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Analysis: Apple's March 21 iPhone SE event
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Mar 21, 2016, 07:10 PM
 
The Apple Event held earlier today was an unusual one in several ways: it started off with a look back across the last 40 years of Apple (the company will celebrate that anniversary on April 1), and spent significant time on its non-commercial side: a couple of minutes on the encryption battle with the FBI, a full environmental report card, and news about the progress of ResearchKit and the introduction of a "sequel" of sorts, CareKit. Finally we got to the product announcements, and a few quiet releases after the events. Here's our thoughts on what we saw.

How did your predictions match up to what actually happened?

Charles Martin, editor: Well, though I speculated (and missed) on the option of a four-inch new iPod touch with optional cellular-data capability (no cellular telephony) along with the "iPhone SE" -- and in truth I did not think they would go for that name for it -- I did say it would be alongside an iPhone model with the same spec. Of course I figured on the iPad Pro in the 9.7-inch size, with Smart Connector and Apple Pencil support.

I was surprised that the iPhone SE has such strong specs (that may turn out to be a mistake, as it will surely hurt the Average Selling Price which will in turn hurt the stock) and I still think that in North America that's a niche or "My First iPhone" type product, but maybe it will help them gain share in the developing markets, since if you can get past the small screen it's a heck of a value.

I did predict we'd see some more about health monitoring, but I put it in context of additional Apple Watch firmware updates or more sensors embedded in bands. Those things are yet to come, I guess, but I think they are coming. CareKit and ResearchKit reports are always really moving because most of us know someone who is suffering or died from one of the conditions researchers are trying to zero in on, and this is very obviously a pair of big and altruistic tools Apple has given them. The "recovery from surgery" app in particular sounds like genius to me.

Mike Wuerthele, managing editor: I didn't do very well. I suspect that I'm still using "old Apple" experience to predict "new Apple" moves. I didn't think that there was any chance that the new phone would have the A9 or 4K capability, but it has both, and at a very, very attractive price point.

Nobody got the price right. At $400, the price for the 6s in a small package is $50 less than the 5s was yesterday. It's also notable that Apple used the retail price -- they only gave lip service to the phone being free on a contract as nearly nobody has subsidized phone plans anymore! We got the smaller iPad Pro, including Apple Pencil support and speaker additions right on the money. I think that's universal amongst all the staff.

William Gallagher, best-selling tech author and OMT host: I mostly avoid predictions, and especially avoid as many rumors as I can -- because at best the make the events dull, and at worst they're just wrong. Still, this time the only significant thing I didn't somehow gather would happen was CareKit. Sure enough, this does mean I found the event a bit duller than usual. Part of that, though, was that it seemed a bit less polished than usual.

Charles: Yes, it was a bit all over the place, wasn't it? Still, back in the days of Apple struggling to rebuild post-1996, Steve Jobs once promised the press some kind of new announcement every 90 days for a while there, just to keep the interest up. I like the idea of Apple saving certain sorts of things for the "expected" events around September and often just before the Worldwide Developers Conference, and then having more spontaneous "events" like this when they think they have enough to put one on.

Malcolm Owen, news writer: For the iPhone SE, I did agree there would be a smaller one, but I also stupidly looked at it as a full product line refresh, which in hindsight wasn't a bright idea. Screen size for the SE was right, as was the keeping of the headphone jack. On iPads, I went with the Air-sized Pro, which was right, along with the same internals as the larger version. I did falter by suggesting it was a replacement to the Air instead of being an alternative option. Apple Watch? I nailed the lack of a hardware change, and that there were new bands on the way. Heck, I even guessed there would be some sort of comment about protecting customers, that stopped short of confirming any major new security initiatives.

Overall, I'd have to say I did better than a Magic 8 Ball, and right on a fair few things. Does this make me an "industry analyst"?


Would you or anyone in your family consider buying an iPhone SE?

Malcolm: As someone who likes bigger phone screens due to having relatively large hands, the iPhone SE doesn't quite do it for me. Seeing as the UK is still clinging on to two-year contracts rather than installment plans for devices, it does offer an attractive proposition for those wanting an iPhone without also having to deal with the sticker shock of the up-front payment.

