Apple iPhones Add More LTE & Ways to Pay

Apple has taken the wraps off its latest iPhones, exactly one year after its last hardware reveal. The wireless operators will be pleased to see the new iPhone 6S and iPhone 6S+ feature 23 bands of LTE, but perhaps irked to see the new business model option Apple is using to sell them.

Apple Inc. (Nasdaq: AAPL) CEO Tim Cook kicked off the iPhone portion of Wednesday's event by crowning the iPhone 6 the most popular iPhone ever, as well as the most popular phone in the world with 35% year-over-year growth and 75% yearly growth in China. But they are about to be dethroned by Apple's newest iPhones.

"While they may look familiar, we have changed everything about these new iPhones," Cook said of the iPhone 6S and 6S+, which -- indeed -- look like their predecessors but in new shiny colors like rose gold.

Phil Schiller, Apple senior vice president of worldwide marketing, showed off the new phones, which include 23 bands of LTE, three more than the iPhone 6 and eight more than the 5C, making them the best phones for global roaming. Schiller says they will also be twice as fast as the iPhone 6 on LTE and WiFi. The phones will include support for Sprint Corp. (NYSE: S)'s 2.5GHz spectrum through carrier aggregation and T-Mobile US Inc. 's Band 12 700MHz LTE. (See Apple's New iPhones Have 20 LTE Bands, VoLTE and Apple's New iPhones Pack in LTE Bands.)

The Apple men spent a lot more time talking up the other "profound" features of the new phones, including 3D Touch, a new way to interact with the device based on deep integration between the hardware and software; Apple's own A9 with the fastest graphics and processing power yet; and an improved camera with 50% more pixels than before, the ability to take 4K videos and to turn pictures into "live photos" that can include movement or audio.

You can find the full feature list of the iPhone 6S and 6S+ here on Apple.

For more on notable smartphone launches, visit the dedicated mobile device content section here on Light Reading.

Apple's iPhone Upgrade alternative
Perhaps the most notable change in the new iPhones was how Apple will bill for them. Apple started out touting traditional carrier contacts, on which the phones will be priced like their predecessors -- starting at $199 for the 6S and $299 for the 6S Plus with a two-year contract.

Cook also showed off the US wireless operators' new installment billing plans that range from $19 to $31 per month for the device, noting "the simple truth is, on an installment plan, any new iPhone you want is pretty affordable." (See Verizon EVP: New Data Plans Not Reactionary , Sprint Goes 'All-In' on New Pricing Plan, T-Mobile Gives More Data to Families and AT&T Gets 81% of Subs Off Unlimited Data.)

And -- here's where it gets interesting -- he took it a step further to introduce Apple's own installment billing plan via its retail channel. Through a new iPhone Upgrade program, consumers that purchase their phone through Apple will pay $32 per month for two years for an unlocked phone and Apple Care warranty with the option to buy a new phone every year. It's a model that was inspired by the carriers, but likely won't make them happy as consumers may prefer to owe a debt to Apple instead.

"This is a huge opportunity for Apple to take control of the customer relationship away from the carriers, and that in turn is a big risk factor for carriers, which will now cede some of that relationship to Apple," Jackdaw analyst Jan Dawson writes in a research note. "Arguably, only Apple has the infrastructure in place to offer this kind of plan to customers, so this will also be a further differentiator against competitors."

This year, the iPhones were really just a side note as Apple's new iPad Pro, Apple TV and even the new apps for the iWatch stole more of the attention at the keynote address. Apple's latest enterprise-focused iPad features a 12.9-inch screen, the zippier A9X processor and comes with an optional keyboard and stylus, dubbed Pencil. (See Apple Brings tvOS to Apple TV, Apple & Cisco Plot an Enterprise Fast Lane and Apple Watch Has No Time for Operators.)

The new iPhones are available for pre-order on September 12 and in stores on September 26. The iPad Pro will be available in November, and Apple's latest operating system, iOS 9, will be available for download on September 16.

Apple's stock was trading down 1.94%, or 2.18, to $110.13 after Wednesday's event but before market close.

