The current crop of Apple (NASDAQ: AAPL) iPhones isn't selling too well. Last quarter, Apple reported that its iPhone revenue dropped close to 15% year over year and issued guidance for the current quarter suggesting yet another quarter of iPhone revenue declines.
It's clear that Apple's current product cycle is, for lack of a better word, a bust.
Image source: Apple.
Fortunately, Apple introduces new smartphones on an annual cadence, meaning that around September, the company will announce a new generation of iPhones. And, thanks to respected analyst Ming-Chi Kuo with TF International Securities, we now know some of the key upgrades that Apple plans to bring to the table with its upcoming iPhone product lineup.
With each new iPhone generation, Apple has typically delivered improvements in obvious areas such as the applications processor and cameras, and I expect that'll be the case with this year's iPhones, too.
Beyond the more obvious improvements, though, Kuo says that the new iPhones will have the following features: ultrawide band to improve "indoor positioning and navigation," frosted glass casing, bilateral wireless charging (meaning that the devices should be able to charge other devices wirelessly), improved Face ID technology, bigger batteries, and triple rear-facing cameras (it's not clear from Kuo's note if that feature be coming to all of the devices or just the top-end model).
While it doesn't look like there's anything earth-shattering here, the upgrades that Apple seems to be planning for this year's iPhones look to be more significant than what we saw when Apple moved from the iPhone X to the iPhone XS.
The "frosted glass casing" should allow Apple to aesthetically differentiate the new iPhones from the current models. The larger batteries could allow Apple to either advertise improved battery life or to boost device performance while maintaining similar battery life. The upgraded Face ID should be a good selling point, too, as there may be some prospective iPhone buyers who aren't completely sold on the current Face ID implementation.
The move to a triple-camera system should allow Apple to advertise a more meaningful generation-over-generation jump in camera capability than it has for several generations. On top of that, adding more cameras could allow Apple to narrow the competitive gap that exists between itself and some of its more aggressive competitors (like Huawei) who have already been selling triple-camera devices for quite some time.
And, finally, while I'm not exactly sold on the utility of the so-called "bilateral wireless charging," Huawei did introduce that feature with its Mate 20 Pro smartphone late last year, so Apple may be trying to play catch-up with Huawei. (This isn't surprising considering that Huawei has been posting massive smartphone unit growth in China while Apple's iPhone sales in the region have plummeted.)
Trying to get a good handle on how Apple's iPhone business will perform in the coming product cycle based on the tech specs and features of its upcoming devices is hard -- and it'd be hard even if we had key information such as pricing data. Indeed, even Apple couldn't properly predict how the first quarter of fiscal 2019 -- the company's peak quarter -- would go and was forced to reduce its guidance dramatically as a result.
Nevertheless, it seems that Apple is planning some good upgrades with its upcoming iPhone lineup that could improve the company's competitive positioning in the marketplace (although investors should also keep an eye on what the competition is releasing, too). We should know in about a year if this new lineup has what it takes to help Apple's iPhone business return to growth.
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Ashraf Eassa has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Apple. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.