Is the iPhone X and Face ID enough to put Apple back on top?

Written by on October 2, 2017 in Guest Blog with 0 Comments

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Face ID will make or break this device. I have long believed that this year’s iPhone offerings will not trigger a super cycle of replacement but with a lukewarm reception for the iPhone 8 is likely to mean that it is up to the iPhone X to drive Apple’s bottom line beyond expectations.

When I look at the iPhone X and compare it to the Galaxy s8 / s8+ or the Note 8, it is frankly, unremarkable.

  • Furthermore, I suspect that on a side by side test, the Galaxy s8 screen may well come out on top.
  • However, the Galaxy s8/s8+ and Note 8 all fall over where every Android phone always falls over which is: software.
  • All the apps are there but they never seem to work quite as well as they do on iOS leaving the whole experience feeling disjointed despite best in class hardware.
  • In my opinion the weakest feature of this year’s Samsung line-up is the facial recognition which is very slow and unreliable on the best of days.
  • Almost anything other than a perfect situation causes it to fail and sunglasses, hats and even lollipops are a no go.
  • The end result is a trip back in time to when Nokia ruled the smartphone market where I end up using a PIN to unlock the device 90% of the time.
  • This is where the iPhone X can leave Samsung in the dust as I suspect that almost everywhere else (except perhaps the processor) it is likely to be somewhat behind.
  • However, in order to do this Face ID on the iPhone X has to be flawless which is a tall order especially as it failed to recognise one of Apple’s best-known executives first time.
  • In Apple’s defence there may have been some mitigating circumstances that caused it to fail in that instance that have nothing to do with how the technology will work day to day.
  • However, if Face ID proves to be anything less than Apple has billed, I think it will materially hurt the appeal of the device as the method of unlocking and authenticating on the iPhone 8 will instantly become far superior to the flagship.
  • This has the prospect to slow down replacement by iOS users which will materially impact Apple’s results going into fiscal Q1 (Q4 17) and Q2 (Q1 18).
  • The net result would most likely to be an unwinding of Apple’s PER multiple which has expanded nicely this year on hopes of another iPhone 6-like super cycle.
  • I think that even if Face ID works as well as hoped, I doubt it will trigger another cycle of that magnitude, especially given that the device starts at $999.
  • Consequently, I am increasingly nervous with regard to Apple’s share price as I can see only downward drivers.
  • My indifference is moving more towards the negative end as there is more value to be had elsewhere.
  • Tencent, Baidu and Microsoft leap to mind.

This article was first published on RadioFreeMobile.

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Richard Windsor

About the Author

About the Author:

Dr Richard Windsor is the founder of Radio Free Mobile which is an independent research provider. The research helps clients to understand and evaluate the players in the digital ecosystem and presents a unique perspective on how all the pieces fit together in an easy to read and digest way. The product is available on a subscription basis and counts members of the handset, telecom carrier, Internet, semiconductor and financial industries as its subscribers. RFM is the land of the one man band meaning that Dr. W. also makes the tea.

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