Yesterday, in
part one of this two-part series, we took a look at two leading rumors that are founding on rather simple guesses -- that Apple will likely update its MacBook line of products -- specifically the MacBook Air, which is in sore need of an upgrade to Retina screens, and might follow the path of the Retina MacBook with a USB-C/Thunderbolt 3 port, new keyboard and Force Touch trackpad in a much thinner form factor. Today, we tackle the loudest but most ill-defined of the current rumors -- that Apple is making a
new four-inch iPhone, and that a
fifth-generation Apple TV will debut next year.
In Part One, we discussed the idea of Apple removing the headphone jack off some of its products over time, specifically off next fall's "iPhone 7." Why would Apple do this? Several reasons: pure digital sound with no conversion, the vastly-improved Bluetooth 4.x that offers better range, better sound, and much less latency than before; that a Lightning or Bluetooth-based system leaves open the possibility of thinner devices, or perhaps that it would save battery life compared to the analog 3.5mm jack. Before we even get to the iPhone 7, however, there's now a lot of speculation around an "iPhone 6c," which would regress to the iPhone 5 family's four-inch screen size.
Current rumors from China-based sites like
TechWeb claim that this new "hybrid" iPhone -- which would certainly borrow technologies, chips, and looks from the various iPhone 5s and 5c models -- will be announced in January and hit stores in February. Its main external features would be a similar colorful range of styles like the iPhone 5c offered, a four-inch screen size like the very popular iPhone 5s, and Touch ID support again like the iPhone 5s, but it would not, according to rumors, offer the 3D Touch found on the latest iPhone 6s line.
KGI Securities analyst Ming-Chi Kuo, who has a mixed track record on predictions (often correct generally but frequently misses on the specifics), made a case for the "iPhone 6c" in a note to investors, describing it as a sort of upgraded iPhone 5s. He noted that Apple is likely to ship 15-17 million iPhone 5s or 5c iPhones by the end of this year, meaning that some consumers are still opting for them rather than the slightly-larger iPhone 6 or 6s, and rejecting the 5.5-inch iPhone 6 Plus or 6s Plus as "too big" for their needs. Elsewhere, four-inch screens from other companies continue to do reasonably well outside the "premium smartphone" market segment.
Ming-Chi essentially echoes what other pundits have said, that this is the $400-$500 "budget iPhone" everyone expected the iPhone 5c to be, and thus we get to the real reason for this rumor: analysts who believe Apple will be unable to do better in developing markets (despite evidence to the contrary) without a "cheap" iPhone model that isn't a hand-me-down older version. Even though the proposed "6c" sounds like a collection of parts and features from older iPhones, it would technically be a new product and thus might attract more buyers (Ming-Chi claims up to nine percent of new iPhone buyers would go for the "6c") or new buyers who want an iPhone but can't afford the premium models.
Another argument to be made for a third new iPhone model would be to have yet more models available that would support Apple Pay. With Apple selling at least 50 million or so of the iPhone 5s, iPhone 6 and 6 Plus, and the iPhone 6s and 6s Plus each quarter, to us this doesn't seem like where the problem lies: plenty of owners around the world have Touch ID now -- the issue with Apple Pay has been with the banks (clearly identified as the issue with acceptance of the system in Canada, China, and Australia) and merchants (the biggest handicap in the US -- merchants are years behind the rest of the world in NFC- and contactless-card-compatible point of sale terminals). The foot-dragging of US banks in issuing EMV (chip-and-PIN) and contactless credit and badged debit cards is also part of the problem in the US.
Other details of the "6c" that have circulated in the rumor mill have it featuring the A9 chip (we think this very unlikely -- the cheaper A8 can handle all the features), a metal casing with anodized color options (some rumors have it keeping the metal-reinforced plastic backing of the iPhone 5c), and the same camera the iPhone 5s used -- the Sony 8MP rear camera and the 1.2MP Facetime camera. Oh, and "2.5D cover glass," whatever that is. Would Apple sell a whole bunch of such a "new" iPhone at $150-$250 off the present 6s models? Certainly they would -- just as they are likely to sell a reasonable number of still-available "new" iPhone 5s models as they are currently doing.
The psychology of a "new" FrankenPhone made up entirely of bits of previous iPhone models, particularly if offered at significantly cheaper prices, might do well in developing markets, or it might replace the now two-year-old (and based on a three-year-old design) iPhone 5s outright, bringing what Apple thinks of as the best features of both the 5s and the 5c (the latter of which was actually much more successful and popular than people think it was) into one unit. There's certainly an argument to be made for such something "new" that reminds consumers of the low-cost option, but our problem with this is that it wouldn't be, apart from color options and Apple Pay, materially different than what's on offer now: Apple still sells the iPhone 5s (alongside last year's iPhone 6 and 6 Plus).
