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Does S stand for Spring?

John Sculley:

“I think they’re going through a very significant change now in terms of product cycles,” Sculley explains. “Traditionally Apple introduces products once a year; now it’s really introducing products twice a year. The complexity of that from a supply chain is immense, and Apple seems to be doing it well. So, I think that people are underestimating just how well Apple is run, and just how successful the company can be when it gets to that twice-a-year product introduction cycle.”

Former Apple CEO John Sculley: Apple is well-run | TUAW – The Unofficial Apple Weblog

Suggesting that Apple is moving to a semi-annual cycle is a very provocative thing to say, but it’s something I’ve also speculated is happening during a Critical Path podcast.  Sculley’s comments prompted me to weigh the possible evidence that this is happening:

  1. All of the major products which Apple sells have been updated in the Fall. This is unprecedented. Not only were product launches scheduled in the spring, historically they had been spread throughout the year. The odds that they happen to coincide by accident are nil. Not only that but the move of iPad and iPhone and iPod and MacBook and iMac to launch all within Fall (once a year) seems risky because it leaves a vast gap for competitors to fill six months hence. Indeed, given the iPhone’s launch predictability, many (most?) competing products already target launching in the Spring.
  2. Launch ramp for iPhone steeper than ever. The number of countries and operators launching the product in the launch quarter is nearly the entire distribution list. This is also the first time this has happened. Not only does it imply a very steep ramp, it indicates no channel fill will be happening past Q1. There will not be incremental sales to unserved customers as the fiscal year wears on. 
  3. Consumer anticipation. This year saw two quarters where sales were soft due to “product transitions” as awareness among the mass market of new product rumors caused growth to dry up. Too many potential buyers are now conditioned to wait for fall to buy iPhones thus sapping demand for half the year. Apple ends up with an inability to meet demand for half the year and a sales lull for the other half. Clearly this is suboptimal.
  4. Hon Hai production has shifted to locations closer to the sources of labor. This may not seem to be relevant but we have to appreciate that Apple makes up nearly half of Hon Hai’s sales volume and hence labor demands. Until this shift, Hon Hai’s production has depended on migrant labor which is difficult to manage. Moving production so that the labor is local means a steadier workforce with better economies from learning curves. However it also requires a more stable order book. Production for Apple has tended to be “bursty” with breakneck round-the-clock crush followed by periods of idle time and re-tooling. This is not only inefficient but it also creates strain and stress and lowers morale.
  5. Capital Expenditures de-coupled from volumes. This is a weak signal at this time and needs confirmation, but capital expenditures seem to be outpacing production. The recent bursts in CapEx may be transient or may have to do with tooling-up Samsung’s replacements but it may also imply a move to a more rapid product cycle. A transition to a new operating model would require significant over-spending in advance of the shift.
  6. Rumors of 5S products in pre-production. This is the least valuable piece of evidence but it might indicate that the “S” variant is targeting spring launch. I should point out that the “facelift” model change is common practice at many phone companies. At Nokia the convention was to launch an “i” variant to a model before a bigger update. Even at Apple, the iPod was going through a re-fresh during February with a “Valentine’s Day” variant being released. Then there’s the case of the white iPhone 4 which seemed to take forever to launch but finally did so into an April time frame. Finally we just saw the iPad retina product go through a six month cycle.

Admittedly, these are circumstantial pieces of evidence but they do corroborate Sculley’s claim of a six month product cycle.  Put another way, if Apple is not switching to a six month cycle then there seems to be a lot of stress for no benefit.

I would also add that this change in cycle time is an enormous undertaking. Since Apple is an integrated company, not only production but marketing, design, hardware and software engineering must be re-configured. To put it in perspective, when Ford changed its operating mode from producing one model to a flexible mass production method pioneered by General Motors, the company had to shut down for production for six months.

The operational aspects are daunting and would affect almost all employees in the company. Therefore if it is happening it’s also possible that there is some knowledge of this change dissipating outside the company, perhaps explaining Sculley’s confidence in the claim.

Looking for more information on the renaissance of production and its the effect on the technology industries? Then come to Asymconf and take part in the debate.

  • http://twitter.com/lacke Stefan Laketa

    Is it possible that Apple sees the iPad as more important and profitable in the future considering the post-PC era, that they actually want the iPad release in time for the very important Christmas season? And to focus more on it, they have to move the iPhone release to the spring.

    • http://twitter.com/xcoatl Beto Borbolla

      This will make sense to fill the six month lapse. Then you will have two major time-frame releases:

      1) iPhone + iPod refreshment and
      2) iPad + Macbook/iMac refreshment …

      Still you need to resolve the “product transition” problem Horace talked about … and the pressure will get worst from Samsung & Nokia pushing new models to the market at increased rate under the “our-products-contain-more-innovation-than-yours” catch-prase …

    • Tatil_S

      iPhone has far better margins and smartphones are as big a part of post-PC era as tablets, if not more, so I’d say iPhone will be paid more attention for a good long while.

