iOS 7 Wish List

In about one month, Tim Cook will show iOS 7 to the world. Developers will receive a beta version of the software to get prepared for the release of iOS 7 to consumers alongside a new iPhone (5S? 6?) in the fall. While WWDC has sometimes included the launch of a new iPhone, that won't be the case this year. There is a slight chance of MacBook and/or Mac Pro updates, but everything is second fiddle to the preview of iOS 7.

This year, the conversation around iOS 7 has centered around a visual redesign, not really the new features. But what about new features? Each year, I've posted a wish list for the new iOS, here's my iOS 7 Wish List.

Unread Mail - We recently saw the massively successful launch of the Mailbox app. Their main goal is to turn email into a to do list and they include many cool gestures to help you get this done. But all the people that I've watched use Mailbox could accomplish the exact same thing with Read/Unread. If it's read, it's done; if it's unread, then I still need to do it. Creating a seperate "Unread" bin in the Mail app would solve this. And a swipe gesture to mark as read/unread would be icing on the cake.

PowerNap - I constantly see iPhones with 30+ app updates and at least 1 software update from Apple. PowerNap should be adopted from the Mac to bring auto updates to the iPhone. If your iPhone is 1) plugged in, and 2) on WiFi, then every night it should automatically download and install new app updates and software updates from Apple. Any updated apps would have a corner ribbon similar to the "New" ribbon that reads "Updated". No longer would you have to worry about updating your apps and device software. Everything is always up to date. Plus, the already unbelievably fast iOS upgrade rate would get even faster.

Update: One day after posting this, Apple released iTunes 11.0.3 which adds "Update" ribbons to apps with available updates. Looks like a step in this direction.

Group Messaging - It's obvious that mobile messaging is taking off big time – I could name 10 easily. Apple can expand upon iMessage's features with the ability to rename groups, see read status for multiple people, share location easier, and more. I expect (and hope) group messaging will continue to evolve in iOS 7.

iMessage Resend - If I send an SMS or iMessage and it fails, just resend it! Here's how it could look.

Settings - The Settings app has become a nightmare. In particular, the Notifications area is a nested mess, and the WiFi, Bluetooth, and Personal Hotspot toggles are buried one level too far. I expect Jony Ive to take a chainsaw to Settings to bring a new intuitive organization and new control scheme for quicker toggling. 

Photos - Many people have covered this already. But I just want to be able to create and manage photo albums. Let me move a photo from the Camera Roll to its correct album. When I take a beach vacation, let me create a "Beach" album and any photos go in there. It would sync to my other devices. If I choose, it would even sync to other people's devices, and their photos to mine. Currently, shared Photo Streams only allow one person to the be uploader while everyone else is a watcher - surely multiple uploaders is an obvious expansion to that feature.

Hand Off - This is the name that I've personally given to "inter-app communication". Apps need to be able to talk to each other. For example, I should be able to tap a photo in Dropbox and send it to Instagram. There are tons of nuances to consider when implementing this, but in general – let apps talk to each other.

Notification Center - We clamored for a notification center, and then we got it in iOS 6. Yet I never use it and I don't know anyone who does. Either make it useful or kill it. Swiping down from the top is important real estate that deserves a more used function.

Split Screen Video - This is my long-shot. One beauty of iOS is its simplicity and single application view. However, I watch more video than ever on the iPhone 5 and very often find myself wanting split screen. The implementation of this is a seriously challenging problem, with countless edge cases, and a dangerous high likelihood of confusing users. But if anyone can do it right, it's Apple. As with most power user features – a new gesture is likely the key.

That's it for this year! Mark your calenders for June 10th, to see what new features we get.  

Big iPhone Options

We all know iPhone is the most popular US smartphone, but is that because it's smaller or despite being smaller? For that matter, if Apple fielded a larger iPhone, how would they do it?

Apple has faced this question before, so let's look at the past solutions.