Further, Apple currently sells the 16GB iPhone 5s (in either white or black) unlocked for $450 and the 32GB version for $500 (or $0-$50 on contract) -- the price range Ming-Chi said the "budget" iPhone 6s would cost. If the "developing markets" need a cheaper iPhone with a four-inch screen in order to get more people into the eco-system, Apple already sells one.
If they added Apple Pay compatibility to a "rev. a" version of the iPhone 5s, that would be more than sufficient to spur some customers who wanted the four-inch screen to get one. Otherwise, throwing a bunch of recycled old parts in a new case and claiming it is a "new iPhone" is not really Apple's way of doing things (unlike some ...), and would only attract the kind of easily-fooled buyers that Apple has never been interested in.
On top of this, the same KGI note from Ming-Chi claims that the iPhone 6s will turn out to be a flop compared to the iPhone 6, claiming that orders for shipments have dropped 30 to 40 percent ... during the holiday quarter. Right, sure. That's credible. He also claims that the iPhone 7 will enter mass production next quarter ("the second quarter of fiscal 2016"), so frankly as this story has largely emanated from him and his "sources," we're frankly a little skeptical and think his crystal ball has gotten a little cloudy.
Could Apple produce an updated iPhone 5s (preferably with Apple Pay compatibility) in the hopes of goosing sales in developing markets? Sure. Are we getting an "iPhone 6c?" That seems a little less likely to us, but we're not closing the door on it entirely. It's only that the iPhone 5c sold far better than most people think it did that keeps that possibility from being dismissed entirely.
Fifth-generation Apple TV already on the way?
This one won't take as much time to dissect, because it's so fuzzy and ill-defined. A report originating from
DigiTimes (long-time readers will know that means "take it with a whole shaker of salt") claims that Apple is already in the process of ramping up manufacturing of a newer, fifth-generation model of Apple TV, which will enter mass production in the first quarter of 2016 for likely launch in the summer or fall. This is despite the fact that the new fourth-generation model is just barely in stores -- there aren't even any figures yet on how well it's selling (though we hear from readers that it's doing pretty well).
The "new new" Apple TV will reportedly have an unspecified new CPU (replacing the A8 in the fourth-gen one) that will "dramatically improve the device's hardware performance" that current owners aren't complaining about, and will feature a new "heat dissipation solution" in order to handle the increased heat from the faster CPU. It will also gain "new functions" that aren't spelled out, but presumably those over and above the still-forthcoming new functions -- such as Siri control of Apple Music -- that are already planned for future software releases for the current fourth-generation Apple TV.
We may surprise you here -- particularly given the source -- but while we think the report as
DigiTimes wrote it is mostly bunk, there is a possibility of it being based on early Apple prototyping. Prior to the fourth-gen Apple TV coming out, there were strong and well-supported rumors of Apple trying to do deals with leading content providers to arrange something in the way of more content for the Apple TV -- a sort of "a la carte" or bundled subscription package of channel-app options that would be offered directly from Apple, rather than requiring that you have a cable subscription.
That didn't come to be -- at least, not so far -- but remains an option that is likely to happen in the future. There is also the fact that the present Apple TV doesn't support 4K video (though the A8 chip could do so, but there are other issues with that). Further, the tvOS and its App Store are presently in their nascent stages, with plenty of expansion planned for the future. So that is three areas where a future, beefier Apple TV could be well-positioned to take advantage of big changes in the TV market, at least two of which the current Apple TV is not quite set up for.
Given Apple's strong history of "playing the long game" and planning well ahead for industry upheaval, we think it very likely that Apple has been thinking about what the next-generation Apple TV would look like and the features it would have, and could even be in the prototyping stage by now, particularly if there's been some movement on that robust package of no-cable-required channel apps.
Do we think there will be a new Apple TV next year? No. Two or three years from now? That seems much more likely, and there is also the possibility of a "tweaked" fourth-gen with more capacity and let's say the A8X in it should the 4K market go totally mainstream in the near future. We certainly feel that Apple has plans for however the winds turn in that industry, and does a lot of "just in case" prototyping of all kinds of ideas, most of which never see the light of day.
At $150 and $200 for the present fourth-generation models -- a huge price increase from the third-gen model -- Apple is very unlikely to render that hardware old-hat in less than a year's time unless there is a compelling reason why it has to, and we don't see that. That said, we think it likely they are preparing for a future where the Apple TV is even more important to its users than it presently is -- and if you don't own one, ask anyone who does what they think of the one they have. Despite the advocacy of CEO Tim Cook, it remains one of Apple's best-kept secrets, and one of the products people who own one absolutely adore.
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