Apple Blurs The Lines Of Hardware and Software with iPhone14 Pro

September 8, 2022 / Carolina Milanesi

This week, we were back in person at Apple Park for the traditional September iPhone launch. This year three products were on stage: iPhone14, Apple Watch and AirPods Pro. From the opening, Tim Cook made it clear why these products take the stage together, and their updates hit the market at the same time: “On their own, each is industry-leading. Together they provide a magical experience.” And he is absolutely right. Apple has been focusing on bringing these devices closer together so that users see the value of one device blur into the other. Maybe to this point, the new AirPods Pro can now be charged with an Apple Watch charger. 

Addressing Real Pain-points

Across the portfolio, Apple has focused on addressing real pain-points consumers have been feeling, which turn into purchase drivers when handled correctly, from battery life to personal safety. Our dependence on these devices means we always want to use them more. So it is no surprise that longer battery was a common feature across the three product families. Apple is addressing battery through a more efficient iPhone processor and a new Low Power Mode on Apple Watch. This new mode maintains key features such as Fall Detection and Activity but turns off others like always on display and automatic workout detection. 

Another real pain point addressed with the new AirPods Pro is finding a lost AirPod or a case, something that happens almost daily in our home. Now a microphone on the case allows users to hear the beep of the case being pinged by Find My more clearly. Find My also allows one to find individual AirPods Pro and the case itself. Adding the Memoji engraving on the AirPods Pro case helps homes with multiple users quickly distinguish their case without having to open it and try to pair it with their iPhone. 

While not a pain point per se, safety is something that is always top of mind for consumers and, of course, something that, as we start going back into the world after more than two years of limited mobility and travel, is very much timely. Apple delivered two new features to iPhone14: Crash Detection and Satellite. The first is pretty much self-explanatory. The second, which allows users to send SOS messages to emergency services as well as quick updates to the family via Find My when out of cellular coverage, shows the power of Apple to deliver a solution that crosses hardware, software and infrastructure in a way that provides value right away and is scalable. Hard not to think that both new features can be used in the future for Apple Car. Or that they could have come out of the work that Apple has been doing for the car. A purchase driver that will get consumers to pick an iPhone 14 over another phone? Not on its own, but consumers have proven time and time again that peace of mind is a strong value add.

Sales Opportunity

So if Satellite is not going to be a big purchase and upgrade drive, what is? There are two things, in my view, that will drive iPhone sales for Apple into 2023.

First, the iPhone14 Plus. As much as the iPhone 13 Mini addressed the need some users had for a smaller model and a lower price tag, the sales volume it offered was limited. With the iPhone 14 Plus, Apple has a much larger addressable market of users who want the larger display but not necessarily all the bells and whistles of the Pro Max model or its price point. 

The second is the new Dynamic Island on iPhone14 Pro. As much as I wish Apple found another name for it, this new feature, which uses the notch to display contextual information to users, makes the iPhone14 Pro feel pretty different. While Apple might not have wanted to drive attention to the highly contested notch by calling it Smart Notch, that is really what it is, and it solves a couple of problems. One, it uses the notch space in a more elegant and valuable way. Two, it helps with both notifications and multitasking by letting you see the information you need from one app while using another. For instance, the ability to see a timer or have music controls a tap away while doing your emails. 

I have seen some comments comparing Dynamic Island to the Touch Bar Apple put on the MacBook in 2016, and I think the comparison is off. The most significant difference is that the Dynamic Island has no learning curve for the user. The second and maybe more critical point is that the Dynamic Island is part of the UI, so users will see it seamlessly come to life daily. 

A Camera for the Pro 

Apple seems to continue to push features for pros, not necessarily edge use cases. The focus was on big pain points like low light and doing more with the phone itself without needing accessories such as a gimbal. But we did not get the ultra zoom that other manufacturers have, and the one update I was hoping for, to be honest. Instead, Apple showed how details are retained thanks to the 2x telephoto option on the iPhone14 Pro, as shown in the picture below. 

Adding the first 48MPx camera to the iPhone 14 Pro will certainly catch people’s attention. Now that the iPhone 14 is in the lineup, the Pro is clearly associated with a pro camera experience. 

Economic Context

It is hard to talk about any new gadget without framing its opportunity within the current economic context. 

First, let me reiterate that overall, Apple has the largest proportion of higher-end users within its ecosystem. This means that these users are less likely to feel extreme economic pressure. Second, we all know how critical mobile phones are in our everyday life, and we have seen the mobile segment ride previous economic recessions with limited impact.

For the iPhone14 family, Apple has kept prices in US Dollars the same as in 2021, which is a good thing, given we have seen other consumer electronics manufacturer increase their prices due to currency of supply chain. More importantly, though, is that the rebates for trade-ins offered both by Apple and the US Carriers are quite aggressive. These rebates might sweeten the deal for consumers on the fence about a possible upgrade, especially from an iPhone 13 or 12. 

Focusing on actual pain points, safety and privacy makes for a much easier pitch than adding technology for the sake of technology. This is true no matter what the economic environment is like but particularly true when money is tight. 

Apple is also keeping previous models in the lineup as always, including the iPhone SE starting at $429, giving more options for users who are either new to iPhone or have much older models. 

Finally, the assurance of regular software updates that deliver more value to users and improve their experience also makes the iPhone an easier investment to make, especially when you want your money to go further. 

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