iPhone 14’s Success Will depend on One Surprising Factor

This story is part of iPhone 2022 Focal PointCNET’s collection of news, tips, and advice on Apple’s most popular products.

When Apple executives take to the stage at the company’s Steve Jobs Theater in California next week to show off the iPhone 14, as widely expected, you probably won’t see much of a change to the phone. Rumors suggest the notch where the selfie camera sits may be smaller, and Apple will likely tout a camera upgrade or the newly introduced always-on display technology. But the feature the company is betting on the most to attract customers is the one it introduced two years ago: 5G wireless.

Sure, for some, 5G is yesterday’s news. For others, it only numbers bigger than 4G that came before. But more and more, data is piling up showing that 5G wireless is becoming almost as important as today’s iPhones as battery life and storage, two features that people pay most attention to when buying their phones. The current wireless standard, which has been available for several years now from all major US carriers, is also the second most cited reason people told researchers at consulting Deloitte that they had switched cellular providers, behind “better value for money?.”

This is a far cry from how 5G felt at its launch and in the early years, when the service was activated with much fanfare but little actual coverage. But carriers have poured billions of dollars into infrastructure and the airwaves to back it up, which has resulted in better service in many places.

Apple CEO Tim Cook is one of the biggest drivers of 5G, citing it nearly every time he’s discussed the iPhone publicly since he first offered the technology with iPhone 12 in 2020. “5G has become acceleration,” he said in july when discussing future prospects for his company’s handsets, though rising inflation and recession looming. “I think there is reason to be optimistic.”

Read more: How to Watch iPhone 14, Apple Watch Series 8 Launch Event

Every year it seems ongoing test of iPhone popularity, and it will continue with good reason this year too. The iPhone is the company’s single most important product by almost any measure. Apple earned more than $191.97 billion in iPhone sales last year, which is more than half of its overall revenue. Much of iPhone technology has seeped into the rest of its business as well, with related products like the apple clock, AirPods headphones and iPad tablets become a billion dollar business in their own right.

It also helped push Apple’s value to more than $2.5 trillion, up from the $60.7 billion Wall Street valued before the device launched. first announced 15 years ago. Now, Apple is the most valuable company on the planet, followed by oil giant Saudi Aramco, Microsoft, Alphabet (Google), Amazon and electric car maker Tesla.

Big picture

Some 5, 10 and 20 dollar bills

The economy has been a major issue for many people since inflation started to rise rapidly last year.

James Martin/CNET

But this year, the success of the iPhone is not only a sales measure that adds to Apple’s profits. It will also set the tone for the larger economy, giving an idea of ​​whether people are willing to spend money at a time when our collective confidence in the economy has fallen. to its lowest point in decades. Businesses big and small have slowed down hiring or started laying off staff, such as Snap, the social network’s smaller competitor to Facebook, did last week.

But 5G, which has evaporated as much as it has in the tech industry, may be key to Apple’s success in navigating the deteriorating economy we all seem to be dealing with. Wedbush Securities estimates that about 240 million of the 1 billion iPhones used worldwide have not been upgraded in the last three and a half years and therefore do not run on 5G networks.

Owners of older iPhones will likely upgrade at some point, especially as wireless carriers pack perks like free subscription movie and TV service to attract people to upgrade. “The stickiness of the iPhone upgrade cycle is still being underestimated,” Wedbush analysts wrote in a message to investors earlier this summer. “This continues to be Apple’s unique advantage over other tech proponents.”

Dream a little 5G dream

Tim Cook announces Apple's first 5G iPhone

Although 5G wireless networks were available before Apple introduced its first 5G-capable iPhone in 2020, many see it as one of the most important launches for the service.

Apple

The odd aspect of the 5G upgrade cycle is perhaps when people buy — like, they don’t want to buy a new non-5G phone — 73% of Deloitte survey respondents said they wanted a “better understanding” of what 5G has to offer, and 30% said they are disappointed by the “lack of innovative applications and services that take advantage of 5G.”

When carriers started promoting 5G a few years ago, they were talking about the next generation of wireless technology that could usher in the future of new sci-fi devices. The promise of 5G appears everywhere, from self-driving car to remote medical care to smart city.

Read more: Everything We Know So far About the iPhone 14

So far, 5G has largely lived up to its promise of higher speed and increased reliabilitybut that’s it.

Carriers, meanwhile, have convinced people that 5G is needed in part by shutting down older 3G services, effectively prompting some to upgrade and indirectly telling 4G users that they will, eventually, be next.

Now, with economic uncertainty on the horizon, people should think more carefully about purchasing a device they may not be upgrading for a few years.

“If you’re going to buy a smartphone, you’re going to be buying the best you can at a given price point,” Maribel Lopez, longtime industry observer and head of Lopez Research. “People have to make serious choices when they see a 30% increase in the cost of food and a doubling in the price of gasoline.”

“No one, unless you need a precious phone, will buy a 4G phone today,” he added.

shiny apple

iphone 13 pro and iphone se on yellow background

Apple recorded the highest sales in profit after releasing the iPhone 13 last year.

Lexy Savvides/CNET

All of these trends don’t mean Apple’s iPhone is guaranteed to be a success, with or without economic catastrophes happening around the world.

To sweeten the introduction of the iPhone 14, the Apple team is working hard to offer a software update with it iOS 16 software updatelike the new “widgets” to add info to the lock screen, unsend in Mail and enhanced security.

They’re also rumored to be polishing new features like always-on display, which allows the iPhone to show limited information on the screen even when it’s normally turned off, and Emergency satellite SMSwhich can come in handy if you get stranded on a desert highway or in the middle of the ocean.

Read more: Every iPhone 14 Feature I’d Like to See at the Next Apple Event

To some, all of that might seem like an unnecessary feature just to have something new this year. But Creative Strategy analystCarolina Milanesi said Apple should be careful to introduce features that are important to first-time users and premium buyers, which are “important to brand perception.”

“You can’t let high-end users feel left out or forgotten,” he said. And for everyone else, he expected the operator to offer subsidies and other prizes to convince people that the real big change is the value they get from the phone.

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