A couple weeks ago I ran this post on whether Apple might be aiming to launch the iPhone 6 around WWDC. It got some great engagement and interesting views, but it became evident that I could have more clearly distinguished between articulating the market conditions in favour of an early release, versus the more speculative exploration of what Apple is actually doing.
So I thought I'd have another go at it, in more concise terms, whilst also incorporating a few related developments from the past few weeks.
Market Conditions: Why 2014 is different from years past, and why Apple has a strong interest in launching the iPhone 6 sooner than September
- Go big, go fast: Apple has evidently been persuaded of the need to introduce a larger screen iPhone in order to retain the lucrative high end. The longer it takes them to deliver on that, the longer they give their competition a "free run".
- Look to the East: Related to the above - Apple has been very open about the importance of Asia (and China, in particular) to future growth. As discussed on Stratechery, these markets particularly favour bigger screen devices. December's China Mobile deal puts this in sharper focus and adds urgency - with a new available market of 700m subscribers predominantly favouring a bigger handset, Apple will now want to deliver fast.
- Cutting your losses: One can debate endlessly whether the 5c qualifies as a success (I personally think it's ace) but by any measure Apple's post-5s line-up has not quite played out the way they expected. In spite of their stellar results overall, Apple must feel that this is a (rare) misstep and that they are leaving something on the table. A rejiggered line-up seems in order. Whether this involves discontinuing the 5c, or pushing it down to the lower tier, the sooner the better.
- Clear your diary: September is a nice launch window. But compressing everything into just a few weeks does compromise the amount of publicity and focus you can give to each product individually. This has been manageable for the past few years of iterative upgrades to existing products, which require limited "pitching". But Apple has already acknowledged that it will be entering new product categories in 2014. Delivering the iPhone 6 in the summer provides breathing space to focus all attention and education on the iWatch and/or new Apple TV in the autumn.
Reading the Runes: Do the leaks/rumours regarding production and manufacture suggest that Apple can and will deliver before September?
- Blue-lit sapphires: There is compelling evidence that Apple is adopting sapphire displays for the iPhone 6. Like TouchID for the 5S, the sapphire panel seems a likely culprit for any potential supply constraints, and so production on this component will heavily dictate when Apple can launch the iPhone 6. Apple pushed very aggressively to start production by the end of Feb and is now operating at a capacity of 100m-200m 5" iPhone displays per year. This means they'll have at least 33m displays ready by the end of June (probably more like 50m-60m) with at least 8.3m more per month thereafter. Compare these numbers against historic launch weekends: when the 5s launched, the combined sales of 5s, 5c and 4s across the opening weekend was 9m, levelling to around 50m total iPhones in Q1 2014. Even if 5s accounted for 100% of those sales (which it obviously did not...) it seems that there will be ample sapphire ready in time for a July launch.
- Speed demon: Rumour has it that TMSC has already started production of the A8 chipset that will presumably accompany the new iPhone. This is several months ahead of the production schedule adopted in previous years for the A6 and A7, again indicating an accelerated cycle.
- Hiring on all cylinders: The WSJ is reporting that Apple is hiring up "hundreds of engineers and supply-chain managers" in China and Taiwan as it prepares to "release products more quickly and more frequently". Whilst this could relate to any product in Apple's line-up, the fact that many of them seem to be hires from HTC indicates that they are likely to be applied to the iPhone production process.
It seems to me that current market conditions strongly incentivise Apple to launch before September. As to whether they can launch sooner - well, even if one takes the rumours with an appropriate pinch of salt, there seems to be plenty to suggest that this is the plan. Of course, we'll never know definitively until Tim Cook walks on stage, but it seems hard to be completely dismissive about the idea.
Over to you...
What do you think? Does Apple have strong motivations for a summer launch? And if so, do you agree with my assessment of the rumours and leaks?