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iPhone 6 Launch likely September 19

Jun 26 2014, 9:20am CDT | by

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iPhone 6 Launch likely September 19

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iPhone 6 Launch likely September 19

Reports out of China and Germany suggest that Apple will launch the iPhone 6 on Friday, September 19. Given the last two launches have occurred on the third Friday of September, that’s hardly shocking news. But this promises to be no ordinary iPhone launch and so the details have started to become more tantalizing as the date gets closer. Numerous accounts have both the 4.7-inch model and the 5.5-inch phablet entering production next month and Foxconn, Apple’s main manufacturer, is said to be hiring upwards of 100,000 people to make that happen.

Earlier reports had suggested that Apple was struggling with some unspecified issues related to the larger model, but in recent weeks those have passed and instead suggestions are emerging that the bigger-screen model will also be a flagship of sorts, sporting some unique features that are not on the smaller model. Keeping in mind that none of this is confirmed, it’s possible that the phablet will be the first iPhone to offer 128GB of storage and it may contain a better camera than the smaller model. Specifically, only the phablet might offer optical-image stabilization, which allows for sharper photos in low light conditions.

It’s important to note that the alleged reason for this is supply constraints on the part needed to offer stabilization, which explained why TouchID couldn’t come to the iPad last year as well. The phablet will sell in smaller numbers than the 4.7-inch iPhone as is common with other brands and will also be a function of production choices by Apple. Earlier, it was rumored that only the larger model would get a sapphire screen cover, but that now seems much less likely especially in light of comments made by Corning. (Corning has supplied the Gorilla Glass Apple used over its screens for years and its remarks suggested it was being replaced entirely.)

The Chinese report also suggested Apple is doing away with the 16GB iPhone for the newest models, instead moving to a 32GB and 64GB lineup. Such a move makes sense from a consumer and competitive standpoint. Apple has historically had a three-model lineup, but assuming it goes to two different screen sizes in an otherwise identical product, the proliferation of memory size options could lead to chaos in SKUs, especially if the phone continues to be offered in three colors. Apple had five different models (for different frequency bands) of the iPhone 5s in three colors and three memory sizes. That’s 45 unique SKUs. Even if it can consolidate the radios somewhat for the next generation iPhone, the challenge of maintaining even more models could be daunting, especially given that the 5s and/or 5c will likely remain in the lineup. (The 5c has at least 55 SKUs right now.)

It will cost Apple only about $5-6 to upgrade from 16GB to 32GB in the base models, but the company will likely see fewer upselling opportunities to the 64GB model than it did to the 32GB in the current generation. That upsell was probably the single most profitable line item on Apple’s entire P&L so losing it will hurt some. The good news for the company is that the phablet will likely command a higher price and entice some buyers to buy it instead of the smaller phone. While the bigger screen will cost Apple a bit more — as would any other extra features like image stabilization — the phablet should have a higher margin structure overall.

While Apple did increase the screen size slightly with the iPhone 5 in 2012 and did launch two phones last year, it’s safe to say the much larger screens of this year’s iPhones and the bigger separation between the models has led to a great deal of early excitement. A report from RBC earlier this week suggested interest in a big-screen iPhone was high enough that it could entice some switchers from the Android camp. The impact of that on Apple will be revisited in a future post. In the meantime, start thinking about whether the right iPhone for you is a more basic model or the jumbo phablet. It appears you could be holding one in less than 3 months.

Follow me on Twitter. Read the rest of my Forbes posts here.

 

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Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

 

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