Why Apple needs the next iPhone to be bigger than ever.

The next iPhone

The iPhone is the single largest selling smartphone in the last decade and continues to power ahead in the US and global markets. Much of China and India are relatively untapped by the iPhone phenomenon due to pricing and availability with favored carriers. So the future looks bright for the next iPhone, expected to be announced tomorrow (Oct 4).

Apple has sold more phones than ever this year and will probably continue that trend next year with the new iPhone. But contrary to how things were leading up to the launch of iPhone 4, the competition is stronger than ever today. When iPhone 4 was launched, the previous generation iPhone, iPhone 3GS was still one of the better spec’ed phones in the market as Android competition was just ramping up and Windows Phone 7 competition was non-existent.

The landscape is very different today. Windows Phone, while still not as prevalent, just launched a well reviewed update to its OS in Windows Phone Mango. With Microsoft’s deep pockets, expect some serious marketing and push leading up to the holidays. Nokia could surprise us with their first Windows Phone offering and while it is not expected to shake up markets, it could surprise with solid Nokia hardware sensibities and an improved Windows phone OS.

Then there is Android. Since the launch of iPhone 4, Android has grown from strength to strength, so much so that much of the Android heavyweights have been hit with lawsuits from Apple. It is a testament to the burgeoning success of the eco-system that Apple has felt significantly threatened and tempted to get into multiple lawsuits with HTC, Motorola and most popularly, Samsung. The competition within Android world is so fierce that Samsung, Sony Ericsson, Motorola and HTC have been forced to rapidly innovate and continually bring major hardware upgrades to their best Android offerings.

HTC’s flagship offerings at the time of writing- HTC myTouch 4G, HTC EVO 3D and the newly announced HTC WildFire S, HTC Amaze and HTC Rhyme offer unique and solid competition to the best of the best. In addition, HTC is rumored to have some superphones ready to go in the next few months that could make their slate even more exciting.

Samsung is still launching its already popular and extremely well reviewed Galaxy S2 series of phones around the world. The S2 family has sold over 10 million units world over and that does not include US since the launch happened only a couple of weeks ago. Lawsuit or not, the Galaxy S family will be a significant competitor in terms of features and innovation to the iOS family. I have personally handled the Sprint version and the device stands out in terms of performance and display- and yes, it looks and feels better than iPhone 4. Samsung also is spearheading the next pure Google experience phone popularly refered to as Nexus Prime that will serve as the flagship Android Ice Cream Sandwich device. This is expected to be announced next week and will definitely compete with the iPhone5 for holiday sales as does the Galaxy S2 family.

After a big hit launch with the original Droid which pushed Android into the limelight, Motorola has calmly chugged away over the last few years with offerings across all carriers. It recently pushed out its flagship Droid Bionic LTE handset on Verizon soon after launching its flagship WiMax Photon handset on Sprint. AT&T is expected to unveil the second generation Motorola Atrix 2 in time for the holidays. And given its recent marriage to Google, expect interesting things from Motorola as we head into the new year.

Finally, there is the coolness factor. When the iPhone4 came out, it was by far the coolest handset in terms of specs and looks. Everyone wanted one. Apple is definitely expected to continue the coolness factor into the iPhone5. But Apple is also contending with much smarter and cooler design than in the past. Unless the iPhone5 is a radical redesign that innovates in multiple ways, customers will veer towards the diverse Android offerings across multiple manufacturers. If the iPhone5 looks like iPhone4 even if it packs a punch inside, it will not gather the kind of buzzshare it needs to propel itself further than the success of iPhone4. Apple needs a game changer and they know it.

Apple is not expected to launch an LTE phone this year given the infancy of chipsets that currently support the technology and the lack of network coverage. A dual core processor is no big deal given every phone listed in this post is a dual core beast with upto 1GB RAM. Apple has done wonders with their battery optimizations and is expected to carry that into its future generation products. But otherwise, every spec line has been beat. The Retina Display was awesome when it launched in 2010 but other displays are cool today. A 720p display would be a game changer but will prove expensive. The iPhone4 camera is excellent but current smartphone cameras are good if not better in terms of what they can do.

There are rumors of Apple building 2 iPhones, one for mid-end consumers and one for the regular $199 iPhone user. But there are conflicting reports on the veracity of it. Tomorrow’s announcement will confirm if Apple takes the Android threat seriously enough to launch two products or continue to stick to the one fits all mantra.

While it is easy to think that Apple will continue its blockbuster sales with iPhone5, it is getting harder to keep the crown of the “best device” on the market. Personally, I am hoping to get an iPhone5 if it satisfies the following criteria (beyond the obvious-thin, sleek and cool which is an Apple hallmark).

1. Dual core processor (given that the iPad2 has a dual core A5, I can take this for granted) with performance on par or better than the Exynos on Galaxy S2.

2. New design. I am not a big fan of the iPhone4′s looks plus it is 14 months old. So I am looking for something new. If Apple does a 3G->3GS style under the hood transition, count me out. Plus, I dont want to have a phone that looks like what everyone else has. In the cool world, iPhone4 design is well beyond passe.

3. Screen size of 4 inch or better. I am not looking for a 4.5 inch beast but would very much like an upgrade to the 3.7 inch iPhone4. 3.7 was cool a year ago. 4 inch is a must today for smartphones aiming to capture serious data users.

4. Better RF performance than my 3GS or my friend’s iPhone4. Before everyone gets on the blame ATT bandawagon, let me state this clearly. My wife’s Sony Ericsson 3G flip-phone has much better RF than iPhone 3GS or iPhone4. iPhone4 performed better than the 3GS but still not on par with many others.

In related developments, Sprint is said to be betting big, as much as the company itself on iPhone5. Facebook iPad app and an accompanying HTML5 store is also expected to launch tomorrow.

We are less than 24 hours away from Apple’s official unveiling of iPhone5. Since I am due for a phone upgrade, this is an exciting time. As a mobile enthusiast, I am also waiting to see what Apple brings to the table this time. They have been strong innovators in the past and I have no reason to believe they will give up on that anytime soon, Jobs or no Jobs at the helm.

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