Mike: I don't care for the larger size 6-family phones for me, so yes, the iPhone SE as it stands, with the A9, is tailor-made for me, and will replace my 5c. Its still more than what the senior citizens in my house need, so they'll stick with what they've got until those devices die, then get my old 5c until it dies, then maybe something new after that. Hey Apple, you're not the only one into recycling!

The price cut drum is going to get beaten profoundly and with effect in the press, but the monthly cost on installments isn't much different than a 6-series iPhone, really.

Charles: This might well be my wife's next iPhone, she has always tended to favor the smaller screen and thicker chassis. I would not give up my iPhone 6s, I really love it and it has turned out to be a great "move up" in terms of larger app displays. We still have contracts up here in Canada, so we'll take a look at that when hers is nearly up.

William: I really believed that the answer was "no." I was certain that had this been two months ago, my wife Angela would be queuing at the Store but that now, no. She's been using her iPhone 5 with a Mophie battery case that has made it bigger, and I believed that has been enough to get her used to having to reach further. However, I'm wrong. I just asked her. She would buy it like a shot -- if it has better battery life than her iPhone 5.


Will this new 9.7-inch iPad Pro get older iPad owners to finally upgrade en masse?

William: No, but it should do. As with the iPad Pro, I really don't think that the specifications do the machine justice. What will happen is that people who need or want a new iPad will buy it, and they will delighted with the iPad Pro -- I think surprisingly delighted.

Charles: I think it might be. In my Mac group, we see a lot of iPad minis and iPads, but no iPad Pros. That said, I see iPad Pros around in the hands of cafe sketchers enough to know they really, really like the Apple Pencil. My impression is that most people who own iPads really like them, but they do seem to have a replacement cycle more like computers -- because a lot of people use them as replacements for computers. Plus, we're five years out from the iPad 2, which came out in 2011 and is now obsolete. I think a lot of "iPad 3" and "iPad 4" owners will give them up as well in favor of a newer, much faster and much lighter model.

So it would seem that Apple has to make the case that this version is compelling enough to upgrade. The first iPad Pro made that case, I think, because Microsoft had somewhat successfully (and after four tries, but who's counting?) made people understand that these tablets can actually be full replacements for a notebook PC. From MS's perspective, this is because the Surface can be both, and runs Windows. From Apple's perspective, it's because most users do a few relatively basic tasks with them. Writing, email, Facebook, surfing, casual games -- even a MacBook is considerable overkill for that level of task, and the tablet (it turns out) is pretty perfect for it.



Mike: This is really a use case question: it really depends on what the user is doing! Apple's biggest opponent in this class of device is itself. While a phone upgrade cycle seems to be between 18-30 months before users feel the device is too old or too worn to continue to use, the iPads soldier on seemingly forever.

Charles: Microsoft has made people who do what you or I might call "light-duty" work on these devices maybe don't need a full notebook -- but then the problem was that you couldn't get all the apps you needed, and the keyboards for the iPad and particularly the iPad mini are small and cramped rather than full-sized. Apple has since solved, for the most part, both problems: the Smart Connector tells people it is okay to use the iPad as your home or mobile computer replacement, not just a mobile or "couch-surfing" type device. Apple can point to it and say "Microsoft Office is on this. HBO is on this. Social media is on this, FaceTime and email and messaging and yes, card games are on this. Get rid of that notebook and get this tablet instead."

That won't sway the gamer or power-user crowd, but it might sway the casual user (who perhaps likes to draw) that it is time to upgrade from that iPad 3 they have -- or maybe to look more closely at tablets as a possible replacement for their bulky notebook. Apple CEO Tim Cook seems to think it will pull in "hybrid" notebook/tablet users who often find that those devices don't really excel at either aspect. He may have a point there.

Mike: Visual content creators, can, and will, shift. As we've discussed at some length, my iPads are media extenders and content consuming devices. For now, my personal iPad 4 is fine for 99 percent of my needs, which is good, as the family's iPad Pro has been completely taken over by the disabled trio in the house!

Malcolm: On the whole, I doubt it. The issue with a tablet-notebook hybrid is that you need a potential customer in need of a notebook upgrade in the first place, and if they have a relatively recent iPad, people are more likely to cheap out and get one of the existing keyboard covers and a third-party stylus that works with their existing hardware.