For iPhone 5, Apple added 1 row of icons to the top of the iPhone 4S screen. This made it 4.0" diagonally and increased the screen real estate 18% from the iPhone 4. Also, this made the screen's aspect ratio 16:9 which is the common aspect ratio for video. Thus, they optimized for their supply chain by keeping the same screens they were already making, just cutting them slightly bigger. They optimized for users, giving them a larger screen and better ratio for video viewing. And they only sacrificed slightly for developers, since the screen dimensions only changed in one direction (height). 

For iPad Mini, Apple used the same iPhone 3GS panel, but cut it into bigger pieces. Apple manufactures these screens in large sheets that are then cut to size.  So instead of cutting them into 3.5" screens, they just cut 7.9" screens. For Apple's supply chain management this was a genius solution - they were already making that screen panel for 3 years. And developers didn't have to change anything, all their iPad apps were already made for the big iPad's 1024x768 screens. Everybody won - Apple didn't have to create a new screen, developers didn't have to create new apps, and consumers got an iPad Mini.

As I've just alluded to, when creating a new device Apple balances 3 main forces - supply chain, developers, and users. For supply chain, Apple's best case scenario is using screens that are already being manufactured. For developers, the best scenario is a screen resolution that their apps are already made for, and users want the best screen clarity at the most optimal screen size (not necessarily the biggest).  

With that background, let's walk through some options for a bigger iPhone, and how they would each balance those 3 forces.

4.34" screen: Stretch the screen, but maintain Retina >300 ppi

For a screen to be deemed "Retina" it must be at least 300 pixels per inch (ppi) (at the same viewing distance of the iPhone 5). The current iPhone 5 is 3.5" tall and 1.96" wide and 326 ppi, so Apple could stretch the screen to exactly 300 ppi and still call it Retina. That screen would be 3.78" x 2.13", with a diagonal distance 4.34" and having 18% more screen area than iPhone 5. Since the pixels would be a new size, this would require entirely new screen manufacturing by Apple, but only provide minimal screen size increase to users. Developers would have to make no changes. So developers would be the clear and only winners in this scenario, with Apple and users making significant compromises. For such a small increase in size, and such large sacrifices, this option isn't likely. 

4.74" screen: Add a row of icons to the top and side

Applying the same idea used in the iPhone 5 (adding a row of icons to the top), Apple could make a big screen iPhone by adding another row to the top and one to the side. Doing this would yield a 1312x816 pixel screen, with actual dimensions of 4.0" x 2.5". Conveniently, both very round numbers - so we may be on to something. The screen diagonal calculates to 4.74", which is a 47% increase in screen real estate from the iPhone 5. So users would get almost 1.5x the screen area, and supply chain could utilize current panel production - both of those are great - but developers would pay the price.  Developers would have to reformat both dimensions of their apps. While this is an okay solution, it only makes sense if Apple is prepared to indirectly tell developers their experience is less important than user's experience.

4.94" screen: Cut iPhone 5 resolution screens from iPad panels

Applying the same idea used in the iPad Mini (using screens already being made), Apple could cut iPhone screens from iPad panels. Cutting the iPad panels to 1136 x 640 (the iPhone 5 screen resolution) it would be 4.3" tall and 2.43" wide. Unlike the previous options, this screen would be the same 264 ppi as the iPad - which only qualifies for Retina at 15" viewing distance. The diagonal would be 4.94" which is 52% more screen area than iPhone 5's 4.0" diagonal screen. Supply chain would not have to manufacture a new screen density, developers would not have to reformat any apps, and users would get an iPhone with 1.5x the screen area. There are no big sacrifices in this scenario.  

This gives Apple 3 options, spread across the size range from 4" to 5". 

The best option is the one that balances the 3 forces. But balancing isn't purely making the least possible sacrifices, it's also making the worst sacrifice the least impactful. For iPhone 5, developers had to make small adjustments while users and supply chain benefited. For iPad Mini, users got a non-Retina screen to benefit ease of development and supply chain (which will be null when iPad Mini gets upgraded to Retina screen).

