Yesterday, we talked about the steps forward that Apple took with the iPhone 7 and iPhone 7 Plus. In short: we see Apple building a competitive advantage in augmented reality (AR). The dual lens camera is a precursor to greater augmented reality features that we expect in the next iPhone.
A word on the name: We expect the next iPhone to have a new design. Apple will likely break from it’s historical naming convention and call this iPhone something other than iPhone 7S or iPhone 8 because it will be the 10th anniversary iPhone. Like they did with the 10th version of the Mac OS, it seems logical that they’ll call the next iPhone: iPhone X. Regardless, it’s a suitable code name for those of us outside 1 Infinite Loop.
We expect iPhone X to feature:
- An OLED screen
- Wireless charging (a step they’ve already taken with Apple Watch)
- Dual lens camera systems on both the smaller- and larger-screen models
- A (possibly dedicated) processor capable of 3D modeling and real-time 3D image processing
- More sophisticated proximity sensors
- The iPhone X may be the iPhone model we’ve discussed that removes the home button, using haptic feed back for button presses on the display itself for home button functions. This would enable an edge-to-edge display for an iPhone without a bezel.
With iPhone X, we see Apple doubling down on AR and extending it’s lead among AR-capable devices. iPhone is already significantly ahead of Google’s Tango platform in terms of units shipped, and we expect it to remain out front for the foreseeable future.
The hardware features listed above would enable lots of new AR software use cases. And we expect the keynote to focus on demonstrating these new AR capabilities. Pokemon Go is just the beginning. Games are the obvious choice to highlight new AR features, but we envision killer AR apps in search and discovery, social, education, and many other use cases.
Note that AR goggles are not the type of product we envision Apple shipping in the next couple of years, despite recent rumors. While high speed wireless data transfer is emerging, compelling wearable optics are still tethered today and we don’t think Apple would launch that type of experience for customers. Rather, we think the iPhone platform is a much stronger play for the company in its bet on AR in the near term.
Next up, services. We think it makes sense for Apple to reinvent itself as a world class digital services company (more here). And again, iPhone is their competitive advantage. But people will experience AR through a combination of mobile hardware and digital services. Tim Cook has acknowledged the company’s strong interest in AR, and we believe they are focusing more on services in preparation for an AR world where this combination is the future of mobile software.
Disclaimer: We actively write about the themes in which we invest: virtual reality, augmented reality, artificial intelligence, and robotics. From time to time, we will write about companies that are in our portfolio. Content on this site including opinions on specific themes in technology, market estimates, and estimates and commentary regarding publicly traded or private companies is not intended for use in making investment decisions. We hold no obligation to update any of our projections. We express no warranties about any estimates or opinions we make.