All eyes on the iPhone 5C today

The experts will be watching more intently when Apple announces the prices of its the colorful smartphone

Apple just can't keep a secret these days. Experts expect few surprises after 'a thorough leaking of Apple's most likely plans.'

Apple just can't keep a secret these days.

"There's been a thorough leaking of Apple's most likely plans," said Ezra Gottheil, an analyst with Technology Business Research (TBI), on what Apple will unveil later today at an event on its Cupertino, Calif. campus. "But even without the leaks, there's not a whole lot of places to take the iPhone."

Six experts from six different research firms agreed that there would be few surprises from Apple, in large part because of the global sieve made up of Asian parts suppliers and ueber-aggressive bloggers.

"We'll see a lower-cost iPhone, in addition to the new flagship model," said Kevin Restivo, an IDC analyst, in an interview.

"No epiphanies here," admitted Charles Golvin of Forrester. "There will be an iPhone 5S that will be to the 5 what the 4S and 3GS were to the 4 and 3G, respectively: Same industrial design, new processor to boost performance, improvements to the imaging experience, apparently growing color options, plus some form of biometric in place of the unlock swipe."

All the analysts bet Apple will host a double bill by unwrapping not only the annual upgrade to what Restivo called the "flagship," but also a first-ever lower-priced iPhone.

Pundits have labeled the flagship as the iPhone 5S, a nod to 2011's iPhone 4S that followed the iPhone 4, and the cheaper model the iPhone 5C, with the "C" possibly standing for "color," as it's to come in at least five colors, some of them reminiscent of those in the rainbow-themed logo Apple ditched in 1998.

Because the iPhone 5S will likely feature the same exterior design as last year's iPhone 5 -- Apple typically refreshes every two years -- the analysts' attention will be squarely on the iPhone 5C.

That attention will be drawn not to the specifications of the lower-cost model -- or the number of colors -- but to its price. It's that, one of the few details that hasn't leaked, which will determine their appraisals of what will arguably be Apple's biggest strategic move in smartphones since it rolled out the original six years ago.

"It all hinges on what the iPhone 5C is priced at," said Restivo. "It has to create the lust for the newer model that it's done for the flagship. Apple has always succeeded by selling the latest and greatest. Even in emerging markets, where people would be expected to make the compromise [of buying older iPhones at lower prices], that's more important than Apple once thought."

The iPhone 5C will be a departure for Apple: It has never shipped more than one model each year. But a hard-charging Samsung and countless cheaper models from others, all running Android, have erased significant portions of the iPhone's global market share. Rather than continue to rely on selling older models at cheaper prices, its strategy for several years, Apple needs an all-new lower-priced iPhone to maintain growth and profitability -- to please Wall Street, which has hammered Apple's stock in the last 12 months -- by broadening the potential pool of buyers.

Other experts have argued that Apple needs a cheaper iPhone, one that can compete in the huge swaths of the world where carrier subsidies are rare or non-existent, to maintain its market share so that developers remain committed to the app ecosystem.

Apple must walk a fine line, everyone agreed: Price the iPhone 5C too low and it will cannibalize sales of the iPhone 5S flagship in regions like the U.S., Western Europe and Japan. Price it too high and it won't kick start more sales in places like China, India and Brazil, where ultra-cheap Android smartphones have grabbed large parts of the market.

Some analysts, like Benedict Evans of Enders, has said that price is really all that matters.

As far as price expectations, the experts concurred that $300 marked the lowest Apple will go -- and that would be aggressive -- but differed on the high end. Some thought that $400 was the most that Apple would demand for an iPhone 5C minus a contract, while others went as high as $500.

The price will be intensely dissected as experts and pundits weigh in on whether it will drive new sales, cannibalize the iPhone 5S, and move the needle against Android. Failure to impress with the price and the explanation for why it's entering what in reality is the mid-priced market, will be punished by observers, and most likely Wall Street as well.

So there's a lot at stake.

"This year's rollout is much more important as Apple has lost market share to Android since the last iPhone," said Patrick Moorhead, principal analyst at Moor Insights & Strategy.

Sameer Singh, an analyst who covers mobile technologies on his Tech-Thoughts website, echoed Moorhead. "I think this launch is much more important than last year's," Singh said in an email reply to questions. "iPhone shipment growth has slowed and ASP has been declining. Apple needs to jumpstart growth again."

