“The business has become so large that this year we are going to replace the iPhone 5 and we are going to replace it with two new designs,” Apple chief Tim Cook announced on Tuesday at the company’s Silicon Valley headquarters.
Apple will begin taking orders on Friday, and on September 20 the two devices will go on sale in the United States, Australia, Britain, China, France, Germany, Japan and Singapore.
The iPhone 5C is part of Apple’s bid to counter the flood of low-cost smartphones from rivals, most of which use the Google Android operating system.
Apple designer Jony Ive said that despite the low cost, the polycarbonate iPhone 5C with a steel frame “is beautiful”.
“We took the same fanatical care with how the iPhone 5C feels in your hand,” Ive said.
The iPhone 5C with 16 gigabytes of memory will sell for as low as $99 with a US carrier contract – half the cost of earlier iPhone base models.
Analysts were keenly focused on the promise of an iPhone 5C to win over buyers in China and other developing markets.
“The 5C a no-compromise device,” Gartner analyst Van Baker said after trying out Apple’s new phones. “It is just in a plastic case instead of a metal case, and they basically reduce the price by the cost of materials.”
Baker estimated the price cut allowed by lower-cost materials at around $100. He noted that the “open question” was whether iPhone 5C would be priced attractively for emerging markets at what could turn out to be a $550 price tag without subsidies from telecom service providers.
The top-line iPhone 5S, which starts at $199 with a contract for US buyers, “is the most forward thinking phone we have ever created,” said Apple vice president Phil Schiller.
“It is the gold standard in smartphones.”
Schiller said the 5S model includes a speedier chip which brings up the computing power from 32 to 64 bits.
“It has over a billion transistors in it,” he said, adding that the device will be “about twice as fast in graphics and computing power and about 40 times faster than the original iPhone.”
The 5S will also have improved battery life, with some 10 hours of talk time, or 40 hours of music listening, Schiller added.
Apple introduced a fingerprint sensor for the iPhone 5S, as a new security measure in place of passwords.
“You can just press the home button to unlock your phone,” Schiller said. “You can use it to authenticate iTunes purchases.”
Schiller added: “We have so much of our personal data on these devices, and they are with us almost everyplace we go, so we have to protect them.” Reticle Research principle analyst Ross Rubin described Touch ID as a “show stealer” that addresses “a necessary annoyance that many consumers have to deal with many times a day.”
Apple also broadened its color palette, announcing the low-cost phone in blue, white, pink, yellow and green, and the top-line model in silver, gold and a new “space gray.”
Apple said its iOS 7 software will debut September 18. It includes a free iTunes Radio Service featuring more than 200 stations “and an incredible catalog of music from the iTunes Store,” Apple announced earlier this year.
The two new handsets keep the four-inch screen of current iPhones, despite some speculation Apple would boost the size to compete with larger phones from rivals like Samsung.
The smartphone market is now dominated by Android devices, with roughly three-fourths of all handsets, but a forecast by research firm IDC suggested Apple will increase its share this year to 17.9 per cent from 16.9 per cent. IDC analyst Ramon Llamas said that by introducing a lower-priced handset,
“Apple is staking out its space in the lower-cost smartphone category.” Llamas said Apple is seeking to fend off challenges from lower-priced devices while “it enjoys bigger profit margins and still maintains the aura of being an aspirational brand.”
The event was a disappointment to some who were looking for a fresh device from Apple, such as a smartwatch or TV service.
“I think there was an expectation for that ‘one more thing,'” said Roger Kay at Endpoint Technologies. “People were looking for some pizzazz and they didn’t get it.”
Apple announced separately a deal with Japan’s biggest mobile phone carrier NTT DoCoMo to bring the two new iPhones to that country.
“We’ve enjoyed tremendous success with iPhone in Japan, in fact it’s the top selling smartphone in the country, and we look forward to delivering iPhone into even more customers’ hands through NTT DoCoMo,” Cook said. AFP