iPhone 11, so embarrassing!

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Apple CEO Tim Cook

The 2019 iPhone is coming soon, and while the new iPhone may have a new number in its name, make no mistake: this is just another "S" year for Apple phones.

At 1 a.m. on Wednesday, Apple will unveil its next-generation iPhone series at the Steve Jobs Theater. If the rumors are true, the new iPhone will use the same design for the third consecutive year. Apple is expected to release three new iPhone models: iPhone 11, 11 Max/11 Pro and 11R, replacing last year's iPhone XS, XS Max and XR. Apple may also update its iPad and Mac product lines, release new AirPods, HomePod and other products, and announce the launch time and pricing of its streaming service.

However, the new iPhone is still the most concerned product and the one that contributes the most revenue to Apple. The 2019 iPhone is likely to be equipped with a faster processor, the latest iOS operating system, new exterior colors such as green and purple, support reverse wireless function, charge AirPods on the back of the phone (Samsung Galaxy S10 already supports this), and improve the face recognition system Face ID.

Camera is the biggest feature

People familiar with the matter said that the biggest change this year will be the addition of a third camera on the back of the Pro model and a second camera on the R model to improve low-light shooting capabilities. Apple fans are unlikely to see a major breakthrough in the design or functionality of the new iPhone.

These expected updates certainly haven’t cheered Wall Street up. Some analysts and investors are even predicting that the upcoming iPhones will be boring. In contrast, Apple’s rivals are significantly upgrading their phone designs, such as the Samsung Galaxy Note10, which is almost equipped with a true full-screen display, and the OnePlus 7 Pro, which uses a pop-up camera.

"Apple is falling further behind many of its competitors in overall innovation, even at a time when the smartphone industry as a whole is slowing down," said Bob O'Donnell, an analyst at market research firm Technalysis. "That makes it hard to get people excited about the new iPhone."

Dan Morgan, senior portfolio manager for technology at Synovus Trust, believes Apple is treading water and just trying to keep its iPhone business afloat. Apple is one of Synovus Trust's largest holdings. However, he is optimistic that this year's iPhone will have enough new features to boost sales of this very mature product and "keep the train moving."

This "make do" attitude also highlights the challenges Apple has faced since it released the first iPhone in 2007. The iPhone contributes more than half of Apple's revenue. On the one hand, Apple has to maintain this core product, and on the other hand, it has to reduce its dependence on it, which is very awkward.

Struggles before 5G

If consumers want to buy a phone now that will last for a few years, they'll probably want to buy a 5G phone. 5G networks are just beginning to be deployed, but by the end of next year, 5G networks will be common. In addition to the iPhone, mainstream Android phones should add 5G support in the next few months.

Apple is also developing a 5G iPhone, but it lags behind its rivals, mainly because it has been involved in a patent war with chip supplier Qualcomm. The two companies reached a settlement in April, clearing the way for Apple to use Qualcomm modems in its iPhones again in the future. But for this year's iPhones, the settlement came too late, preventing them from using 5G modems.

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Ming-Chi Kuo, a well-known analyst at Tianfeng International Securities, released a report saying that next year's three new iPhones will all support 5G and will undergo major changes in design. The screen sizes will be 6.7 inches, 5.4 inches, and 6.1 inches respectively, all equipped with OLED screens. There will also be a special version for China that only supports the sub-6GHz frequency band.

Neil Mawston, an analyst at market research firm Strategy Analytics, believes that Apple is now in waiting mode, welcoming the "next wave of upgrades" triggered by the 5G version of the iPhone in 2020. "Until then, the iPhone will continue to struggle and lose market share to Samsung and Huawei," he said.

Foldable iPhone, is there one?

In addition to 5G, Samsung and Huawei have developed foldable phones. Their phones have encountered their own problems: Samsung delayed the launch of the Galaxy Fold by five months to fix the screen problem; Huawei's Mate X was originally scheduled to be released this summer, but it has not been launched yet. However, foldable phones are expected to become regular phones eventually, and even low-cost phone manufacturers such as TCL are developing foldable phones.

So far, Apple has not shown any foldable screen products, but it is likely developing them in the lab. Apple will perfect its products before releasing them, even if it is months or even years behind its competitors. However, if Apple delays too long on foldable phones or 5G phones, it will give competitors the opportunity to define what the future of mobile phones will look like.

An annual survey of 8,000 smartphone users worldwide conducted by UBS in May showed that Apple's recent iPhone upgrades, such as facial recognition technology, have not resonated with some users. In their view, Apple's products lack uniqueness and aggressiveness compared with past years. Many consumers have extended their phone upgrade cycle and are not attracted by Apple to upgrade to the new iPhone, which sells for an average of $949.

Apple needs to sell enough iPhones next year to avoid a repeat of the disappointing sales of the iPhone XR and XS launched in September, which forced Apple to cut its earnings outlook in January for the first time in more than 15 years.

Watches and headphones have become Apple's new growth drivers

Trading firm Susquehanna International Group said Apple is expected to sell about 70 million new iPhones by the end of this year, nearly 30% less than the peak of 98 million in 2014.

Moderate expectations for Apple's iPhone sales in 2019 have the company looking ahead to 2020, when it will release its first 5G iPhones.

Post-iPhone Era

Apple's transition from iPhone to post-iPhone era will be injected with new momentum in the coming weeks. In addition to the iPhone, Apple will also release the fifth-generation Apple Watch this week. Analysts expect the new watch to come with a new case, improved battery life, and further separation from the iPhone through a comprehensive app store. It is also expected to add more health features, including a sleep tracking mode.

These features will allow Apple to move further into the health field, which Apple CEO Tim Cook has said will redefine the company. The fourth-generation Apple Watch, released in 2018, is equipped with electrodes and sensors that can generate an electrocardiogram to detect possible dangerous abnormalities.

Strategy Analytics said health features have helped Apple increase watch shipments to 5.7 million in the latest quarter, up 50% year-on-year. In the first three quarters of this fiscal year, sales of smartwatches drove a 35% increase in revenue for Apple's wearables and accessories business, which also includes AirPods, to nearly $18 billion.

Apple will also officially launch its subscription services for TV shows and games, the latter of which was announced in March. Analysts say Apple will announce the pricing and launch time of its TV+ and Arcade gaming services as early as this week.

Mawston of Strategy Analytics said that the combination of wearable products and services will be the key for Apple to survive the iPhone era. The last mobile phone giant Nokia also tried to complete a similar transition, but struggled. (Author/Xiao Yu)