Closed Apple unveils its next iPhones: as it happened

It’s the biggest day in the Apple calendar: the iPhone launch. This year, for the first time, Apple unveiled two new smartphones: the upgraded 5S, with a 64-bit chip and fingerprint scanner, and the all-new 5C, with plastic casing in a handful of colours. Tim Bradshaw was at Apple’s Cupertino headquarters and April Dembosky reported from San Francisco.

Francisco Jeronimo, mobile analyst at IDC, has these thoughts on the crucial price question.

On one hand developed markets are entering the second wave of smartphone adopters driven by those users who don’t need a smartphone, but will get one because that’s the only option they will see in the stores. However they will not buy the latest and greatest smartphone because they don’t see value for money. Price will be key to attract these first time smartphone adopters who may be keen to upgrade in the future when they understand the value of such a smart device.

On the other hand emerging markets represent a massive opportunity as they outperform the rest of the world, but again price is key to attract those who cannot afford a high-end device. So the spotlight is on the price, materials and experience of the 5C

Ben Bajarin, industry analyst at Creative Strategies, had these thoughts as we prepare to go into the event:

It seems like everything has come out already. The fingerprint sensor leaked in packaging shots. The biggest question is price. But I don’t think they will say on stage what the unsubsidised cost will be.

The 5C will be aggressively priced, but the question is what happens to the 5 in the new lineup? I’m anticipating 5S, 5C and 4S will stay around, and the 5 will be discontinued.

Pan Kwan Yuk at the FT’s Beyond Brics blog says the big Apple news this week is not new hardware but whether it finally strikes a distribution deal with China Mobile:

If it comes, a deal would represent a major game changer for Apple, which has seen its share of the smartphone market in China eroded by the likes of Samsung and local manufacturers – including Xiaomi, a three-year-old start-up with a $10bn valuation.

With more than 745m subscribers, or nearly two-thirds of the country’s 1.19bn mobile accounts, China Mobile is the 800lb gorilla in the world’s largest smartphone market.

Read the rest of her post here

Apple’s share price fell about 1 per cent when markets opened on Tuesday and has since been hovering just above $500 ahead of the launch.

Brett T. Robinson, marketing professor at the University of Notre Dame, compared Apple launch events to religious gathering, but says that they’ve been losing their lustre without the company’s beloved guru.

There used to be something liturgical about Apple product launches. The mystery surrounding the new products, the communion of followers in rapt expectation, the clerical Steve Jobs preaching to the assembled masses.

But, he says, the romanticism around Apple has dissipated as the company’s market share has been squeezed by a slew of new smartphone makers. And the company is struggling to come up with a new magical narrative around its products “to inspire those not yet baptized in the Apple way.”

Apple’s best storyteller has passed on and the accountants and designers have been left to cobble together the next chapter.

Holding factoid: the music playing before the event begins is by Fitz & the Tantrums.

Tim Cook takes to the stage. He gives a special welcome to the people who are watching in Beijing, Tokyo and Berlin.

He’s started off by talking about the iTunes Festival in London. 20m people applied for the free tickets, it says. “It’s like an opening weekend for product,” he says, dressed in black untucked shirt and jeans – the same uniform he’s worn at recent events.

Right now we are enjoying a highlights reel of the iTunes music festival. The stage setup here in Apple headquarters is boilerplate Apple – all black.

Next month Apple will ship the 700 millionth iOS device, Tim Cook just announced.

Here comes Craig Federighi, star of the WWDC show in June, to talk about iOS 7. Hundreds of millions of people will unveil it “overnight”, he says.

The icons have new icons and a “precisely chosen” colour palette, he says. Craig is talking about the swipe-up control panel and swipe-down notification centre. It’s not flat, he says, it’s all about layers.

The edge-to-edge design of the iOS 7 weather app is touted as a benchmark for what third-party apps are going to look like. “The controls just fade away,” he says.
Siri can now search for the latest tweets and has a new voice. Siri can now draw on info from Wikipedia, inline web search and photo search, he says.
There are also new ringtones.
“You may miss a call due to your dancing but that’s OK, we have new sounds for voicemail as well,” he says.

Now we’re talking about photos. They are automatically grouped by moments and those moments are pulled together into a related collection. Swipe back again for a year view. Hold down your finger over the mosaic of tiny photos to bring it to the fore.
He’s also talking about Airdrop, the new way to share photos peer-to-peer from one iPhone to another, over Bluetooth.
So far this is all just recap of what was announced at WWDC.

iOS 7 will be available on September 18th for the iPhone 4 and later, iPad 2 and later, iOS 7 and latest iPod touch. Some had speculated that the iPad upgrade might be held back until next month.

Tim Cook is on stage talking about Apple’s own apps, such as iWork, iPhoto and iMovie. All five of these apps will be free from now on, he announces, with any new iOS device. This is a clear play against Microsoft Office, which has been slow to land on the iPad.

