Apple’s keynote WWDC delivery from CEO Tim Cook is just over 24 hours away. The iPhone 6 is still likely a month or more away from making it’s well anticipated arrival. Foxconn is expected to begin assembling the iPhone 6 in July, which means the earliest the device may arrive in customer hands is July at this point.
Apple has made some waves recently regarding the company’s pipeline of products. Apple VP Eddie Cue recently said that, “later this year, we’ve got the best product pipeline that I’ve seen in my 25 years at Apple”. The center of Apple’s product pipeline is Apple’s iPhone 6, which boasted sales of over 150m units in 2013. However, Apple iPhone sales in 2013 failed to keep up with the smartphone industry growth rate. IDC reported that in 2013, “Apple had the lowest year-on-year increase of all the leading vendors,” yes even LG had a larger year-on-year increase than Apple!
Although, Apple’s iPhone 6 may not be ready for distribution until July at the earliest I believe 2014 is the year Apple needs to show off the device whether or not it will be ready for sale in just 2 weeks. Apple historically introduces its next generation iPhone and then follows it up with a product launch within 2 weeks.
Apple’s smartphone market share is well under 20% and even though introducing a new iPhone 6 a month or more ahead of it’s expected sale date may hurt Apple sales, it’s the right thing to do. If Apple wants to gain additional market share they need to demonstrate that the company’s iPhone 6 is awesome enough for Samsung loyalists to switch over to Apple. Samsung just officially announced the Galaxy S5 Active on Thursday with mobile carrier AT&T. LG just announced its latest LG G3 smartphone, which will be launching in various countries over the next several weeks.
The best way for Apple to rain on Samsung and LG’s smartphone sales parade is by showcasing the iPhone 6 on Monday during the WWDC. If Apple’s 2014 product pipeline is truly the “best pipeline the company has had over the last 25 years,” then it is time for Apple put up or shut up on Monday. If Apple’s upcoming iPhone 6 is “truly epic” it should create a the perfect storm to rain on Samsung and LG’s product launch sales parade even if the iPhone 6 won’t show up in consumer hands for another month or more.
Apple can win significant smartphone market share right now by forcing consumers to rethink what is cool and what is innovative in the smartphone marketplace. If Apple delivers an “epic” iPhone 6 product during Monday’s WWDC, it may hurt iPhone 5s/5c sales, but at the same time it would deliver a tremendous amount of damage to the other 80% of the smartphone handset marketplace.
A preemptive strike by Apple on Monday during the WWDC would be more rewarding for Apple in the long term versus being predictable and announcing the iPhone 6 just weeks before the product launches, which is consistent with every previous iPhone launch cycle. Apple needs to disrupt consumer behavior and force the remaining 80%+ of smartphone consumers to delay their smartphone purchases and wait for Apple’s iPhone 6 device to go on sale. The only way to disrupt consumer behavior and significantly increase smartphone market share is by way of an “epic” iPhone 6 announcement during tomorrow’s WWDC keynote speech scheduled for 1pm EST.
Full Disclosure: I have no position in AAPL but I am long Apple’s newest sapphire supplier GTAT.
Reminder: My PTT Research Forensics Newsletter that is scheduled to be published on Thursday June 5th at 3pm EST.
My Forensics Newsletter pricing is now available and a special 20% launch discount (for the first 48 hours) will be available when my Forensics Newsletter subscription goes on sale on Monday June 2nd at 12pm EST.
If you were wondering what my next pick will be. Here is my sneak peek summary:
My next pick is a company that is built on top of a strong foundation of intellectual property. My analysis of the company’s data and public comments indicate that a “major ramp” in future sales is just getting underway. The company’s C-suite is in the process of scaling up the business and preparing to manage a much larger and more complex company. The company has quietly created an integrated eco-system comprised of software and hardware that continues to extend its competitive edge over its largest competitors. The industry that the company primarily supports is in the early stages of what is expected to be an explosive and long-term growth cycle.