    • Shane77

      Inevitably, the iPad will become the worlds most successful product within a year or so and dwarf the iPhone. Watch this Christmas quarter for the winds to start shifting.

  • obarthelemy

    I think now that tech gadgets have resolutely moved into average-joe markets, it’s time for consumer tech companies to do what that car industry has always done: yearly product releases, towards the end of the year, so you can get a “iPad 2013″ for christmas 2012.

    If technology is still monving fast enough to warrant more updates, a refresh in late spring, for the back-to-school season, seems logical too.

    It’s high time marketing, not tech, defined when products are launched.

    But please, get rid or the nerdy incomprehensible names (Sony !), and of the obscure confusing ones (Apple ! which iPad is that already ?)

    • Walt French

      @obarthelemy wrote, “it’s time for consumer tech companies to do what that car industry has always done: yearly product releases, towards the end of the year…”

      I don’t get it. The yearly product cycle allowed the manufacturers to shut down production during the summer for re-tooling. Then sales were strong for a few months, with the best-selling lines getting a couple of shifts to keep the factories utilized for required production levels.

      That is absolutely NOT the optimization strategy for 2012 computers. Constant technological advances, cutting-edge technologies that might have kinks worked out after they’ve been programmed into new models (e.g., IGZO), global manufacturing for countries with multiple calendar patterns…

      Even long-lived, less-complex, lower-end consumer products such as the iMac. Somebody must’ve looked around and determined that having a “fresh” intro date helps tip sales your way, all else equal.

      Apple has had several markets (iPods; all-in-one desktops; ultra-light laptops; touchscreen smartphones; ultraportable tablets…) all to itself, often for periods of years. But these markets have matured remarkably quickly and if Apple is to keep its lead, it will have to step up innovations in terms of model definition.

      • DesDizzy

        I think a point that should be mentioned, and has been mentioned by Apple, is the student/college buying in the spring/summer. It therefore make sense for Apple to have two release seasons. One for schools/colleges in the spring (Q2) and one for the XMas/fall buying season (Q4).

      • Relentlessfocus

        A gentle reminder that the school year starts at different times around the world and the USA is only 1/3 of Apple’s sales and shrinking relative to the whole.

      • DesDizzy

        Not an expert on these matters but I think the school year in US/Europe is about the same and these markets account for 75% of Apple sales….

      • Relentlessfocus

        A bit tricky really, Apple reports The Americas + Europe at around 55%-60%, not 75%. But South America is lumped into that and generally school starts in jan/Feb, with Brazil (feb) a major Apple target going forward. Europe revenues are flat to shrinking and Apple’s biggest rapid growth area is China where I think its aug-sept. but Japan and other SE Asia counties its the spring. India I think is sometime late autumn but may vary between states.

      • addicted4444

        From personal experience, the beginning of the school year in the US, Europe, and India is all within the June-September season. According to this post (http://answers.yahoo.com/question/index?qid=20100710084955AAwGRSR) the school year in China also begins approximately around that time.

        So the vast majority of Apple’s customers (indeed, the vast majority of people in the world) the school year begins in this time frame.

      • JohnDoey

        iMac is actually a high-end consumer electronics product. And iMac has almost no competition. At $999 and up, almost every computer that is sold is a Mac. The main competition that iMac has are the MacBook lines. So it is probably not a good example to use across Apple’s iOS products.

      • Walt French

        @JohnDoey wrote, “One mistake I think you are making is you are equating more releases with more innovation.”

        No, I actually was trying to say that for sales purposes, it was better to have a period with a median age since introduction of 3 months, rather than 6. I won’t claim that doing so is free; it would vastly complicate the integration of new features.

        But if design, services and integration are indeed Apple’s strengths, they should try to bundle even more of them into its releases, to protect its market position and to advance the art. Maybe more frequent releases would indeed be an outcome (not cause) of more innovation.

  • http://www.isophist.com/ Emilio Orione

    When followers come close, accelerate.
    For the phone products.
    Noteworthy is that operators prefer to have continuously new models, apple wants to compete on that, while I don’t think it is a good thing for end users, most of them with a two years contract.

    For the computer products (ipad too)
    A one year release keep apple always with older specs, except a few months after release. A six month release will be almost devastating for competitors, very few will be able to keep up.

    • JohnDoey

      For a few years, Sony Walkman was always the most popular music player sold in August, because that was the dry month before a new generation of iPods came in. I think you are right if Apple can move more quickly it will be very hard for competitors.