“Now I’d like to talk about iPhone. A couple of you may have been expecting this,” says Mr Cook. Here we go…

“In the past we’ve lowered the price of the older iPhone, making it more accessible to new people. This year we’re not going to do that. This year, the business has been so large, that this year we’re going to replace the iPhone 5, with not one but two new designs. This allows us to serve even more customers.”

Phil Schiller is here to talk about the iPhone 5C: it has an incredible new design that’s more fun and more colourful than any iPhone. “A few of you may have seen some shots on the web, and that’s cool – everyone is really excited about it, but you haven’t really seen it before.” Now we are seeing a video unveiling…

The entire rear is made from a single mould and the front is a single piece of glass. You won’t see any seams, says Phil. He’s eulogising about an “entire experience of colour” from the new iOS 7 and the 5C. Also: new rubberised cases with circular cutout patterns, contrasting the colours of the 5C and its case.

There are five colours of iPhone 5C and six cases. It supports more LTE bands than “any other smartphone in the world”, Phil says. Blue white pink yellow and green. starts with 16GB – priced at $99

The iPhone 5C is simpler, more essential, more capable and certainly more colourful than the iPhone 5, says Sir Jonathan Ive, Apple’s design chief, in a video, He’s talking about hardware and software working in harmony and “blurring the boundaries” between the two. It’s “beautifully, unapologetically plastic”, he says.

The iPhone 5C keeps the “sense of quality and integrity that’s synonymous with the iPhone”, says Jony – no compromise. It has a clear lacquer hardcoat to have a durable and glossy surface, with a “solid dense feel that you would not expect from a plastic product”.

The matte silicon of the case is an “intentional contrast” to the glossy hard finish of the iPhone, says Jony, offering dozens of colourful combinations. It runs an A6 chip and has 8MP camera, and an “impressive” battery life. There’s a new front-facing FaceTime HD camera for better calls – “and self portraits”, says the Apple voiceover.

iOS 7′s wallpaper will be colour matched to the hardware.
“It’s quite remarkable when something feels familiar yet it’s new at the same time. It’s the vivid realisation of hardware and software together in one device,” says Jony.

The second new iPhone today is the 5S – “the most forward thinking phone we’ve ever created,” says Phil Schiller.

We’re seeing a video of molten gold – looks like those rumours of a gold iPhone were true…

“It is the gold standard in smartphones,” says Schiller – now in silver, gold and “space grey”.

Apple is claiming another industry first: the iPhone 5S will come with a 64-bit A7 chip, with “desktop class architecture”, which uses a more efficient Arm instruction set. It has over 1bn transistors in it.

It’s backward compatible with 32-bit apps. The A7 is up to twice as fast as the previous generation, says Schiller, with a hockey-sticking chart of how the iPhone’s chips have improved since the beginning. “Half of that improvement is coming today,” he says, enabling breakthroughs in performance for “graphic intense games”. (Someone behind me just cheered gently.)

Demo time: here comes Epic Games’ co-founder Donald Mustard, maker of the Infinity Blade games.

It took just two hours to convert the game to 64-bit, the app developer says.

Meanwhile, Apple investors don’t seem too sure what to make of the announcement yet: the stock is around 0.5% lower.

There’s a new part in the iPhone: the M7, that works alongside the A7 – a “motion co-processor”, says Schiller, which takes advantage of the sensors such as accelerometer, gyroscope and compass. That will enable new kinds of health and fitness apps, he says. A new “CoreMotion” API will let developers get to this data.
I wonder if such a chip as the M7 would come in handy if, say, Apple were developing its own health-monitoring wearable device…

5S battery life: equal or greater than the iPhone 5. 10 hours of 3G talk time, 250 hours of standby.

The 5S camera is a “DSLR-level image”, says Schiller, It takes multiple photos in the background and picks the best. A new dual-LED flash will tune the right kind of colour flash to match the room it’s photographing.

More new camera features: slow motion video and rapid-fire still shots. HD video at 720p at 120fps.

“The third feature is all about security,” says Phil. Here comes the fingerprint reader?

About half of smartphone customers don’t use a passcode, and they “really really should”, says Phil. So Apple brings you Touch ID, a touch capacitive sensor that reads your fingerprint in very high resolution – 500 pixels per inch, through to the inner live layer. This is the technology Apple bought last year with AuthenTec.

Touch ID can be used to get into the phone and to make iTunes purchases, rather than having to enter a cumbersome password. The button is made of sapphire crystal – this could help with durability, as the home button is said to be the single largest point of faults and failures in iPhones.

David Webber, managing director of Intelligent Environments, a financial services software provider, says the addition of a fingerprint scanner in the new iPhone will make 40 per cent of UK consumers more likely to access their bank accounts via smartphones, according to his company’s research.

This development will trigger a biometric banking revolution, which spells the death of the password as we know it…The new iPhone will do for passwords what iTunes did for CDs. It won’t be long before the majority of mobile devices incorporate biometric authentication and with banks keen to ensure the highest levels of security for their customers, it will be interesting to see which bank will be the first to integrate it into its mobile banking apps.”

