.
The iPhone X wasn't as big a hit as some Wall Street analysts hoped for before it was released last November. However, it still sold strongly and helped Apple gain share in a smartphone market that has almost stopped growing.
The upcoming phones, planned to be unveiled in September, show the company is adjusting its strategy. Rather than luring millions of new iPhone users, Apple's goal these days is to steadily raise average prices, while expanding the total number of active devices to support sales of accessories and digital services like streaming music and video.
"The iPhone is entering a period of 0-to-5 percent annual growth, and the things they're doing this fall will keep them on that path," said Gene Munster, a veteran Apple analyst and managing partner of Loup Ventures. The "real sizzle" for investors remains the iPhone because it's the hub for almost all Apple's other offerings like the Apple Watch, AirPods, and Apple Music, Munster added. Apple spokeswoman Trudy Muller declined to comment.
In early 2016, the company reported a new milestone: 1 billion active devices. By early this year, that number had grown to 1.3 billion. The three new iPhones due next month have a good chance to add to this important foundation of the company's future.
There'll be a new high-end iPhone, internally dubbed D33, with a display that measures about 6.5-inch diagonally, according to the people familiar with the matter. That would make it the largest iPhone by far and one of the biggest mainstream phones on the market. It will continue to have a glass back with stainless steel edges and dual cameras on the back. The big difference on the software side will be the ability to view content side-by-side in apps like Mail and Calendar. It will be Apple's second phone with a crisper organic light-emitting diode, or OLED, screen.
"Having a bigger screen is always a plus for demand," Munster said, while noting the device should help Apple boost iPhone selling prices, which has supported revenue growth in recent quarters. The average price of iPhones sold in Apple's most-recent quarter was $724, up 19 percent from a year earlier.
Apple also plans an upgrade to the current iPhone X with a 5.8-inch OLED screen, which is internally dubbed D32, the people said. The main changes to the new OLED iPhones will be to processing speed and the camera, according to the people familiar with the devices.
Perhaps the most significant phone will be a new, cheaper device destined to replace the iPhone 8. Codenamed N84, it will look like the iPhone X, but include a larger near 6.1-inch screen, come in multiple colours, and sport aluminium edges instead of the iPhone X's stainless steel casing. It will also have a cheaper LCD screen instead of an OLED panel to keep costs down.
The cheaper version's aluminium edges won't necessarily be the same colour as the coloured glass back, simplifying production, one person familiar with the matter said.
Hon Hai Precision Industry Co. will assemble the two high-end OLED iPhones, while the LCD phone will be split primarily between Hon Hai and Pegatron Corp., the people said. Hon Hai began assembling the OLED devices in late July and only started on the LCD phones this month, partly due to minor challenges with the LCD panels, one person said. Taiwan Semiconductor Manufacturing Co. will remain sole supplier of the main processor for the new iPhones, while primary iPhone camera lens supplier Largan Precision Co. is expected to see sales rise with the launch of new Apple phones.