iPhone vs. iPhone Killers: Apple's Next Steps

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In the year-and-a-half since the launch of the iPhone, there have been numerous attempts to deliver a competing “iPhone killer” device. Some of these might even be successful. But for now, it seems the only thing that will beat the current iPhone its next generation successor.

What that might be is anyone’s guess, but there are hints along the way.
First off, the question of whether Apple (NASDAQ: AAPL) has a new phone in the works seems to have an obvious yes answer, with June or July as a logical target date. At that point, iPhone
1.0 users will be coming off their two-year contracts with AT&T and ready to renew. The timing also fits with the next Apple Worldwide Developer Conference slated for June.

“We definitely believe it’s due for a June/July refresh,” said Ben Bajarin, analyst with Creative Strategies. “That tends to be sticking to their usual cycle of an iPhone/iPod release in June/July and a Mac update in August/September. That was one of the reasons for pulling out of Macworld, the dates didn’t fit with their timelines.”

Releasing a new iPhone this summer would also make sense, from a competitive standpoint. Palm is due to ship its flashy Pre device by then, a device that got a lot of buzz after it was previewed at the January Consumer Electronics Show. Apple also dropped a hint of a new phone in the release of its latest iPhone firmware code, version 2.2.1.
MacRumors posted a note from someone digging around in code who found a reference to an “iPhone 2,1.” The original iPhone was referenced as “1,1” and the iPhone 3G as “1,2.”

Apple did not return calls seeking comment. Typically, the company doesn’t comment on future product plans.

At least there are those subtle hints. As to what it contains, the speculation goes off the charts. There has been talk of an “iPhone Nano,” a smaller version of the phone, for months before Tim Cook, chief operating officer and leader of Apple during CEO Steve Jobs’s extended leave of absence for health reasons, ended that speculation during the most recent quarter’s conference call.

“You know us, we’re not going to play in the low-end voice phone business. That’s not who we are. That’s not why we’re here. We’ll let somebody do that. Our goal is not to be the unit share leader in the phone industry. It is to build the best phone,” he said on the call.

Moving up the food chain

So now, all the speculation has shifted to a higher-end phone than what Apple already has. With iPhone contracts coming up, customers will likely want more than just incremental updates, argues Bajarin. They will want a big jump from the original phone, not just a few new features. Changes to the architecture could enable features iPhone fans have been asking for such as the ability to run applications in the background and to play Flash animations.

The question is what, and how Apple will achieve it. One rumor came courtesy of a research note from Doug Freedman, analyst with AmTech, the market research firm previously called American Technology Research. He suggested Apple is working on an iPhone using nVidia’s Tegra chip.

This article was first published on InternetNews.com.