Despite efforts to diversify, Apple Inc. (AAPL) remains hugely dependant on the iPhone. New products like the Apple Watch and a revamped Apple TV represent a drop in the bucket compared to the sort of numbers a new iPhone typically brings in.
But coming off the first quarter since its 2007 launch in which iPhone sales have declined, more than ever AAPL needs the iPhone 7 to be a hit.
With the expected September release date creeping closer, here are three features the iPhone 7 must have if it’s going to convince people to upgrade and be the big seller Apple needs.
Features the iPhone 7 Must Have: A Better Camera
The iPhone helped to kick off the smartphone-as-a-camera movement, and Apple has come to dominate traditional camera makers when it comes to posting photos online. Check Yahoo! Inc.’s (YHOO) Flickr photo sharing site, and various iPhone models top the popularity list.
However, with the iPhone 6s, Apple’s lead in smartphone camera superiority slipped. It’s not that the iPhone 6s didn’t have a good camera, but beyond bumping the resolution, AAPL didn’t do much in the way of improvement over the previous generation.
Arch-rival Samsung (SSNLF), on the other hand, completely redesigned the camera it put in the Galaxy S7. It has a wider aperture and larger pixels than the iPhone’s (resulting in better low-light shooting) and in tests, Samsung’s new dual-pixel sensor allowed it to focus on subjects three to four times faster than the iPhone’s camera.
The camera is one of the iPhone’s signature features, so there are bragging rights at stake. And more importantly, a dramatically improved camera — not just a bump in resolution — is one of those key features that could convince current owners to upgrade to a new iPhone.
Features the iPhone 7 Must Have: More Storage
Apple has offered 16GB as the base storage in its smartphones since the iPhone 5 was released in 2012. Since that time, new iPhones have come with higher resolution cameras, gained 4K video capability, adopted higher resolution displays and the iOS — the operating system that powers the devices — has grown in size. All of these factors eat into storage space. Photos require more storage, 4K video requires dramatically more storage and apps are using up more space.
Apple has stubbornly kept the base storage of the iPhone at 16GB, pointing to features like iCloud storage and Apple Music streaming as options to reduce the amount of storage required locally.
In reality, the decision seemed more business-based. With Flash memory an inexpensive commodity, AAPL was reportedly making an extra $88 in profit every time a new iPhone buyer decided 16GB was too little and spent the $100 extra to upgrade to the next level of storage capacity.
With the iPhone 7, Apple needs to accept reality and boost the storage capacity of its base model to at least 32GB. The Galaxy S7 comes with 32GB standard, Alphabet Inc’s (GOOG, GOOGL) Google Nexus 6P comes with 32GB and the LG G5 has 32GB. In fact, 16GB of storage is pretty much found only in budget smartphones these days … and the Apple iPhone.
Besides the fact that it looks terrible in comparison charts, the iPhone 7 needs to move up from 16GB of storage or Apple is going to face a backlash from consumers who are fed up with juggling apps, music and videos due to chronic storage issues.
Features the iPhone 7 Must Have: Water Resistance
One tentpole feature that AAPL appears to have been working toward is a waterproof — or at least water-resistant — iPhone.
Water damage is one of the big causes for iPhone damage, and it’s also one of the leading causes of expensive iPhone repairs. And when you think about it, this makes sense. It’s not just the risk of accidentally spilling a drink on your smartphone — when we carry these things everywhere, all the time, and use them constantly, they’re going to get exposed to the elements.
The issue of water damage is common enough that Apple puts liquid contact indicators in its iPhones and won’t honor the warranty if it decides there has been water damage.
In contrast, the Galaxy S7 is rated as IP68 water and dust resistant. It can be used in the rain, mud can simply be wiped off and it will even survive a 30-minute dunk in five feet of water. All of these scenarios could result in a costly repair bill with an iPhone.
Apple began quietly experimenting with design changes starting with the iPhone 6 that have improved water resistance, but releasing an iPhone 7 that was actually rated as water-resistant would be a big enough feature that many holdouts would upgrade from their older iPhones. And it’s about time iPhone users could text, take a call or snap a photo outdoors without worrying that rain could brick their device.
Of course there are plenty of other features high on the wish list of iPhone fans — a higher resolution, OLED display is one of the big ones. But the reality is a massive overhaul in technology like that doesn’t seem to be in the cards for this generation. With Apple reportedly moving to a three-year refresh cycle for all-new iPhone releases, it’s more likely the iPhone 8 in 2017 will be on the receiving end of the dramatic redesign and major technological leaps.
But even though it looks as though the form factor won’t be changing any from the iPhone 6 and iPhone 6s, the iPhone 7 needs compelling new capabilities like the three features I’ve listed, or AAPL is going to have a long, rough year.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.