      I think carriers will get less and less important going forward, and also, they are going to have to morph a little more into computer stores as people move from majority Wintel systems to majority iPads and start looking at full-face touch screen phones as mini-computers more than phones. Carriers are going to have to start selling more on what you can do with the devices that isn’t just calls and texts. The further you go down that rabbit hole the more it leads to the Apple Store and consumers who buy a device and then in 2 years, replace it with a newer version of that same device, not this fiasco where you give the user a totally different device every 1–2 years and all they end up doing is calls and texts.

      • http://www.isophist.com/ Emilio Orione

        Actually I agree, but for this to happens apple’s business model has to change too, since nowadays subsidies are what makes the iPhone dominate the earnings.
        Without operators, without subsidies, the cheap iPhone (an ipod touch with a sim) should be dominant in sales.

      • http://twitter.com/handleym99 Maynard Handley

        This is nonsense. Subsidies are something CARRIERS want, not Apple, not customers.
        Carriers like subsidies because the extra payment on your bill representing the subsidy keeps being paid no matter how long you take to upgrade your phone after your contract runs out.

        If carriers WERE actually to give up subsidies (or if carrier alternatives like MVNOs were to become more dominant) it would be trivial for Apple to simply spread the cost of the phone over two years, at which point the only question of interest is — does the monthly billing happen through iTunes, or does Apple make a deal with the carrier and have it appear on the cell bill.

        Look at T-Mobile for an example of this model in action. If you ask me, T-Mo is adopting it not because they love consumers, but because they are desperate and this is their Hail Mary pass. IF it results in a substantial flow of new customers to T-Mo, expect to see it copied. It’s too soon to tell until T-Mo do their full frequency cutover; but my guess is that it won’t result in a massive flow of consumers to T-Mo. Maybe enough to keep T-Mo alive (which is, of course, what they want), but not enough to put any fear in ATT or VZW.

      • http://www.isophist.com/ Emilio Orione

        You say it’s a nonsense but your reasoning it’s like mine, if subsidies cease to exist (T-Mo is successful for instance) apple does have to change current business model.
        You say making subsidies itself, that could be, they already do something like that for computers with a financial partner, but I believe an iphone mini will be made too to meet low cost without subsidies demand.
        Think of it, if T-Mo model wins and subsidies will cease (I know they are in operators’ interest, but operators will do what the market want) there will be an high demand of phone without subsidies, substituting the operators with a financial partner and continue to sell with subsidies will not meet that demand. Apple will be the only one in market with an high price phone, they will have to create a cheaper model to meet demand and believe me, the model has been already done, they will push it out if or when needed.

      • Shane77

        Apple’s not going to make a crappy phone sorry

      • Shane77

        Genius, all it takes is to do the math, you are so correct Maynard! T-Mobile may be able to crush some of those competitors when they get the iPhone six unsubsidized and a fully functional LTE network. I’ll take my 32 GB at $300 down and $20 a month payment, with a $40 a
        month lower phone/data bill, thank you very much

    • Shane77

      Can people buy Apple products for the specs? Or did they buy them because they work as intended?

  • PH

    also see #7 of this post as another small reason to move cycles.

  • PH

    http://q10a1.blogspot.com/2012/10/ipad-mini.html

    sorry, no link. Meant #7 of this post.

  • def4

    There are other ways to explain the recent product updates and the key reasons are the switch to 32nm chips and the A6 SoC.

    iPhone was updated on the usual yearly cadence and was the first to get the A6 because it needed the improvements the most, it is the most profitable product facing stronger competition.

    iPods were updated on the usual yearly or bi-yearly cadence.

    iPad mini was launched at the perfect time to launch something that makes an excellent gift and also well after the supply of 32nm die shrunk A5 SoC became solid.

    iPad was refreshed after six months because the 45nm A5X SoC it shipped with in the spring was barely accurate for the task of powering such a huge resolution display.
    Under normal circumstances Apple wouldn’t have cared much about this, but because A6X is smaller than A5X and the 32nm process is fully scaled, A6X may well be cheaper to make than A5X.

    iMac was late, very likely delayed by the new design and new screen.
    Mac mini was also late, probably held back to prevent it from stealing sales from iMac.
    MacBooks were NOT refreshed recently, but at the beginning of summer hitting their usual back to school season target.

    • JohnDoey

      13-inch MacBook Pro with Retina is new.

      • def4

        Indeed it is.
        I suspect it had to be introduced later than its bigger more expensive brother due to production yields and marketing considerations.

    • PapayaSF

      Mac mini was also late, probably held back to prevent it from stealing sales from iMac.