If the question was for people who didn't own an iPad in the first place, nor a MacBook, then it becomes a more likely prospect. Take for example my own situation: while I primarily work on a Mac mini, my notebook is an ancient and bulky Dell with a spare battery and a malfunctioning DVD drive, and my Android tablet is now too old to even get upgraded to more recent releases of the operating system, with its current bugginess and random shutdowns making it less useful than an alarm clock. I was intending to get an iPad in the near future, and the price of the first Pro made it unappealing, since I expect to replace my notebook properly at some point. The cheaper 9.7-inch option doesn't make my wallet weep so much.


Will CareKit have the same kind of major impact on medicine that ResearchKit did?

Malcolm: Probably, but only where ResearchKit is actively being used. The problem with both is that they are a mechanism for communication between the medical industry -- including care-givers and researchers -- and the patients, and it requires the use of smartphones to work, and it isn't always the case that both sides will have them, such as in developing countries.

Mike: I believe it will, but only in that subset of people who can afford it, and not right now. Medicine reminders on the iPhone have always been popular, and monitoring devices work better as wearables, than pocket-ables. so an Apple Watch will be more or less de rigeur for CareKit app developers, and this will limit the reach that the platform has as a medical benefit.

I also think that this is more of a future technology, and will be better as sensors advance on the platform. It'll also get a boost when Apple gets full permission from the US Food and Drug Administration to use the Apple Watch as a medical monitoring device, as opposed to the limits that it has now, because of the lack of certifications.

William: Yes. The constant data updates, the ability for doctors to monitor in such detail, it's a remarkable thing.

Charles: Even just based on the little we saw at the demo, the potential for CareKit is enormous. You're right that the iPhone in combination with the Apple Watch or other sensors/wearables would be even more powerful, but the iPhone can already measure a lot, because it gathers data on movement, steps taken, and some other things just in the course of a day. In combination with the Watch's heart-rate monitoring, that's already a lot of info doctors didn't previously have on that scale. The whole idea behind ResearchKit and CareKit isn't just to get the data results, it is to involve the patient in their own care. The interactive element of CareKit, coupled with wearables, can really make a big change in that regard, I think.


Which will have the bigger impact on Apple Watch sales: the $50 price cut, or the new band options?

Mike: Genuinely, I don't think it matters, nor will we ever be able to tell. Apple is famously not talking about sales numbers, and the $50 price cut is an evolution in the product, the same as a new GPU or processor is. Wearables are a future of computing, and Apple is staking its claim where it always does -- at the upper end. Adding to that, Apple's market for the Apple Watch is a subset of the iPhone market, and it will always be so. So, while I think the $50 cut makes a difference, I don't think it'll move the needle that much, and I don't think Cupertino cares if it does or not.

I'm probably the wrong person to ask, but Apple's watch bands make no difference to me, and it makes it hard for me to see that it makes a difference to anybody. There are enough third-party options with nearly identical quality in bands for me to not even consider the very pricey Apple options.



Malcolm: Of those two options, I'd have to go with the $50 price cut, as bands can be easily acquired. Add in the lower-cost iPhone SE, and you suddenly have two cheaper Apple devices that could potentially be acquired at the same time by someone upgrading their smartphone. Sacrifice the size of the iPhone 6s for a smaller device that does the same thing to save some cash, and use the savings towards the cheapest Apple Watch, which is also now even cheaper. That would be tempting to some.

Charles: Although it is only a price cut on the Sport version, that's the one nearly everyone buys, so I think that will have a big impact. As for the bands, you're totally right: I just got a black Milanese band with magnetic clasp that looks to be identical to the one Apple just put out. The knock-off one: $12. The Apple one: $149 (if sold separately). Granted, Apple's is very likely to be a bit higher quality, but is it $130 higher quality? Not sure about that.

William: The $50 price cut, no question. This does feel like an inventory-clearing price cut, but either you're into swapping bands or you aren't. Mind you, I have a Nomad strap and adore it, despite being certain for so long that I wouldn't bother to change.
     
SierraDragon
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Mar 22, 2016, 10:55 AM
 
Thanks guys for your commentary. I have been building Filemaker business apps for decades, and am currently working at building the Mac/iPad/iPhone/Cloud databasing process into workable. What other knowledgeable folks think about product evolution is of substantial value to me.
     
   
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