In order to build a bigger iPhone, the best balance is to cut 4.94" screens from iPad panels. Developers don't have to alter their apps, Apple's supply chain maintains its beautiful efficiency, and users get a new iPhone option that is 1.5x bigger. The worst sacrifice would be users get a screen that's 36 ppi shy of Retina.

Pricing the iPad Mini

Tomorrow the iPad Mini will be announced. While we already know almost everything about the device due to supply chain leaks, the one thing we don't know is the price. The two main forces to balance when pricing a product are the competitive landscape and the profit margin.

Competitive Landscape

Google and Amazon are the most worthy competitors in the small tablet market. Google's Nexus 7 is $199 and Amazon's Kindle Fire HD is also $199 (albeit with ads). The 7" tablet battle is clearly happening around the $199 price point. But Apple is not making a 7" tablet, they are making a 7.85" tablet. In other words, the iPad Mini's value proposition is not "the best 7 inch tablet ever made". Instead, it is "7 inches is too small, so we made ours bigger, and it's the best small tablet ever made". Trojan Kitten created an excellent illustration of the difference.

The iPad Mini's screen will be nearly 40% larger than the Kindle Fire HD and Nexus 7. If this same 40% is crudely applied to their $199 price point, you get an estimated iPad Mini price of $279.

Profit Margins

Apple has repeatedly shown that they are willing to cannibalize their own products. Famously, they cannibalized iPod with iPhone and Mac with iPad. As readers know, I am a big fan of disruption theory, and this is again a lesson in disruption: you would rather cannibalize yourself than allow a competitor to do it. When you cannibalize yourself, the customer still walks out of the store with an Apple product - it's just a different one.

Studying Apple's past cases of self cannibalization can teach us important lessons about disruption and Apple's use of the theory. In this case, the most important lesson is that the new product maintains or increases profit margins. The iPhone has greater profits margins than the iPod, and the iPad has greater profit margins than the Mac. Therefore we can ask the question: At what price point does the iPad Mini maintain or increase profit margins?

To do this, we need to know the margins of the iPad, and the cost to build an iPad Mini. Those numbers are not disclosed by Apple, so we will have to use implied margins as a proxy. Implied margins are simply the retail price minus the manufacturing costs. KGI securities analyst Ming-Chi Kuo has estimated the cost of the iPad Mini at $195. Before finding Kuo's estimate, I used component costs from the iPad 2 and iPhone 5 to construct my own estimate and arrived at $203. Pretty close. Since Kuo does this "professionally", we'll use his estimate of $195. For the iPad 3, we have iSuppli's estimate of $316. Here's a table:

Simple cross multiplying yields an expected price of $308 (very similar to our earlier estimate of $279). However, we know that the base model has the lowest margins, and not everyone buys the base model. So we need to look at margins across the entire iPad portfolio to see a more realistic distribution of margins. 

The $199 starting price has margins below that of the iPad 3 in every model except for the most expensive. This starting price would not adequately maintain the iPad 3's profit margin.

Alternatively, $329 starting price aggressively increases the profit margins, almost too much.

The $299 starting price has margins at or above every model of the iPad 3, and almost exactly matches on the always important base model. Including our previously calculated price estimates of $279 and $308, $299 fits in quite nicely. It maintains margins at the lowest price point, and healthily increases margins on every other model. $299 seems like the clear choice.

However, it's not exactly "case closed" when you study the $249 starting price curve. The base model provides an appealing low entry price point, and is conveniently the only point which sacrifices margins. A starting price of $249 would signal that Apple has placed added importance on a low entry price point.

Best, not First

Smartphones are trending towards larger screens, with Samsung, HTC, and Nokia phones leading the charge. This is certainly due to consumer demand. But while users want bigger screens, they aren't exactly begging for bigger phones. So why are all the phones getting so big? Because manufacturer's must pack in extra large batteries to accommodate the premature LTE chips they are using. These early chips are inefficient with power, larger in size, and even required a second chip to transmit voice calls. Apple waited until now to add LTE, becuase the first chip to eliminate these problems, Qualcomm's MDM9615, is just now ready.

