Can Apple get away with another “S” iPhone?

There have been many rumors this year about what upgrades Apple will include in its anticipated annual iPhone refresh. Most agree Apple will move to release two iPhones, but there is some debate about what those phones will be.

Rumor has it that Apple is working on a low-cost iPhone that will do away with the current iPhone design and instead use a new plastic case with a curved back similar to previous iPods. Despite being a less expensive device, that could make things even trickier for Apple to impress with an iPhone 5S upgrade that is largely expected to retain the “old” design of the currently shipping iPhone 5. The devices from competitors are making things even more difficult for Apple’s expected “S” upgrade. Rumors of a 4.8-inch iPhone prototype that recently surfaced don’t seem likely for the next iPhone, but that hasn’t stopped mainstream media and analysts from reporting that Apple is losing out on iPhone sales as consumers opt for larger screen devices. However, that might now be the case, at least not in the United States, with Strategy Analytics and NPD estimating Apple beat Samsung to become the No.1 phone vendor in Q4 2012. Will consumers want or expect a larger screen on the next iPhone, or will Apple’s usual minor refresh suffice?

What did past S upgrades have?

Looking at past “S” iPhones, Apple typically includes a few major upgrades: a faster processor, improved camera, and new software features that usually take advantage of the faster CPU. The iPhone 3GS included a better 3-megapixel camera with autofocus and video recording, as well as a faster processor and new apps like voice control, a built-in compass, and VoiceOver. The iPhone 4S included a new dual-core A5 chip, an updated 8-megapixel camera and, on the app side, Siri. This is a good way to gauge the most likely new features of the iPhone 5S, but will just an “S” upgrade be enough to combat the increasingly enticing 5-inch Android-powered competition? Historically, Apple has kept the same physical design as the previous generation iPhone when introducing an “S” upgrade. However, one way Apple could change that pattern is with the introduction of multiple colors for the iPhone as it has done with iPod products.

Colors- We’ve heard predictions for a long time that Apple could introduce iPhones in colors other than black and white, and analysts have recently predicted it is coming with the iPhone 5S. Apple already has its new line of aluminum iPod touch in multiple colors, and it would certainly be one of the standout features to attract users if the 5S is lacking an innovative new software feature like Siri on the 4S. The image to the right comes from AnoStyle—a company that’s getting a lot of attention for its anodization process that permanently changes the color of iPhones. AnoStyle’s $249 price tag has been a hurdle for some, but there is certainly a demand for iPhones in multiple colors (as witnessed with Apple’s iPod lineups).

Software features- One way Apple could make the 5S upgrade an attractive offering is by including software features exclusive to the device. Apple has done this in the past. For example, making voice control and video recording features exclusive to the iPhone 3GS, as well as Siri on the iPhone 4S. iOS 7 is coming at some point in the second half of this year, and, on top of the usual long list of new features, most are hoping it includes a redesign of some of Apple’s aging stock apps. However, which of those features could Apple make exclusive to the iPhone 5S? Apps and features that might require upgraded hardware, such as a fingerprint sensor, NFC, and a faster CPU, are likely candidates.

Offline Siri– One big feature Apple could introduce that would take advantage of the expected faster CPU is an offline mode for Siri. Apple’s still in beta service currently requires users to connect to Apple’s servers to do tasks. This has been a frustration for users who just want to use dictation, control music, launch apps, or place calls without an Internet connection. Apple could take advantage of a faster CPU to bring some of the processing for certain Siri and dictation features locally to the device to allow for offline use. Many users have noticed some of these features, such as offline dictation, are already available on Android devices. Offline mode could also increase response time for Siri—something that’s noticeably behind Google’s Now service.

NFC- Some analysts said Apple would finally include an NFC chip in the iPhone 5S. It’s certainly not the first time we’ve heard rumors of NFC, as Apple seemed to be toying with the idea in the past, but Android manufacturers are increasingly highlighting NFC-based payments, content sharing, and wireless charging as flagship features of most high-end Android devices. If Apple brought NFC capabilities to PassBook, and possibly even decided to process payments with the hundreds of millions of credit cards connected to iTunes accounts, it could have a serious Google Wallet competitor.

Fingerprint sensor- Apple last year acquired Authentec, a company that owns patents related to fingerprint sensors and related technology, so it’s only natural that we heard rumors of the iPhone 5S potentially including a fingerprint sensor. There have been some Android devices to add fingerprint sensors for security features, like the Motorola Atrix, so an iPhone with a fingerprint sensor and apps that go beyond simply unlocking the device could definitely be the 5S’s big exclusive feature. At CES 2013, we saw a company called Validity that showed off its under-glass fingerprint sensors for smartphones on Android devices (as pictured above). The technology worked well. It can be implemented into buttons as well as under glass, and it could serve as an authentication solution for payments, etc.

Camera-Another obvious upgrade Apple will likely make in its 5S upgrade is the camera. Earlier reports claimed Apple would bump up the current 8-megapixel camera in the iPhone 5 to one of Sony’s 13-megapixel camera sensors and include a larger, improved rear flash. With many of the new high-end Android devices packing in 12- and 13-megapixel cameras, any camera upgrades will probably be a big focus for Apple when it announces the 5S. I’d also expect new software camera features to appear. Android 4.2 introduced an impressive 360-degree Photos Sphere feature, and BlackBerry showed off the rewind technology it grabbed from Scalado in addition to Instagram-like filters for the BB10 launch earlier this week. Apple’s panorama mode and camera app isn’t exactly looking as impressive as it did when iOS 6 launched last year. Another possibility for the camera, even though it’s a long shot, is a dedicated hardware shutter button. While the volume button lets you snap a photo when the camera app is open, it would be much quicker to be able to instantly snap a photo with a press of a button from anywhere. Although not likely based on past patterns, Apple could bump up the specs on the 1.2-megapixel FaceTime camera to support 1080p video recording. This would also be ideal for FaceTime over cellular.

http://www.youtube.com/watch?feature=player_embedded&v=0poff-mHQ4Q

Memory- An upgrade in storage wouldn’t be that surprising given Apple has used past S upgrades to do the same. The 3GS replaced 8GB and 16GB models with 16GB and 32GB, while the 4S was accompanied by the introduction of a 64GB model. With Apple’s recently announced 128GB iPad, it wouldn’t be too shocking if the next-generation iPhone got the same upgrade.

When will it launch? Again, if Apple sticks to the same schedule as release cycles in recent years, we’d likely see the iPhone 5S in the fall. Apple has moved its iPhone releases to fall with the 4S in October 2011 and iPhone 5 in September 2012. However, there are rumors this year of a possible spring/early summer refresh. Several analysts claimed Apple would begin production of the 5S in March for a June or July launch. In theory, that would make room for a major refresh in October or September—roughly a year after the iPhone 5. That would of course mean Apple would break tradition and move to a bi-yearly release cycle, but it still doesn’t account for the rumored low-cost iPhone. If Apple does launch a new iPhone in spring, it could also mean that the launch of the device on T-Mobile becomes a major part of the announcement.

If history is any indication, a fall release seems likely for the iPhone 5S. If Apple sticks to its previous release patterns, the current iPhone 5 would see a price drop. It could also be modified slightly, if rumors of a low-cost iPhone are true. In other words, the current iPhone 5 would become Apple’s lower priced iPhone, while the iPhone 5S would get the $199 entry pricing like every new iPhone before it. This would be the obvious scenario if Apple doesn’t decide to make any major changes to its release cycles. The question is: What will Apple have to include in the device to impress consumers with another “S” iPhone?