      Apple shows little reluctance to cannibalize their own products, so I suspect there was some other reason.

    • Shane77

      I like it, only problem with it I have is my iPad 3 seems to be operating fine with that chip!

      • def4

        Of course it is, the chip is perfectly capable of handling the iOS UI at that resolution.
        There is a slight performance drop compared to iPad 2 noticeable in apps that use animations like page turning.

        The big difference is that the same top 3D games that render at native resolution on iPad 2 do not do so on iPad 3 because A5X cannot keep up.
        A6X can.

  • r.d

    iPad is not going to be updated until Rouge (Summer).
    Rouge needs new OpenGL ES which means new IOS.
    Haswell is not out until Summer.
    No new processor tech in the horizon.
    No new ARM tech in the horizon.
    Only new Mac OS X can be previewed in Spring.

    new iPad will required new Screen Tech and smaller battery.

    • Walt French

      @r.d wrote, “No new processor tech in the horizon.”

      Curious about the insights of your sources here. Care to link to any of your previous posts documenting Apple’s major switch to proprietary design of the A6X?

      • http://twitter.com/handleym99 Maynard Handley

        I think a better question to ask is: what COULD Apple do to make this interesting? The obvious (realistic) answers are:
        – IGZO displays

        – A7 as basically an A6 with one of either 64-bit support or hyper threading. Both of these could be slotted into the basic A6 design without too much pain. Bothe of them are not essential, YET, but the sooner Apple gets 64-bit support out there, the sooner they can transition the whole infrastructure (iOS and 3rd party apps) before the 2 and 4G limits start causing any user and developer pain. Hyperthreading is more of a reach, but it’s a way to counter quad-core specsmanship without having to pay too much of a price in area.

        – Apple announcing their own custom-designed WiFi or cell chip. I have no idea of the likelihood of this. The obvious win is that Apple gets to improve things on its schedule now, not Qualcomm’s or Broadcom’s, and they can omit from the chip whatever random crud they think they don’t need. The obvious problem is that designing such chips is hardly trivial — but then who expected Apple to get into the CPU designing business?
        One could make the same statement wrt GPUs, but that seems a less pressing issue in terms of Apple’s need for differentiation.

        For all three of these — who knows what the relevant time frames are?

      • Walt French

        Not just what are the relevant time frames…how will these technologies give Apple some clear advantage? They already have maybe a 30% advantage in using native Objective C vs (very well) interpreted/JIT’d Dalvik, so why do they need some huge hardware edge?

        Put another way: Apple’s advantage is supposedly in design, OS, software, ecosystem… why try to carve out an advantage on something where you have only so-so capability, when you can exploit something where you get huge ROI? I get that Apple needs to control its own destiny. Beyond that… ???

    • JohnDoey

      What you are thinking of as the “next release” could be the next release plus 1 if they are moving to 2 releases a year — the next one could be a smaller update that does everything but move to the new OpenGL ES and new iOS.

      And we don’t know what tech is on the horizon for Apple SoC’s, which they design themselves. The ARM portion is only a minority of the die space.

      Apple have already announced that iOS and OS X are on yearly release for the foreseeable future. That doesn’t mean that they can’t ship a new hardware device with iOS 6 and then ship a new hardware device 6 months later with iOS 6.1, and then ship another new hardware device 6 months later with iOS 7.

      So gain, we don’t know with anything like the certainty that you are expressing.

      • mjtomlin

        “The ARM portion is only a minority of the die space.”

        There is no ARM portion on the A6… The CPU core is also designed by Apple and no one knows what their team is capable of delivering.

      • http://www.facebook.com/people/Shameer-Mulji/1685212657 Shameer Mulji

        Considering that the A6 / A6X are Apple’s first true custom processors and how well they perform, not only in terms of processing power but also power efficiency, we do definitely know what Apple’s team is capable of. And the future is bright.

  • http://www.lazyprogrammers.com Eugene Kim

    It might make sense to update internals mid-year, but would they be able to change the external design at a yearly pace? A twice-a-year update cycle would definitely reduce the “bursty”ness of device upgrades, although I still see a burst for a new external design revision.

    • JohnDoey

      Between 2006 and 2008, there were 3 new external iPhone designs, each one per year. The first was unreleased. They have done some radical iPod nano changes from year to year also. And Apple is like 3 times the size now that they were in 2008.

  • KirkBurgess

    A rather controversial hypothesis Horace!

    I think the iPad being updated maybe a one time exception to the annual cycle, to get some needed tech like the A6x & lightning connector, and to get it on a Xmas release schedule.

    Another thing is that a twice yearly update for the iPhone/iPad will start to create an increased amount of fragmentation (presuming they upgrade the SoC every 6 months.) Does a twice yearly cycle also mean we get 2 new versions of iOS every year?

