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Notes From the iPhone Rumor Trail

By John P. Mello Jr. MacNewsWorld ECT News Network
Jul 19, 2013 5:00 AM PT

As rumors swirl about the next iPhone, the current models of Apple's popular smartphone may be selling better than expected.

Notes From the iPhone Rumor Trail

Sales of the iPhone for the quarter that ended June 30 will beat Wall Street expectations, according to a report released Wednesday by Morgan Stanley.

Some 29 million to 32 million units were sold during the period, 10-20 percent better than the 26.5 million units expected, according to the report authored by Katy Huberty, Jerry Liu and Scott Schmitz.

Those sales numbers will bump up revenue for the period, too, but only slightly, the report notes. Revenue will be north of US$36 billion, compared with expectations of $35.1 billion.

Samsung Stung

Those increased sales in what's typically considered a sluggish period even in the best of years may be coming at the expense of Apple's biggest competitor.

"All the numbers I've seen have suggested that Apple sales are stronger than people think," Yankee Group Research Director Carl Howe told MacNewsWorld.

Although numerous news reports have hailed Samsung's great strides in the U.S. market, he continued, "when you look at the numbers, you'll discover that it's losing ground against Apple."

Some of that lost ground can be attributed to the reaction of the market to Samsung's latest flagship smartphone, the Galaxy S4.

"After the S4 was launched, consumers realized that it was not that big an improvement over the S3, and the iPhone came back into focus for some people," Tim Bajarin, president of Creative Strategies, told MacNewsWorld.

"If the second quarter numbers are stronger, it probably occurred because more people were going for the iPhone instead of the Galaxy," he added.

Next iPhone Specs

There are those, however, who were skeptical of Morgan Stanley's rosy numbers for the second calendar quarter.

"I'd be surprised if earnings come in above expectations," Van L. Baker, research vice president for mobility with Gartner, told MacNewsWorld.

"Apple is struggling right now because they haven't had any new products for a while, and it's hard to get people excited about something if it's not new," he added.

In addition to the financial news about the current iPhone, some alleged specs for the next version of the smartphone were posted by Extreme Tech on Monday.

Although the next iPhone will look like the current model, it's expected to boast a 4.3-inch display (slightly bigger than the current 4-inch iPhone 5) with support for power sipping IGZO technology, 2 GB of RAM, and inclusion of NFC and a fingerprint scanner.

The new iPhone will probably have a faster dual-core processor -- a speed boost from 1.3 GHz to 1.6 GHz is predicted by ET -- and a quad-core graphic processor.

Power Miser Display

"You can almost absolutely expect a faster processor and more memory," Creative Strategy's Bajarin said. "It's part of the evolutionary process of Apple's update cycle."

Although more and more phone models are appearing in the market with quad-core processors, Apple may be wise sticking to its dual-core guns, maintained Michael Morgan, a mobile devices analyst with ABI Research.

"Apple sets the pace for improvements that are demanded, not there just to be different," he told MacNewsWorld. "Two cores are perfectly fine for processing. Four cores are still unproven as an absolute must-have for a device."

Sticking with a dual-core main processor and supporting IGZO display technology will help extend the battery life of the next iPhone, Morgan noted.

IGZO reduces the refresh cycle for the pixels in a display so it draws less power when it's on. "That can lead to some pretty good power savings," Morgan observed.

Launch Delays?

Whether it's the size of the display in the next iPhone or the technology going into it, something could be snagging the production schedule for the device.

Design changes in the display for the next iPhone could cause Apple to miss its expected September launch date and release the model later in the year, Bloomberg, citing a Taiwanese newspaper, reported Wednesday.

However, it's unlikely that Apple would let a part stand in the way of its product timing, opined a skeptical Howe.

"Volume and schedule are more important than a part," he said. "Q4 is important. Unlike Q2, there is a Christmas in Q4."

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