Due to a number of leaks, we already know that Apple's iPhone 5 will follow the trend of larger screens. We also know its dimensions. The screen will add 0.5" diagonally to reach a total of 4", while the dimensions will be the same in the width, but 8.6 mm taller, and 1.7 mm thinner. Here it is visually:

The iPhone 5 will add the larger screen that consumers are demanding and also LTE that they demand, but without the additional bulk. In fact, the volume of the device will decrease 14%. This is possible largely thanks to the new generation of LTE chips, but also an innovative case design, In-Cell screen technology, and other internal improvements.

Yet another reminder that Apple's goal is to make the phone that is best, not first.

The Reason for the iPad Mini

On a past Apple conference call, Tim Cook said "one thing we'll make sure is that we don't leave a price umbrella for people".  What's that? A price umbrella is when a company with dominant market share maintains high prices, leaving an opening for new competitors to enter at lower price points.  In the case of the iPad, the price umbrella until recently was at $499. Someone could enter that market at lower prices and exhibit classic disruption to push them out from the bottom up.

Apple has already solved this problem twice, with the iPod and iPhone.  So let's look at what they did.  

With the iPod they created the iPod Nano and iPod Shuffle, both of which are cheaper products.  

With the iPhone they kept selling the iPhone 3GS, which is old hardware that benefits from economies of scale, and they also get carriers (At&t and Verizon) to subsidize the phone costs by $400. 

So, these are their 3 strategies:

• create a new product line
• keep selling old hardware
• get someone else to subsidize the product

What will they do for the iPad?  Well, we have already seen Apple apply the methodology of keeping old hardware on the market - they now sell the iPad 2 at $399.  But, this isn't really eliminating the pricing umbrella, it just lowers it.  In order to eliminate the pricing umbrella Apple needs to serve the $199 to $399 price range. ($199 is the bottom of the market until new technologies emerge, new price models emerge, or a company decides to sell the hardware at a loss to gain market share.)

Let's see all this visualized.  This is every current model of iPhone, iPod, and iPad graphed by price.

Looking at the red iPhone price points, notice that most of the lower prices are served by iPhones that say "Locked".  These are subsidized by $400 by the carriers.  And at the lowest price point ($0) is the older iPhone 3GS, which benefits from being subsidized and from being older cheaper hardware. 

Looking at the blue iPod price points, notice that the price points are clearly served by different product lines.  iPod Touch at the high end, iPod Nano in the middle, and iPod Shuffle at the bottom.  Just like we said, they used product lines here to eliminate any umbrella. 

Looking at the green iPad price points, we can see the the iPad 2 served to push down the umbrella from $499 to $399. However, there is an obvious umbrella and it's clear that Apple needs a product to cover the $199 to $399 price range.  Insert the iPad Mini here.

They've already used the older hardware strategy, so the remaining two strategies are 1) get subsidies or 2) create a new product line.

7.85" iPad Coming Soon

We are seeing a new pattern in Apple leaks. In the past, Bloomberg and the Wall Street Journal would publish reports only weeks in advance of devices coming out.  Now they are doing it 3 months in advance.  In the past, you had to diligently read MacRumors and 9to5Mac to know a new product was coming soon.

But now we are seeing Bloomberg and the WSJ reporting much earlier on Apple devices.  Such as a new 7-8" iPad coming in September or October. The reason this is important is because both have very good track records predicting Apple moves.  Much better than any other publications. I consider Bloomberg to be around 90% accurate, and the WSJ to be about 98% accurate.

Effectively, anything they they report on a new Apple product is true.

On July 3rd, Bloomberg reported that Apple "plans to debut a smaller, cheaper iPad by year-end." They cited two people with knowledge of the plans.

Then, two days later, WSJ reported that "component suppliers in Asia are preparing for mass production in September of a tablet computer with a smaller screen than the iPad."  They also cited two people when saying the screen will be less that 8 inches.

In terms of Apple rumors, we couldn't ask for anything more. These are the two most credible sources. This offers us the most possible certainty in saying that there is indeed a 7.85" iPad coming in September or October.