    I think an alternative explanation for the twice a year cycle to consider is not 2 new premier iPhones every year, but 2 new iPhone products every year. I.e. a premier iPhone once a year (the iPhone 5S) and an additional iPhone product once a year (likely a different screen size – either smaller or bigger than the current 4″ model).

    As much as I loathe to bring up Samsung as an example, if you look at only their premier smartphones, they clearly have 2 very successful product lines which retail for a similar premium price that they update roughly once a year – the Galaxy S line, and the Galaxy Note line.

  • oases

    If true, I hope they don’t sacrifice quality for quantity, and by quality I don’t just mean the construction but also the artistry, the dedication. Haste can be an enemy of many things. But it makes me think of that old video of Jobs at the retreat with his NeXT employees where the others were basically saying that what he wanted couldn’t be done as quickly as he wanted it done, and Jobs was clearly very full of anxiety about whether the company could make it’s cash last long enough. He was getting angry and almost cracking the whip.

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  • neutrino23

    Maybe this is why they didn’t give the iPad a version number. If it will be refreshed twice a year it is always the “New” iPad. No need to wait for a yearly refresh.

    As Apple is in charge of all of the hardware and software they can work it out to make this schedule possible. This also gives them the chance to react more quickly to the market as long as it doesn’t mean a change to the shape which, presumably, would refresh more slowly.

    This might also help with sales outside the US. Horace mentioned in podcast that an October iPhone release meshes well with the Christmas and Chinese New Year gift seasons. Maybe a spring refresh meshes with some other countries?

    It would really be nice to smooth out product releases and get away from the spectacular once a year releases.

    • sgns

      I think for a company like Apple it is not possible to do product updates that are not clear improvements. If they have a huge batch of Improvements in the pipeline, then they might release them at full speed. But…

      But for me, as a non-expert, it seems mindnumbingly risky/complex to change the release cycle and yet manage last-minute trouble like the paint of white iPhones, iTunes or Maps turning out to not be well-cooked. And getting things like the paint of the white iPhone right is what Apple is about. So! :)

      • JohnDoey

        But Apple also has to ship double the units every year that they shipped the year before. That is what the demand is. So they have to adapt to that in some way. They not only are offering us the opportunity to buy a revolutionary product like the original iPhone and use it for 2 years, they are offering us a platform that we are part of for many device generations. That platform is growing very quickly. So as much as they have a commitment to making great products, they also have a commitment to making lots and lots of great products, in very, very large quantities, for many years, all over the world.

        So they have to do many things to grow. One of them may be moving to faster product cycles. That doesn’t mean quality has to go down, because Apple is also hiring more people, creating more infrastructure. In fact, quality and reliability can go up, because sometimes the way that generations get faster is you have 2 teams who are each doing a yearly generation, but 6 months apart, so that there is a new generation every 6 months. and they each learn from each other, and if something goes wrong with one team, they have a second team as a backup.

        They may have to do this to avoid the kind of bureaucracy that mortally-wounded Microsoft and led to them basically only doing maintenance releases of their 1980’s and 1990’s products during the 21st century. If you have a team of 8 and it has to do double the work, it is actually better to have 2 teams of 8 than one team of 16. The team of 16 will get less work done than a team of 8. The 2 teams of 8 have a chance to get double the work done.

        So Apple has to deal with its growth somehow. It can’t not change.

      • neutrino23

        “I think for a company like Apple it is not possible to do product updates that
        are not clear improvements.”

        It is an interesting question. I’m not really picking sides on this issue. It would be an interesting notion to think that Apple devices are seeing frequent updates so that you never have to worry about buying something out of date. (Unless you are neurotic and can never purchase something because you now a better one is just months away!)

        I agree, that issues like changing paint or case shapes won’t be done often for the reason you state. However, why not change memory, processors, batteries, screen technology, antennae and such more often than the case? It might be easier for the production engineers and workers to introduce these changes a few at a time rather than all at once.

  • JohnDoey

    It sure feels like yet are doing that.

    Not just from what we have seen, but also it just feels like an Apple plan.

  • http://twitter.com/ankleskater Ankle Skater

    This makes good sense. It could also explain the management moves being justified as a necessity for improved collaboration within the company.

  • BjornSM

    The current iPhone 5 doesn’t support most of the European LTE frequencies especially, probably because Broadcom couldn’t come up with chips that could support the entire huge mishmash of bands used worldwide in time for the iPhone 5 release.

    I suspect the driving feature of the iPhone 5S this spring will be support of these bands, to allow Apple to market the iPhone effectively in countries where the 3G bands are completely choked with data traffic.

