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Apple Needs a New Category to Reinvent

The new iPhones suggest Apple’s ability to innovate is waning. Can it find a new category of gadget to reshape?
September 10, 2013

As Apple pulled back the curtain on two new iPhones with only incremental improvements on Tuesday, it became clear that the company is losing its ability to impress.

Apple created the current culture of product unveilings and updates as big-deal events. Changes big and bitty were met with wonder. Past iPhones earned headlines with both blockbuster features like the arrival of voice-responsive personal assistant Siri and smaller ones such as the arrival of a cut-and-paste feature (I was one of those spreading the word.) By comparison, the latest release feels much more subdued.

This time around, two new models were introduced: a lower-priced, plastic version called the iPhone 5C ($99 or $199, depending on storage capacity, with a two-year wireless contract) and a more familiar-looking metallic version called the iPhone 5S ($199 or $399, depending on storage capacity, with a two-year contract). The most notable changes brought to the 5C are the updated version of Apple’s iOS software and a selection of bright colors, from pink to green. The 5S is available in a new gold color, as well as the conventional silver and black (“space gray” in Apple-speak), and brings a few new features. They include home button able to read fingerprints so as to unlock the phone and aid iTunes purchases, a faster processor, and an always-on motion-sensing coprocessor. Both will be available in the U.S. and several other countries starting September 20.

It’s not clear if the iPhone 5S will be priced in line with competing Android smartphones in emerging markets like China. The prices listed for the U.S., at least, are in line with how Apple reduces the prices of older iPhone models each time it introduces a new one. 

I wouldn’t say I’m falling asleep here, but I’m definitely not jumping out of my chair.

The popular desire for ever-better iPhones, and Apple’s love for playing to that crowd, is partly to blame. Before Apple launched the first iPhone in 2007, the smartphone space was ripe for disruption. That device challenged competitors by offering a simple design without a hardware keyboard that relied on an impressively responsive touchscreen and simple operating system, iOS.

Most of us didn’t have smartphones in those days, and the ones on store shelves weren’t very slick. Now, most of us already have or are buying smartphones. Changes that used to seem like a big deal—ever-faster processors, more pristine displays, speedier wireless capabilities, additional types of security—are expected. That’s what you get when you buy any decent smartphone from any manufacturer.

I first felt that last year, when Apple released the iPhone 5. It was a great-looking phone, but there weren’t that many more obvious places to go innovation-wise. Now the the iPhone 5C and 5S confirm that suspicion. For example, Motorola previously trotted out fingerprint recognition and an always-sensing capability. The former was on its Atrix smartphone in 2011, while the latter, which picks up voice commands, was included in the recently released Moto X (see “Review: Motorola’s Moto X”). Apple touted improvements to its camera, as well, but it doesn’t look nearly as impressive as the 41-megapixel camera loaded onto the Nokia Lumia 1020 (see “Review: Nokia Lumia 1020”).

Apple also turned to its software to help drum up excitement Tuesday, reiterating details of the much-redesigned version of iOS it first showed in June. This version, iOS 7, moves away from the company’s traditions in favor of a cleaner, modern look (see “Apple’s New Mobile OS Is All About Ive”).

The results are mixed. The new OS, available on the new iPhone, and on September 18 to older iOS devices, adds many features that have long been popular in other mobile platforms and apps. These include the ability to change the look of photos with live color filters, the arrival of a swipe-to-see-it control panel, and a multitasking feature that looks similar to that on the now essentially defunct webOS platform created by Palm.

Obviously, the iPhone isn’t going away—Apple sold more than 31 million of the smartphones in its most recent quarter—but it has clearly stalled in terms of adding wow-worthy features. The iPhone may be fading into the background, hype-wise, as it reaches a sort of gadget adulthood. It will continue to mature, but not as radically or noticeably as in the past.

That’s okay, though: this happened to the iPod before it, and will happen to other Apple gadgets in the future. It’s a natural progression as consumers’ whims, technology, and the consumer electronics industry evolve. And Apple will probably continue to sell millions of iPhones to emerging markets, assuming it can price the device cheaply enough to compete with the slew of low-end Android phones flooding in.

However, Apple will need another category to chase to maintain its reputation. The company got where it is by watching other companies stumble with new technologies before presenting its own solution to wide acclaim (and intense sales). That worked with the iPod, iPhone, and iPad. What’s next?

Wearable computing seems a likely answer. Over the past year, enthusiasm for wearables like smart watches such as the Pebble and head-mounted computers such as Google Glass has heated up tremendously. Apple is surely building its own take on the smart watch, and chances are it will be an impressive melding of form and function.

Apple’s history in finding new ways to combine hardware and software suggest it could be better placed than any other company to build a category-defining smart watch. An iWatch may well be the next entry in the list of gadgets Apple created that were able to convince millions of people to desire something they didn’t know they wanted.

It wasn’t unveiled on Tuesday, but I’d expect to see an iWatch in the near future. If and when that happens, the Apple hype machine will rev back up into high gear, and for good reason.

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