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8/13/2013
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Apple iPhone 5S Faces Tough Rivals

Apple iPhone 5S will arrive in a market that has spent this year showing consumers how inventive and thoughtful smartphones can be. Will Apple offer enough wow?

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Apple is expected to debut the iPhone 5S on Sept. 10. If the company follows the pattern it has set for the last six years, the 5S will be an incremental update to the iPhone 5. The iPhone 5S will have the same screen and the same body as the iPhone 5, but will boast improved internal components. Given the current state of competition in the smartphone market, minor under-the-hood changes might not be enough to recharge the public's interest in Apple's smartphone.

What about the iPhone 5S will be improved? First, the processor. Apple's A7 chip is pegged to provide computing power for the 5S. The camera might be bumped from the 5's 8-megapixel imager to a 12- or 13-megapixel sensor. The camera might also have a wider-angle lens and improved flash. The device's battery will be slightly bigger, providing an 8% boost in power. The iPhone 5S will ship with iOS 7. iOS 7 represents a major step forward for the iPhone, but it still lags what the competition is doing in software.

The one possible feature providing any sort of "wow" might be the presence of a fingerprint scanner built into the home button, although how it will be used with the device is still a mystery. The fingerprint scanner might be used to unlock the device, provide authentication for mobile purchases, or other similar functions.

Beyond these updates, however, the iPhone 5S will not have anything particularly innovative on board -- and that might be a problem for Apple.

[ Where does Microsoft's smartphone stand in the fray? Read Windows Phone 8 Seizes On iPhone Dry Spell. ]

Apple's competitors have made it a point to innovate with each new generation of device. Some, such as Samsung, have been more successful in their efforts than others. The pace of competitive innovation has picked up enough that Apple's board of directors has put Apple CEO Tim Cook on notice to speed things up. Though the board's warning comes far too late to affect the iPhone 5S -- and probably the next-gen iPad and iPad Mini -- their words should have an effect on Apple products that reach the market next year.

Samsung's Galaxy S4 is a good example of smartphone innovation in recent months. Though the hardware was an incremental update to the previous-generation smartphone, Samsung went overboard with the new device’s software and applications. It debuted a wide range of new and interesting camera features, such as the ability to take pictures and video with both the front- and rear-facing cameras at the same time. This lets the owner include him or herself in the shot. The camera can also be used to create GIFs, create unique action scenes, and even edit out unwanted people from a final photo.

LG followed in Samsung's footsteps a bit with its recently announced G2 smartphone, and it also offers some interesting and unique software features. The innovations include things such as Answer Me, Text Link and Slide Aside. Answer Me will answer calls automatically when the G2 is picked up and placed next to an ear. Text Link will scan text messages for content such as event invites and automatically populate the calendar with appointments, if you wish. Slide Aside is LG's take on multitasking and lets you page through open apps quickly.

Motorola, too, has been innovating. The Moto X includes Touchless Control, which puts Apple's Siri to shame. It is always listening for voice commands and can be used to perform a wide variety of tasks on the Moto X. Motorola also added a unique twisting motion to the Moto X that can be used to automatically open the camera without pressing any buttons. Last, Motorola is going to allow customers to custom order their Moto X with different colored external parts to make them unique.

Nokia has redefined the notion of what a camera phone should be with the 41-megapixel Lumia 1020. Nokia's hardware innovations are paired with impressive new camera software that lets 1020 owners take full control over every aspect of the device's camera. The result is one of the best phone cameras to hit the market.

The Apple iPhone 5S will arrive in a market that has spent an entire year showing consumers how inventive and thoughtful smartphones can be. Consumers might no longer be interested in minor spec bumps. Many want to be impressed. It's not clear that the iPhone 5S can make the impression needed.

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Cara Latham
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Cara Latham,
User Rank: Apprentice
8/14/2013 | 9:41:42 PM
re: Apple iPhone 5S Faces Tough Rivals
What will sell the 5S is that it is the latest Apple product. People, at least for the time being, will want to upgrade because of the brand reputation.
Thomas Claburn
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Thomas Claburn,
User Rank: Author
8/14/2013 | 8:15:21 PM
re: Apple iPhone 5S Faces Tough Rivals
The fingerprint scanner is interesting, but I suspect it will be more of a convenience than a security measure, unless Apple takes the unlikely step of burning the fingerprint hash into write-once memory to permanently establish ownership of a device.
TMagrini850
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TMagrini850,
User Rank: Strategist
8/14/2013 | 5:26:57 PM
re: Apple iPhone 5S Faces Tough Rivals
The iPhone 5S will still by the best smartphone on the market for the sole reason it doesn't run Android.
Michael Endler
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Michael Endler,
User Rank: Author
8/13/2013 | 9:22:27 PM
re: Apple iPhone 5S Faces Tough Rivals
Interesting. Some analyst was estimating today that Apple will get 40% margins off the iPhone 5C, which is actually better than the company is doing now, without any "budget" options. The problem for Apple, the analyst said, is that premium markets are pretty mature, so growth has involved more user gravitating toward older iPhone models, which are sold at discount, and from which Apple doesn't make as much hardware profit.

If the 40% figure is accurate, and if the iPhone 5S is the top premium smartphone option (like the iPhone 5 has been), Apple should come out of the holiday season looking good. Not good enough to threaten Android's market share, but good enough to gain back some of what it's lost, and to fight off Samsung for the smartphone industry's title of most profitable player.

But if people are unimpressed by iOS 7 and/or the iPhone 5S's incremental upgrades, gains from the iPhone 5C could be negated by lower-than-expected 5S sales. I don't expect that to happen, but as the article points out, it's definitely possible.
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