by InteractiveAdvisors
by InteractiveAdvisors
Outlook

Smart speculation on the iPhone 5 and next-gen iPad (Nasdaq: AAPL)

by |Published

By Marco Arment

I’ve read a bunch of rumors about upcoming iPhone and iPad releases. The most credible and sensible rumors indicate:

  • There will be a new iPhone released in September.
  • iOS 5 will be released at the same event.

These are both so plausible and backed up by so many writers’ anonymous sources that they’re not really worth arguing about. I’ll assume for the rest of this post that these are true.

Recently, we’ve also heard:

  • The next iPhone will have a nearly identical appearance to the iPhone 4, but with a faster CPU and a better camera, similar to the upgrade from the iPhone 3G to the 3GS.
  • The next iPhone will not be so similar to the iPhone 4, but will have a new case design that’s significantly thinner and lighter.
  • The update will actually be two iPhone models.
  • The update will include a significantly less expensive model to better compete in lower-priced market segments.
  • An updated iPad will also be released at this event, similar to the iPad 2 but with a 2048×1536 “Retina” display.

(As usual, we’ve also heard other crazy rumors that I think are too far-fetched to discuss.)

Usually, the credible-sounding rumors (especially when published by major publications such as Bloomberg and The Wall Street Journal) are based in truth, but have often been distorted or misinterpreted along the way.

We also know:

  • The white iPhone 4 has only been sold for about 5 months. I bet this supports the rumor of the “4S”-type iPhone update that’s very similar to the iPhone 4. If Apple were planning for the iPhone 4’s design to only last one year, they probably would have just cancelled the white one after all of its delays, rather than continue to invest heavily in its design and manufacture even after the market had largely forgotten about it.
  • Demand for the iPad 2 is still extremely strong. Most Apple stores still don’t have a wide variety of iPad 2 models in stock reliably, and online shipping delays have only this week fallen below 7 days. This, I think, might indicate that an iPad update so soon is premature.

I’ve heard nothing first-hand, but based on the rumors, past behaviors, and a healthy dose of baseless imagination, here’s my own speculation:

  • The rumored iPhone 4-like model could be the next flagship iPhone with an A5-class CPU, an updated camera, and possibly other minor improvements.
  • The rumored thinner, lighter iPhone could be the very-low-priced model, closer to the iPod Touch in appearance and component quality, with lower specs, less storage, and an unsubsidized price of around $300.To satisfy the low-price requirement, they might also just continue to sell the 3GS at an even-lower cost. I think this is less likely: they can probably achieve lower costs and higher manufacturing volumes by designing a new model specifically to achieve those goals, rather than simply selling a previous year’s flagship model at a lower cost.

    I do not believe that they’ll change the screen size to conserve cost or physical size. A screen-size change would incur too large of a cost in software and the app ecosystem.

  • There probably won’t be a new iPad this fall. It’s just too soon, and Apple is still having trouble keeping up with demand for the iPad 2. (I’d love to be proven wrong on this, since the bulk of Instapaper’s business is on the iPad and I’d love using a Retina iPad, but it just doesn’t seem very likely.)There would also be a lot of inventory issues: Apple already ships 18 different iPad 2 models, which is part of the reason they’re so hard to get reliably in stores. (You can usually get an iPad 2, but not necessarily the one you want.) A Retina iPad added mid-cycle to the lineup would probably be an additional product, not a replacement to the current iPad 2, multiplying the number of stocked iPads even further and making the supply chain even more complex.

We’ll see what happens. I’m wrong a lot with Apple predictions.

Photo: Jorge Quinteros

Covestor models that hold AAPL as of 7/11/11:

AUTHOR

Mick Weinstein
Mick Weinstein
Mick is the Head of Editorial for Covestor, a financial journalist and online content specialist. Prior to joining Covestor, Mick was for five years the Editor in Chief and VP Content at stock market analysis website Seeking Alpha, where he built the editorial function as the site attracted over 3.5 million unique monthly visitors and developed an innovative platform for intelligent stock market discussion. Mick is a graduate of the University of Michigan, Ann Arbor.

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