    • http://www.sequence-omega.net Anthony

      The iPhone 5 uses the RTR8600, which supports up to 5 LTE bands. Right as the iPhone 5 was released, Qualcomm made available the WTR1605L which supports 7* LTE bands, but likely couldn’t supply Apple with adequate quantities (other cellphones, like the Nokia Lumia 920, contained the chip and were released a month or so later). The WTR1605L RF front end will allow Apple to support both the 800MHz digital dividend as well as 1800MHz which is were LTE is being rolled out now in Europe.

      * some limitations apply – 3 bands below 1GHz, 3 bands between 1Ghz and 2.2GHz, one band 2.3GHz and above

      The models would look like so…
      US GSM (AT&T, T-Mobile USA): 700L, 850, 900, 1700/2100 (AWS), 1900 (PCS), 2100, 2.3GHz (WCS)

      US CDMA (Verizon, Sprint): 700U, 850+SMR, 900, 1700/2100 (AWS), 1900 (PCS), 2100, 2.6GHz

      Worldwide GSM: 800 (DD), 850, 900, 1800, 1900 (PCS), 2100, 2.6GHz

      • http://twitter.com/handleym99 Maynard Handley

        The dark horse here is how fast Intel can turn Rosepoint into a real product.

        Rosepoint is a complete digital radio (including the RF filtering) and so can handle essentially any carrier frequency you like. Intel claims their current research silicon is power competitive with existing hybrid (analog+digital) solutions.
        It is possible that the hassles imposed by this mishmash of frequencies will be largely a solved problem in two years or so.
        (There will still be a need for an antenna that can handle the different frequency ranges, but maybe that can be solved through antennas with multiple pieces of metal connected by transistors that make/break connectivity?)

    • JohnDoey

      When iPhone 4 added support for CDMA, it did not become iPhone 4S. It wasn’t until the SoC changed that it became 5S. The S is for speed. Adding more LTE bands is not adding more speed.

      There may well be an iPhone 5 with European LTE bands this spring, but I don’t think that is what we are talking about when we say there are rumors of a 5S this spring. We’re not just talking about a spring hardware revision, we’re talking about a 5S — by that we mean an iPhone 5 with a next-generation SoC inside, an A7.

      I don’t see how Apple would attach a new 5S name to a device that was just an iPhone 5 with additional LTE bands that only Europeans would even care about.

      • ChuckO

        “Adding more LTE bands isn’t adding speed”. Hmmm, actually it is. It isn’t adding processor speed but it may be more important to have download speed.

      • http://www.facebook.com/people/Shameer-Mulji/1685212657 Shameer Mulji

        JohnDoey is right. Apple’s only added the S variant when it’s updated the processor inside the iPhone for faster CPU & graphics speed.

      • Shane77

        I like to think the S in 4S stands for Steve since it was premiered the day before Steve Jobs died. 4S, For Steve. Or for that matter, how about Siri?

  • addicted4444

    I agree with this, and have been expecting it for a while. However, I believe the mid-year upgrade will be slight (basically, moving the processor to the A*X variant, and fixing minor bugs, like the iPhone 4 antenna design, which are discovered after release). Software releases will continue to be annual, since 3rd party developer support is integral to SW, and it is absolutely unlikely that they will burden developers with biannual OS releases.

    It seems to me that the iPad refresh was a test of their ability to manage this, and the lack of any SW issues related to the new new iPad probably means that their HW and SW are decoupled enough that the SW should largely “just work” with the mid-year cycle variant of the iPhone/iPad.

    Additionally, with Apple’s ability to continue to sell 2-3 year old models of the iPhone in large numbers, albeit at a lower price point, they will have more than enough time to recoup investment costs despite the quicker model updates.

    Relatedly, with Apple pushing unibody designs throughout the product line, (and this is a layman opinion), I would imagine radically changing designs probably requires less machining investment than earlier manufacturing methods did, because the unibody design probably only requires a SW update to the machining tools to change the finished product out of a brick of metal, further easing costs of changing designs rapidly.

  • AugustTechnophile

    I believe this is the beginning of the Tim Cook persona realizing itself within Apple. It means using the efficiency of the Apple organization, and not just the products, as a weapon against their competitors. I believe it will manifest itself as Intel like Tick-Tock strategy but on a much faster schedule: fall new product, spring new specs/refinements of those products. It will be very difficult for their competitors to organizationally adjust to this new pace. It’s as if the guy ahead of you in a marathon suddenly starts taking two steps for every one that you take. Samsung might be able to copy Apple’s products, but can they copy the fast paced Apple DNA embedded within the organization? That is much, much harder.

    • http://www.facebook.com/people/Shameer-Mulji/1685212657 Shameer Mulji

      Sucks for consumers. They’ll be confused when to buy. At least before there was some level of predictability.

