That Nikkei report claiming that Apple is moving to a three-year cycle on major iPhone refreshes would be huge news if true.
Apple currently has a very well-established ‘tick-tock’ cycle where we see a new form-factor every two years, and new features within the same casing on alternate years. That’s a very efficient approach: Apple generates new demand each year without having the pressure to design a whole new model each time.
Some will upgrade every single year; others will be more influenced by design, and buy in ‘tick’ years; others will be more concerned about features, and will buy in ‘tock’ years. The result is that every year, you have a bunch of customers eager to buy.
A switch to a three-year cycle would seem a dangerous one – so could it really be true, or is something else going on … ?
Nikkei doesn’t present any particular evidence for the headline claim – at least, nothing new. But pretty much every report out there tells the same story, one heard first from KGI last month: that the new iPhone is going to be much like the old iPhone. All subsequent reports have supported this idea, at least for the smaller model.
We’re expecting some changes, of course. Both models seem set to drop the headphone socket. The antenna banding seems likely to be less obtrusive. The 4.7-inch model might get the optical image stabilization currently limited to the 5.5-inch one, and the 5.5-inch model looks set to get a more sophisticated dual-camera setup.
There will likely be other enhancements we don’t yet know about, but all the claimed sketches, renders and photos seem to show that, yep, the design of the iPhone 7 looks extremely similar to the design of the existing 6 and 6s. It could be argued that all the evidence points to the fact that Apple is already working on a three-year update cycle, at least this time around.
Nikkei suggests two reasons Apple might want to transition to 3-year cycles. First, it says that ‘smartphone functions [have] little room left for major enhancements.’ Second, that as we grow ever closer to global saturation point, the market has slowed. The implication is that Apple would slow its development to match.
So, let’s examine these in turn.
There’s no doubt that the pace of technological change in smartphones has slowed. The kind of changes we’ve seen of late are much more evolutionary than they are revolutionary. But that’s a very long way short of arguing that there’s ‘little room left for major enhancements.’ That, it seems to me, is as absurd as the the entirely apocryphal quote attributed to U.S. Patent Office commissioner Charles Duell that ‘everything that can be invented has been invented.’
There are plenty of exciting technological developments to come. Whether it’s flexible screens, 5G, massively more sophisticated intelligent assistants or things that haven’t even be hinted at yet, the tech race will continue apace.
You could make a more persuasive argument for saying that there is less scope for major form-factor changes. All flagship handsets look broadly similar these days. Thin casings, large screens, premium materials, few physical buttons and so on. That would be a more logical reason for Apple to switch to a three-year cycle on design changes.
But even on the form-factor side, it’s not like there’s nothing on the horizon between the iPhone 6 and a future holographic iPhone. Incorporating the Home button and Touch ID sensor into the screen seems only a matter of time, and probably not much time. Beyond that, embedding the front-facing camera into the screen also is something that will come at some stage. Couple that with the flexible displays that already exist and entirely bezel-free phones become possible.
So I don’t think we’re done yet on design.
Nikkei‘s second argument is that the market is sluggish as we approach saturation point. But that isn’t a reason for Apple to ease off on development. On the contrary, if there are fewer brand new customers to sell to, Apple has to work harder to persuade existing Android smartphone users to switch to iPhone. It doesn’t need less development, it needs more.
However, I have to admit that Nikkei does have some evidence on its side. From everything we believe we know today, the iPhone 7 does seem to be looking much more like a second ‘tock’ year that it is a new ‘tick’ one. But that is evidence for what Apple may be doing this year. It is not evidence of a permanent move from a tick-tock strategy to a tick-tock-tock one.
So what could be going on?
I can see only one reason why Apple would opt for a modest refresh this time around: that it is holding back tech for a major revamp next year. Rather than give us some enhancements this year and some next, it wants to blow us away next year.
We’ve heard various murmurs about this. The iPhone launched in 2007, so some are suggesting that 2017 would be a logical year for Apple to do something dramatic in the form of a 10th anniversary edition.
Just as an illustrative example – not a prediction – suppose that it was able to embed Touch ID into the screen this year but couldn’t embed the front-facing camera until next year. It could give us a reduced bezel this year and then virtually no bezel next year, or it could retain almost the existing design this year and then give us a totally new look next year with maximum ‘wow’ factor.
The argument against this would be that investors would be extremely unimpressed this year. But Apple has a history of doing its own thing without pandering too much to the stock market.
And it wouldn’t necessarily be a disaster in sales terms. If you look at iPhone sales per year, there’s really not enough data to show that ‘tock’ years generate fewer sales than ‘tick’ years. Sure, sales took a hammering this time around, but I’ve covered the reasons for that. The underlying pattern prior to that was of continued growth, whether that year’s iPhone was a main model or an S one.
So I do think Apple could get away with a second ‘tock’ year as a one-off. Include enough new features to satisfy techies, and enough of a visual refresh that it is clearly ‘the new iPhone’ to satisfy those who buy more on design than tech, and it could do the job – and pave the way for something truly special next year.
There is one remaining question: if this year’s iPhone is really a ‘tock’ model, what will Apple do about the name? We’ve all been assuming it will be called the iPhone 7 because, well, what else would Apple call it? But if the design doesn’t really justify a full number upgrade, maybe Apple has something else in mind?
Again, the company is not above defying expectations there either. The new 4-inch iPhone was initially expected to be called the iPhone 6c before our own Mark Gurman revealed that Apple was considering 5se before settling on the iPhone SE.
My own theory, then, is that this year is a one-off to allow for a spectacular upgrade next year. Do you agree? Do you think instead that Nikkei is right about a permanent move to a 3-year cycle? Or are you still hoping for a major refresh this year? As ever, please take our poll and share your views in the comments.