Carl Icahn / Getty
On Tuesday Apple introduced two beautiful new iPhones, a very colourful plastic-cased iPhone 5c and the top of the line all aluminum iPhone 5s, and confirmed they would both be available for sale in many of its major international markets, including China, from September 20th. Apple also issued the “golden master” of its new mobile operating system iOS 7 to developers and said its public release would take place on September 18th for iPhones (the iPad version will follow a little later).
The two new phones and the major revision to the operating system taken together offer a clear forward guide to the integrated world of hardware and software that Apple increasingly favours. The many changes made are sophisticated, but iterative, which has also been their practice and reflects the view that that is what their customers will really want.
The iPhone 5s looks like the old one but packs a much heavier punch inside, with an Arm A7 64 bit system on a chip inside plus an additional motion sensing chip, and many other clever tricks including a fingerprint sensor to identify its owner and a dual mode cool and warm flash for its upgraded camera.
With more than 700 million users of iOS devices worldwide now, most of them already running the previous latest public release of iOS, most are expected to now update to the new version as well, even on their older devices, all essentially taking a ride forward with the company into its vision for the future.
So far Apple has been pretty much right in its commercial policies, with the iPod, and the iPad in. Even so, Apple’s take is still not a popular view on Wall Street, however, which demands continuous instant gratification, and which again sold off Apple’s shares in the wake of Tuesday’s announcement by more than 5%.
This has led Carl Icahn to pipe up again that the shares are cheap, that he has bought some more and that what Apple really ought to do is leverage up and buy back massive amounts of its stock from its ungrateful investors. He is right that it is probably cheap, though his prescription sounds awfully like the one he was recommending for Dell, too, where he has not prevailed. As one trader mentioned to me, perhaps unfairly, in publicizing his holdings and recommendations about Apple so loudly Icahn is simply “talking his book” in the language of the trade. Maybe he should be called “iCahn” not Icahn at this point too….
Part of Wall Street’s problem with Apple this week is also its lack of an announcement of a “really cheap” phone for emerging markets, though if they did make one the same people would likely pounce on the margin erosion that would go with it. Niche or market share is often part of a long-running argument in many industries.
Probably a larger part of the loss in Apples shares this week, also reflects there was still no announcement of an expected deal to put its phones into China Mobile, the largest mobile carrier in China, though one was finally announced with Japanese leading carrier Domoco.
However, even though both the announced new iPhones are true world phones which will be able to operate on any of 13 different frequency bands used in different countries around the world, and the China regulatory authorities ahve authorized their use technically already, the unique China Mobile system is actually not one of the frequency bands provided for on the phones just announced.
This has led at least one analyst to conclude Apple may have yet one more new iPhone still up its sleeve which will be dedicated to China Mobile, if as and when a deal is finally put to bed. When this happens, and what price they will sell them for, will no doubt be of interest to Carl Icahn and everyone else interested in the company. Even with what they’ve done already though, their timing is once again impeccable and, assuming they can make them fast enough, should sell well for the holidays.