Apple's iPhone 15 faces challenges in China
Apple is expected to release its latest iPhones on Tuesday, but the company faces challenges in China, its third-largest market. The Chinese government has expanded some restrictions on using iPhones, and Apple will also have to compete with Huawei, which was its top rival in China's premium smartphone market until U.S. export controls ruined Huawei's phone business in 2019.
The biggest change for most Apple customers will be a switch from Apple's proprietary "Lightning" charging cables to USB-C, a standard that Apple already uses on its laptops and some high-end iPads. Apple was forced into the change by European regulations, but analysts believe that the company will position the change as an upgrade, taking advantage of faster data speeds that can transfer high-quality videos made with iPhones.
Analysts are also expecting a new "periscope" camera technology that could give phones better zoom capabilities and titanium cases, as well as upgraded chips. Such "periscope" lenses can use mirrors or prisms to get a longer lens without having to make the camera module much larger.
The biggest question of the day will be whether Apple reserves those features for a new top-end device and makes smaller upgrades to its cheaper models.
"Just like we saw people who aren't Ultra athletes buy the Apple Watch Ultra, we're going to see a bunch of people buy this even if they aren't camera or photography enthusiasts, just because they like the latest and greatest," said Ben Bajarin, chief executive and principal analyst of Creative Strategies. "That by itself creates that buzz and momentum and allure to the top end."
Apple is expected to increase the average price per phone sold to boost its revenue, but the question is whether it does that by raising prices across the board or just on premium versions. The global smartphone market has slumped from shipping 294.5 million total phones to 268 million in the second quarter, but Apple's shipments declined the least of any major smartphone maker, dropping from 46.5 million phones to 45.3 million, according to data from Counterpoint Research.
"The truth of the matter is, we're in a very down smartphone market," said Bob O'Donnell, head of TECHnalysis Research.
O'Donnell said he will also be on the lookout for any hints about Apple's plans with what is known as generative artificial intelligence, the technology trend behind applications like OpenAI's ChatGPT and Microsoft's "Copilot" assistant technologies for its Office software.
Analysts have repeatedly prodded Apple about its plans for such technology but the company has given few hints so far, other than Chief Executive Tim Cook's comments in July that the company's secret work on the technology is driving up its research spending.
"Will Apple tease an advanced form of Siri? That would be something that would generate some excitement," O'Donnell said.
In addition to the new iPhones, Apple is also expected to release new iPads, Apple Watches, and AirPods at its event on Tuesday. The company is also rumored to be working on a new augmented reality headset, but it is not expected to be released this year.
Apple is facing a number of challenges in the smartphone market, but the company is still the world's most valuable listed company. The new iPhones will be critical to Apple's continued success, and the company will be hoping to wow consumers with new features and technologies.