Next iPhone Screen may use In-Cell Technology

WinTek, a screen supplier for Apple, just reported sales numbers for the month.  Normally sales increase 1% per month, but last month it dropped a precipitous 33%.  The largest drop in 3 years.  Such a large drop doesn't mean Apple is selling less iPhones, it means Apple is starting to produce iPhones with an entirely different screen.

Current iPhone (and iPad) screens use On-Cell tech, but the report notes that Apple may be shifting to In-Cell tech for the next screen.  I'll allow Wired to explain the technology of the new screen:

Currently, the iPhone’s “On-Cell” display is layered a bit like a sandwich. At the very bottom, you’ve got the back light. Directly above that, the LCD section, which houses the red-, green-, and blue-colored pixels of the display. Then there’s a layer of glass. On top of that is the capacitive touch layer, which is then topped off by a tough layer of Gorilla Glass. The middle layer of glass separates the liquid crystal portion of the display from the touch portion.

In-cell display tech eliminates that middle layer of glass, combining the LCD and touch sections of the display into a single layer. One way this can be successfully accomplished is by “multiplexing” the electrodes normally used to relay touch input — that is, using the same electrodes to handle the signals for both touch control and the pixels of the LCD, according to a 2010 IHS report on touch-screen displays.

In-cell technology isn’t currently deployed in any shipping cellphones.

Basically, it makes the screen thinner and brings the actual pixels closer to the surface that you touch with your finger.  This creates a closer connection between the user and the device.  Closer, in fact, than any currently deployed cellphone.

Wired goes on to state that this is so new it will be hard to produce mass quantities:

Right now, in-cell touch displays are still an emerging technology. So while the core technology promises long-term benefits, yield rates could be a problem in the shorter terms, Alexander says

However, this only strengthens the argument that Apple would use In-Cell technology.  We know Apple leverages its large cash reserve to soak up all supply of any new technology.  They do this so that they don't even have to own the tech, IP, or production lines to lock out competitors.  They just buy all the production, leaving none for anyone else.

These three things combined make me very optimistic for the technology to be applied in the new iPhone.

Stop the Annoying "Select a Wireless Network" Popup

I'm shocked at how many people don't know about this feature, so I thought I'd just post a simple guide. If you get popups throughout the day that say "Select a Wireless Network", here's how to disable it.

Notice the text at the bottom that says "Known networks will be joined automatically.  If no know networks are available, you will have to manually select a network".  That's what you want.  It means you won't ever be pestered to join a wifi network, and it will automatically join the ones that you have specifically authorized.  Such as your home and office networks.

Video of iPhone 5 Back

Another day, another parts supplier with a video of the iPhone 5 back.  This video has a good explanation of the differences.  The best shot is the one below which shows the thinness of the new iPhone 5 back. Remember that the screen will still need to attacted, adding a few mm, but we can tell it's thinner than the iPhone 4S.

The iPhone 4S is made of a three parts: metal mid-plate, a back panel, and a front panel.  The iPhone 5 design incorporates the back panel into  the mid-plate, which decreses the thickness of the phone by the thickness of the back panel.  In other words, looking at the iPhone 4S, the 5 will be less thick by one width of the black glass panels.  It may not sound like a lot, but in your hand it will feel like a lot.

Here's the full video:

iOS 6 Wishlist

The WWDC keynote is on Monday, where Apple will preview the new iOS 6 software for iPhone, iPad, and iPod Touch.  It won't be broadcast, but you can read along as it happens here.  Last year Apple pretty much took care of all the low hanging fruit such as combined Mail inboxes, integrated Twitter, and iMessage just to name a few.  At this point iOS doesn't have any huge voids except for the lack of turn-by-turn voice navigation.  I hope they announce that, and these other small features:

- turn-by-turn navigation

- automatic updates of iOS and apps

- "unread" inbox in Mail

- qeueing of SMS and iMessages (like outgoing Mail)

- relocated "mark as unread" button in Mail

- multiple signatures in Mail

- manage photo album on device

- rename group Messages

Like I said, nothing major except navigation.  Here's to hoping for surprises.