However, some authentication experts disagree. Thomas Bostrom Jorgensen, chief executive of Encap, a Norway-based authentication software developer, says a fingerprint sensor is neither a game changer, nor a silver bullet:

Fingerprint sensors, and other biometric authentication methods such as eye vein scans and face recognition, may allow us to feel as though we are in a Blade Runner-like sci-fi future – but they are not on their own the best way to authenticate people. Their strength is also their biggest flaw – while a password or PIN can be changed, fingerprints are not easily switched if they are hacked. Hacking a fingerprint may sound as if it’s only possible through rather gruesome means, but it is very possible to steal fingerprints through more social methods – lifting a print from a discarded coffee cup is no more science fiction than the fingerprint scanner itself.

“We believe technology is at its very best, and at its most empowering, when it simply disappears,” says Jony Ive in a video about Touch ID. (Will he ever appear on stage in person?)

The new iPhones will go on sale on September 20th in major markets, including Japan with new carrier DoCoMo and in China, ahead of its usual delayed launch date.

The iPhone 4S will remain Apple’s entry-level product, offered free with a contract.

Tim Cook is back on stage, showing an amusing new multilingual ad.

“Our friend Elvis Costello” is the musical conclusion to this morning’s event. “How you all doing?” he says. “Wow that’s a lot of fancy stuff,” he says to the crowd of bloggers. “I feel underdressed.” He’s singing “What’s so funny about peace, love and understanding?”

Carolina Milanesi, Gartner’s vice president of research, reflects on today’s announcements for the FT:

With the 5c, Apple remains true to its core of delivering quality by keeping specs the same as the 5 and adding plastic for the casing. Even with plastic they went for a quality look vs extra savings that a thinner plastic panel would have given them. Having retired the 5 and adding the 5s, they give a choice to those users looking to upgrade from the 4s.

More details on UK pricing from Apple’s PR team:

iPhone 5s comes in gold, silver or Space Grey, and will be available in the UK for a suggested retail price of £549 (£457.50 ex VAT) for the 16GB model and £629 (£524.17 ex VAT) for the 32GB model and £709 (£590.83 ex VAT) for the 64GB model.

iPhone 5c comes in blue, green, pink, yellow and white and will be available in the UK for a suggested retail price of £469 (£390.83 ex VAT) for the 16GB model and £549 (£457.50 ex VAT) for the 32GB model.

A new iPhone 4S 8GB model will also be available for £349 (£290.83 ex VAT)

Apple’s share price has wavered through the announcements, from its opening price of $506.17 and a low of $498.50 just now. The stock is down 1.4 per cent for the day, suggesting Apple investors were perhaps hoping for more aggressive pricing on the iPhone 5c.

That’s 5s with a lowercase s and 5c with a lowercase c, according to Apple’s press releases, in case you were wondering.

Elvis has left the building… well the stage at least. Tim Cook invites us in to try out the new devices, which we will shortly do. Stay tuned…

The unlocked price for the iPhone 5C is $549 according to its online store. That’s a lot higher than most people had expected, I think – most Wall Street reports I saw came in at around $450.

Cheeky bit of Twitter marketing from Nokia…

Motorola Mobility has paid to have promoted tweets like this appear at the top of Twitter search results for “iPhone” throughout the launch event:

Forrester Research analyst Charles Golvin comments on the price:

With its new product lineup Apple reinforces its conviction that customers will pay a premium for the Apple experience. Their ability to control every aspect of the ecosystem, from OS to hardware to apps — including the free inclusion of iWork, iPhoto, and iMovie — unites into a product experience that they believed warrants their premium pricing versus its competitors.

Frank Gillet from Forrester examines the implications of the productivity tools:

Five free mobile apps is a move against Microsoft, who refuses to put Office on iOS, beyond a token iPhone app. And it is a move against Google. It’s a big deal that you now get 5 free productivity and creative apps with your Apple mobile device, plus free access to iWork web apps on iCloud. The trick will be to get people using them – can it be painless to move most Office docs into iWork apps?

Todd Anglin, an HTML5 expert from Telerik, which makes tools for app developers, says the iOS software changes create an opportunity for developers as consumers look for new versions of their favourite apps:

A mini gold rush may occur as developers hope to ride the wave of interest in new iOS 7 ready apps. Some developers, who have for years been largely forced to give away iOS app updates for free, are using the major iOS 7 transition to introduce new versions of their apps that must be re-purchased. Their hope is that consumers familiar with the pre-iOS 7 version of their app will be willing to pay again for an updated iOS 7 variant.

Matthew Knight, head of innovation at Carat, a global media agency, said the launch event lacked any surprises, and that the company was playing catch-up with competitors when it comes to new technology, especially around the camera features:

Apple launches over the years have lost their interest for me. From standout innovation leaps forward in smartphone technology, product design and interaction design, devices now feel like iterative steps, which don’t have clear and obvious consumer benefits.

Wall Street analysts are starting to weigh in – Scott Kessler, analyst at S&P Capital IQ opines:

We think the 5s will solidify AAPL’s leadership on the high end, and the 5c will lead AAPL to improved market share.