      • http://www.facebook.com/people/Thomas-Wolf/100000749466286 Thomas Wolf

        It doesn’t have to be confusing: if carriers continue to subsidize phones (unlike others, I don’t see that model going away anytime soon), customers will get whatever the new model is at the time their contract renews. One might even say that it’ll be LESS confusing to the customer because they don’t have to face the current quandry of whether to wait, with expired contract, until the new/better iPhone comes out or to get the current, “stale” one…..it’ll be like cars: it’s “stale” as soon as you drive off the lot – and people will be fine with that, I think. If subsidies go away, then people will choose cell phones based on capabilities and a more frequent upgrade cycle will make it less likely that Apple’s old technology gets compared to the newest tech available from competitors.

        I’m not sure why someone commented that competitors won’t be able to keep up: it seems to me that Apple is currently not keeping up! Samsung is already introducing new model cell phones every other month, it seems. That is why the Galaxy S3 was having such a field day – because people compared it to the iPhone 4s and it was just so much better, it wasn’t even funny. If Apple could come out with a new one every 6 months, the differences in tech will not be as pronounced and people will more likely go Apple’s way because of secondary benefits of owning an Apple iDevice (bigger ecosystem and better integration among iDevices).

      • Shane77

        The iPhone 4S has outsold the Samsung galaxy three you speak of 5 to 1. You do realize that even though Samsung is selling more phones than Apple those aren’t all Samsung galaxy threes don’t you?

    • Shane77

      Isn’t Apple going to have to get someone other than Samsung to make their processors in order to do this?

  • NobodyImportant

    It could also be that they’re getting their ducks in a row in terms of preparing for brand new products or product lines, ones that don’t necessarily have to meet school or Christmas release windows.

  • http://claes.com @claes

    Apple will release the iPhone 5S a week or two after Samsungs press conference about the Galaxy S IV at MWC 2013 but a week or two before Samsung actually ships the Galaxy S IV. Samsung (and others) will compare specs with the iPhone 5 and not the new 5S.

    Apple did this with the iPad 2.

    • Shane77

      Damn, that would just be pure mean of Apple!

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  • bregalad

    Frequent small updates smooth out demand. If this month’s model is only marginally better than last month’s then there’s minimal buyer’s remorse and minimal waiting for the next great thing. For years the MacBook and MacBook Pro followed that formula. Today, however, the MacBook line gets one update per Intel product cycle (11-15 months) and the differences from one to the next are therefore much more pronounced. Customers are rewarded for waiting. Luckily for Apple they have so many iOS customers that they can afford to have bad Mac quarters.

    They cannot afford to have bad iOS quarters, either because people are waiting or because they can’t meet demand. For years they’ve employed annual updates to iOS products. There have been only two significant blips, the 16 month wait for the iPhone 4S and the surprise announcement of the iPad 4. If they are moving to shorter cycles it will be because they believe their old MacBook strategy of small incremental improvements to flatten out demand will be more profitable than fewer, larger steps.

    The problem is implementation. If they had to switch the entire supply and assembly chain at once it simply wouldn’t work. It would cost too much and there would be too much down time. They have to be able to gradually shift production from old to new. In fact they really need the Intel model where one group concentrates on the tick and another independent group concentrates on the tock. The spring group would build last years spring model until demand slows to the point where most of them can move to the forthcoming spring model. Meanwhile the fall group is working 100% to meet demand for the current fall model and won’t even think about their new release until the spring group has released their latest and greatest.

    If Apple wants to go that way they need to make an announcement, they need to reset expectations because right now anticipation of new major version numbers is crazy. You can’t have half your manufacturing capacity devoted to making the 5S and planning for the 6S if the other half won’t be able to meet demand for the 6.

    If a mediocre iPhone 5S comes out in the spring of 2013 people won’t think “hey Apple’s moving to semi-annual small updates”, they’ll think “well this sucks, I’m either waiting for the iPhone 6 or I’m getting an Android instead”.

    Give us a roadmap Mr. Cook or you’ll never be able to escape inflated expectations and demand spikes.

    • http://www.isophist.com/ Emilio Orione

      No one gives roadmap of products in technology, the Osbourne effect is a real treat, and apple will never do a mediocre iPhone or they will loose the halo (they can happen to do it but not by choice).
      The only way is to maintain the same tick-tock as today with a major release 3g, 4, 5 and a minor but significant release 3gs, 4s diminishing the switching time from one year to almost six months.
      It will require to plan a major release every year, not every two years, and plan the s upgrade with renewal of significant parts (processor, camera, wifi) in the same time, production will start with both models already planned and lines will be converted from one model to the other as necessary.
      The software will also maintain the same speed, with upgrades every six months.
      It will not be an easy task even without considering the supply chain.
      If this can happen it will be the next big thing made by apple, it will be real innovation.

