Grace Chng, Senior Correspondent

Apple out to take big bites at both ends of global phone market

The new iPhone 6 is displayed during an Apple special event at the Flint Center for the Performing Arts in Cupertino, California on Sept 9, 2014. -- PHOTO: AFP
The new iPhone 6 is displayed during an Apple special event at the Flint Center for the Performing Arts in Cupertino, California on Sept 9, 2014. -- PHOTO: AFP

New smartphone launches contain the usual advances in performance, battery, cameras and display quality.

Apple's unveiling of the iPhone 6 and iPhone 6 Plus on Tuesday in Cupertino, California, was no different. They are brand new designs with state-of-the-art features that are cut from a different cloth and not mere upgrades of the current models, the 4-inch iPhone 5S and 5C. They are skinnier yet sport a sexy rounded design. They are more powerful and have larger 4.7-inch and 5.5-inch screens.

They complete Apple's smartphone product family. The new arrivals bolster Apple's grip at the high-end of the smartphone market, its traditional strength. The current iPhone 5S becomes the entry level to this segment, reinforcing its flank against handset makers trying to barge into this area.

But in a smart move, Apple is also taking care of the lower end of the market, where phones are US$100 (S$126) or cheaper. Apple's iPhone 5C has to compete against many low-priced Android-based phones. Apple is giving away the 5C 8MB version for free - at least in the United States. Users only have to pay for the mobile plan.

In one fell stroke, Apple is putting its phones into the hands of those who previously could not afford a high-priced iPhone.

Targeting both the high and low ends of the market, Apple is now better positioned to compete in markets like China, where it will have its best growth because of its large user base.

Already, Chinese handset makers like Xiaomi and CoolPad are chipping away at the market once dominated by Apple and Samsung. According to research firm Strategy Analytics, the four-year-old Xiaomi has grabbed 5 per cent global market share in the last three months. It has a cult-like following in China, where its phones sell in the US$100 to US$300 category, competing with Apple directly.

There is always pent-up demand for new iPhones, especially from its large base of users who will switch to the new models simply because they have arrived.

IT lecturer Julian Wong said he conducted a poll of his colleagues yesterday morning. "Ten out of 10 iPhone users will upgrade because they've been waiting for a larger screen," he said.

The iPhone 6 Plus is considered a phablet - a cross between a phone and a tablet - which sports a larger screen and straddles the functionality of a traditional tablet with that of a phone.

Samsung introduced its phablets earlier, in 2011. According to research reports, the Korean electronics giant has sold more than 30 million Galaxy Note devices by the end of last year.

Analyst Ryan Huang of brokerage company, IG, said research showed that handsets with screens larger than 5-inches accounted for around 40 per cent of global smartphone shipments between April and June this year.

Apple is late to the party on large screens, but "fortunately, it looks like the party still has some way to go". "There's still a strong demand by consumers for large screen phones," said Mr Huang, who is based in Singapore.

Another thing consumers want: a phone that does it all.

Remember Facebook's social network smartphone? It failed.

Analyst Trip Chowdhry from research house Global Equities in the US said in a note to customers that single-use phones are doomed.

He points to the Windows smartphone, focused on office productivity. It had poor take-up.

Blackberry, popular with financial executives, is barely holding on to a slim market share.

E-commerce giant Amazon launched a smartphone called Fire in the US in July to focus on online shopping. Fire has not lived up to expectations. Earlier this week, Amazon slashed its price to 99 US cents from US$199.

Only smartphones that are "all things to all people" will be a commercial success, said Mr Chowdry.

Among smartphones, the iPhone falls into this category.

chngkeg@sph.com.sg