Unlike his fellow analysts, Singh believed that Apple will rely primarily on new carrier announcements -- talk has swirled that China Mobile, that nation's and the world's largest, and Japan's NTT DoCoMo have signed or are near to inking agreements to carry the iPhone -- rather than on the success of the iPhone 5C.

"It is important because as the technology pace is slowing down and the addressable market is saturated, Apple needs to think where they want to go next with iPhone," said Carolina Milanesi, an analyst at Gartner. "Should they move their hero product role to something else and just improve their margins and share in the phone market? It seems that with an iPhone 6 not coming this time around they might just be doing that."

Milanesi, along with others, including Charles Golvin of Forrester, saw the focus today on the business side, not on the technology Apple reveals.

"Many talk more about market share but the issue is really more about margins and profitability," Milanesi said.

"I think there are more business questions like growth rate and margin than there are product and design questions," added Golvin in an email reply to questions.

If that's an accurate take on the post-game analysis it would mark a vivid deviation from the norm. Traditionally, Apple has wowed its fans -- and many observers -- with its technological acumen and glitzy new features, not price, which has not changed since 2008 when subsidies first became the foundation of Apple's business model, and enormous profits.

A technological song and dance won't be absent from today's event: Apple will trumpet speed increases and new functionality built into the iPhone 5S. Just as important, it will also highlight some of the changes, additions and enhancements in iOS 7. But attention on the iPhone 5C and its impact will be paramount.

Not that there's anything wrong with that. In fact, it's as much a sign of the smartphone market as of Apple, some contended. "This will be a reflection of the maturation of the market more than the device and the form factor," said Restivo. "It's a question of market evolution. Apple's hardest act to follow is always itself. But the premium pricing model is at a ceiling, and Apple won't solve the market share problem without [the iPhone 5C] at the right price."

During the event, which should last around 90 minutes if Apple keeps to past practice, CEO Tim Cook and other executives will be watched closely, not only for what they say, but how they say it, analysts said.

"It will be important to watch for the speakers' subtleties that explain away Apple's lost market share or perceived lack of continued innovation," said Moorhead.

Gottheil said much the same. "There's nothing specific I will watch for, but I will for the feel of the event," he said. "Apple has fallen into a defensiveness about its perceived lack of innovation."

As an example, both Gottheil and Colvin cited Philip Schiller's remark during June's Worldwide Developer Conference. When Apple's head of marketing introduced a radically-redesigned Mac Pro, he pointedly said, "Can't innovate anymore, my ass."

"Also at stake [today] are the continued questions about whether the company has lost its innovation edge," said Golvin. "I don't subscribe to this mindset but clearly the company hears these criticisms."

It's unlikely Apple will answer those critics today unless the event sports a Jobsian "One more thing" moment where Cook pulls an enormous rabbit out a hat.

Analysts want to be surprised too, and would love to see a "One more thing." But when asked what they would like to see that they thought they wouldn't, their wish lists were all over the map.

Moorhead pegged the long-rumored iWatch: "I would like to see Apple's vision of a wearable device that is very different from what Samsung and Sony are currently bringing to the table," he said.

Gottheil wanted a larger-screen iPhone that could compete with the "phablet" craze sweeping China and other Asian markets. Golvin asked for a redesigned iPhone 5S, not a repeat of last year's look-and-feel.

Some were less ambitious in their hopes and named things that were actually feasible. Milanesi, for example, wanted Apple to spend time showing services and apps specific for the iPhone 5C, including China-only services. "This will be a key differentiator over the cheaper Android devices," she said. "Ecosystem will still be a valued differentiator."

And Singh simply wanted lower prices than analysts have bandied about. "An emerging markets-only iPhone 5C for $299 and Retina iPad Mini for $249 would do the trick," he said, admitting that those numbers were extremely unlikely.

But don't figure on being blown away, said Gottheil, who lowered the bar. Apple will not suddenly morph into a cut-rate smartphone supplier or change its spots today.

"Apple has to live with their position," Gottheil said. "Theirs is that we're Lexus, we're not Toyota. The expectation that that will change is kind of crazy. But perception is very important. The company appears to be under fire, but it has a solid business and astoundingly loyal customers. I don't think there's anything they could do today that would turn around that thinking."

Apple will start its event today at 10 a.m. PDT.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, or subscribe to Gregg's RSS feed . His email address is

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This story, "All eyes on the iPhone 5C today" was originally published by Computerworld.

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