— Sarah Thomas, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, Editorial Operations Director, Light Reading

mhhf1ve 9/10/2015 | 3:28:08 PM
Re: Contracts... Apple financing seems to be an interesting new development in the way Apple sells iPhones. I'm somewhat surprised that they didn't do this sooner, though? I think Apple has had payment plans for MacBooks and other products, so I guess this move must really have been delayed out of some kind of negotiated courtesy with carriers?

And I see why/how Apple can offer this plan AND how carriers can offer a lower payment scheme -- Applecare is included in Apple's offer, whereas each carrier has its own insurance plan with different terms. Applecare doesn't do anything for lost or stolen phones, but most carriers have a lost/stolen term and a deductible. So there's some wiggle room in the pricing and differentiation of these payment plan options.
mhhf1ve 9/10/2015 | 3:22:39 PM
Re: Does this also mean the complete end of "locked" phones? The reason why I'm not so sure -- is that Apple will have to specifically make carrier-specific phones when it doesn't really need to? Why should Apple continue to make a Sprint-only phone (or pick your favorite carrier) when the "standard" iPhone can support all the networks?
Sarah Thomas 9/10/2015 | 10:35:02 AM
Re: Does this also mean the complete end of "locked" phones? I believe the carriers will still have their own versions, which will have to follow their unlocking policies -- ie. after the phone is paid off. And, they still won't be able to switch between networks easily because of disparate spectrum bands. The traditional locked phone policies are definitely changing with the demise of contracts and these new policies though.
Sarah Thomas 9/10/2015 | 10:28:20 AM
Re: Contracts... Google never did have much luck, but it was also doing direct retail online. I think Apple is one of the few companies that can pull this off -- and it might have to too. The iPhones are so expensive that I imagine a lot of consumers won't want to pay Apple outright, so this is the only way it can get them to buy from it. It still didn't talk about the full cost of the device in its launch, instead showing off how cheap it was with installment billing.
KBode 9/10/2015 | 8:58:31 AM
Re: Contracts... Well Google has tried for years to pull this sort of thing, always to mixed results. Verizon in particular has been violently resistant to letting hardware vendors sell unlocked gear that works on their network.

I think as it becomes clear the real money is in data overages anyway, they're slowly but surely loosening their grip on devices.
mhhf1ve 9/9/2015 | 8:36:31 PM
Re: carriers respond How can carriers offer a lower payment plan than Apple? Are they losing money on the phones and making it up in the cell service?

Which goes back to my question about whether all the new iphones can be unlocked...
mhhf1ve 9/9/2015 | 8:28:23 PM
Re: Contracts... Is Apple the only phone maker that has this kind of clout? Microsoft doesn't seem interested in playing with phones anymore. Is the OnePlus (1or2) the only other phone that isn't tied to a retailer to sell it?
mhhf1ve 9/9/2015 | 8:25:06 PM
Does this also mean the complete end of "locked" phones? I know Apple has sold unlocked phones for a while, but carriers were still selling "locked" versions that couldn't be unlocked (or were very difficult to unlock, at least). So will carriers still have those "locked" versions now? Or has Apple finally killed off the locked versions of its iPhones? I didn't see anything about new SIM cards or the ability to switch carriers with software....
KBode 9/9/2015 | 5:40:11 PM
Contracts... The shift away from contracts and subsidies was already a good thing (thanks, T-Mobile), but I really like this idea of handset vendors competing directly with carriers used to controlling the entire retail experience. Seems like an added layer of competition that could get very interesting.
Sarah Thomas 9/9/2015 | 4:50:44 PM
carriers respond The wireless operators are already responding to Apple's new installment billing plan, which Cook said was the best way to buy the new devices. Sprint CEO Marcelo Claure pointed out that Sprint has a lower-cost option at $15 per month, and T-Mobile CEO John Legere Tweeted his support and said to stay tuned for another offer from T-Mobile...

‏@JohnLegere: this is awesome and will benefit smaller carriers and enhance ability to switch from @ATT and @verizon to @TMobile !!!
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