      • Jg

        Iam I greed with you brother is true

    • oases

      Oh, sit down.

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  • http://twitter.com/rosnow David Rosnow

    In terms of iPhone, I can see an argument for an update to consolidate devices to support more bands/carriers with fewer devices. Three handsets that don’t cover all the bases sounds unworkable.

    In terms of other devices, we’ll see. One thing that may be skew things a bit is the transition to lightening connector. I don’t think Apple would have updated the iPad so soon if not for wanting all of the line to be on the lightening connector. That forced the update there.

    I’d like to see Apple more aggressive with updates. Still at the same time, these rumors have kept my friend from buying a new iPhone because she wants to see what is next. We are only a few month’s into the 5’s cycle. That seems like a negative…

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  • Claude Hénault

    When you control both hardware and software, it behoves you to make software upgrades as important a part of your improvement cycle as the hardware: particularly when you are the only manufacturer to have browbeaten the carriers into accepting your upgrades without interference. For example, on an iPhone yearly cycle, you launch a phone and then, six months later, you launch a software upgrade that offers new features to magically turn your “old” purchase Into something new. You call it “The Excellent Phone That Gets Even Better After You Buy It”. You have, through a software upgrade that no one else can offer without carrier support, a new product. It just requires education about the importance and availability of software upgrades. Easy.

    Playing the hardware-only quarter-to-quarter competition game is nonsense.

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  • PapayaSF

    All of the major products which Apple sells have been updated in the Fall.

    The Mac Pro doesn’t even count as a “major product” any more? [Sheds tear]

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  • Shane77

    “Put another way, if Apple is not switching to a six month cycle then there seems to be a lot of stress for no benefit.”

    Though I don’t disagree with your premise. Who’s going through stress? Analysts rushing to find a reason Apple stock has declined since October when it’s pretty simple, Apple’s stock was up over 73% year to date when that started and the S&P was up 17%. The stock market made 0 gains last year by years end. People would like to end the year with some profits because of the irrational misunderstanding that their Capital gains taxes are going radically up. Short term gains are taxed at ordinary income rates already folks! If you just held the stock a year, the new long term rate is going to 20%. Stop selling and keep more of the $.

    • http://www.asymco.com Horace Dediu

      The stress I refer to is the capital expenditures and apparent need to ship so many units from so many product lines in such a short span of time.

      • Shane77

        Got it Horace, thanks!

      • Shane77

        I can see this shorter cycle for iPad. We’re already seeing it. It just intuitively feels too often for a new phone to me, perhaps a nine-month cycle?

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  • Strongbad

    “The S is for Sucks”

    • http://www.asymco.com Horace Dediu

      Delete.

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  • xiaozi

    I woud attribute the accelerated release schedule to the growing importance and competitiveness in Asian markets where Apple is getting most of it’s volume growth and has to compete against Samsung more than in the USA.

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  • Jason Merk

    from a business stand point the move to a 6 month product cycle is good for apple. When the product is new people will consider change from from a competing phone or tablet. for example if apple continued to release phones once a year in the fall and my phone dies in the summer, will i wait for 3 more months until a new iphone is released. No! so the customer is forced to make a decision of new phones from andriod or a 9 month phone from apple which might not look so new after 9 months. As the Andriod os continues to improve and handsets are getting closer and closer like the iphone, the appeal of a 9 month old handset is going to be less and less.

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  • http://malvasiabianca.org/ David Carlton

    This post made a lot of sense to me when you wrote it; it still does, but of course it didn’t play out that way. Still, from a lean point of view, shorter cycle times are always good, as is level loading.

    I’m currently thinking that, for this sort of hardware products, maybe cycle times shorter than a year don’t make sense, but it seems like the level loading argument still holds; one way to get at least some of the benefits of level loading would be to return to staggering the product launches for different families throughout the year. And I’m wondering: now that we’re seeing the birth of two iPhone product lines, do both of those really need to have new models appear at the same time?

    I’m no expert on this stuff, but it’s not at all clear to me that they do: it feels to me like you want to have a new model of the more consumer-friendly line available for Christmas / Chinese New Year, but it’s less clear to me that the gadget-freak line’s customers won’t buy the phone whenever it comes out. (And we could have the same thing happen on the iPad side: Mini in the fall, the larger one rebranded as “Pro” in the spring, say.)

    I wrote some notes on how that could play out here: ; it also feels like the difference in timing could potentially leave room for a bit more differentiation between the two product lines (in terms of both price and features), which is maybe a good thing?