Apple iPhones Five

As usual, the Apple management team did a great job in presenting their new products at yesterday’s keynote. As happened after the launch of the iPhone 4S two years ago, CNBC and others gave the company a lukewarm reaction saying there were no breakthroughs, but rather minor tweaks to what existed. Consistent with my view two years ago, I think the press is completely missing the significance of yesterday’s announcements. First, consider the iPhone 5C. For $99, you can buy the equivalent of a supercomputer in your favorite color complete with a suite of office, photographic, and movie tools and a highly sophisticated software system that a technically illiterate person can take out of the box and be productive with in minutes with an account at iCloud to keep all of your data and media synchronized and shareable (sorry for the long sentence). For $99. I consider that highly significant and predict that the numbers will delight investors.
The inclusion of iWork is also significant, from my point of view. The strategic bet that Apple is making is that these tools will accelerate the adoption of iOS devices for content creation, not just content consumption. For those who have used only desktop tools for many years, it may not seem natural to create spreadsheets and presentations with a mobile device. However, for people who were born after the World Wide Web, they will likely be uninhibited to adopt Apple’s vision. As people get hooked on the iWork tools and iCloud, they get hooked on buying more and more of Apple’s hardware.
The skeptics are saying that the iPhone 5S only has a few new features. That is true, but the features are significant, in my opinion. If you are a gamer, the new A7 processor and M7 coprocessor, which can collect motion data from the accelerometer, gyroscope, and compass of the iPhone. For the healthcare industry, I predict there will be many new applications that take advantage of the M7 coprocessor as a tool to measure adherence to protocols and activity levels of chronically ill patients.
The most significant new feature is Touch ID (see video), the Apple implementation of biometric authentication. This is something I have been writing about for almost 20 years and I am thrilled that it is finally happening. IBM had introduced a fingerprint reader on the ThinkPad many years ago and, although it was successful in the enterprise, it never caught on for consumers. If touch ID has been implemented in the normal Apple “it just works” manner, I think the feature will revolutionize mobile computing by providing not only a convenient way to protect and activate your device, but providing a way for secure e-commerce and e-health applications. If Apple opens up the application programming interface (API) for Touch ID, as I suspect they will, then it will be a blessing for banks, healthcare providers and insurers, airlines, and social media companies. I am sure the next iPad announcement will include Touch ID, making biometric authentication available to hundreds of millions of people around the world.
My only disappointment is that we have not yet seen an iPhone 6 with a larger form factor than the current models. I suspect we will see that within six months. I can’t wait, but in the meantime, I look forward to getting my hands on a 5S.