​Good ideas are difficult to come by, and smartphones are no exception as the competition for new features, both hardware and software is intense.  While Apple (AAPL) is not known to be as much of a hardware innovator as other smartphone brands, typically waiting for either real customer acceptance of a new technology, or holding out until they are able to offer something one level above a ‘me-too’ feature.  We have mentioned that Apple has added the ability to send an emergency text message through a satellite network in locations where cell service is not available, and Apple also added ‘advanced motion algorithms’ to assist users who have been in a car accident or more serious crash.
 
The system evaluates a number of factors and Apple has said that it has been trained over millions of hours of real-world driving and data from crash recordings to generate accurate results, and a recent test at 40 kph (~25 mph) did not generate enough momentum to trigger an alert, especially as the test vehicle did not roll over.  At 50 mph the driver dropped the Apple Watch out of the window to simulate a high speed crash and rollover, which triggered the emergency system due to the high impact and rolling motion sensed by the sensors, including a 3 axis gyroscope and an accelerometer that takes readings 3 time each millisecond and microphones that can detect a loud sound such as a crash, along with GPS data that can indicate a rapid change in speed.  All well thought out ideas and coordinated by the algorithm itself based on the data it has been taught.
 
What it did not learn was about roller coasters, where the speed and momentum vary considerably with the weight of the car and the point at which it is measured, but the world’s fastest coasters easily break 100 mph, with the Formula Rossa coaster in Abu Dhabi hitting 150 mph.  Speed alone is not the only factor to consider as momentum mis a function of speed x velocity, and accelerometers, gyroscopes, and similar sensors don’t know the difference between a 90 foot drop on a coaster at 30 mph or a car rollover, which has caused a number of iPhone 14 users to find that their phones have been dialing 911 while they were riding coasters at amusement parks.  The iPhone system, should it sense what it believes is an accident, sounds an audio and visual alert, and will repeat the alarm if the user does not respond in 10 seconds.  After the 2nd attempt the phone or watch will dial emergency services.
 
It seems this is happening to users on roller coasters and to the few individuals who dropped their iPhone 14s or Apple watches out of a moving car, with emergency services being confounded by the call upon arrival, but you can’t fault Apple for trying or for the application for misunderstanding the extremely rapid speed changes of a typical roller coaster.  Its likely going to be updated in another software iteration with a ‘turn off crash detection for 10 minutes’ function or if you must ride a coaster sooner, just give it to someone on line to hold.  We are sure they will be there when you get off the ride…
 
 

Last week we noted that demand for small panel (primarily smartphone applications) rigid OLED displays in 2Q was considerably below expectations (missed by 25.9%), coming in down 19.5% q/q and down 33.2% y/y.  Much of the small panel OLED demand shortfall came from Samsung Electronics (005930.KS) and Xiaomi (1810.HK), and has led to expectations for 3Q small panel OLED rigid demand to decline by 25.9% q/q and by 46.5% y/y.  While these are certainly concerning data points, we also noted that small panel rigid OLED displays are an increasingly smaller part of overall small panel OLED displays, falling to 38.6% in 2Q and averaging 40.1% in 1H after 2021’s average of 44.0%, which puts the focus more specifically on small panel flexible OLED displays for a better understanding of demand for the smartphone OLED display market.
Now that we have full demand data for small panel flexible OLED displays, we note that the results for flexible OLED displays in 2Q was only off by 1.9% putting 2Q composite small panel OLED demand 12.85% below expectations, not a great number but certainly better than the rigid miss.  As can be seen in the table below, while both Apple (AAPL) and Vivo (pvt) came in above small panel flexible OLED expectations, Apple represented 49.6% of actual small panel flexible OLED demand in 2Q and was the only brand that saw better than expected results in the composite, with the composite itself being down 13.6% q/q and down 3.4% y/y.

The weak results in 2Q and the ongoing macro challenges facing the smartphone market have brought down expectations for small panel OLED demand in 3Q although there is hope for a relatively small amount of q/q growth (3.4%), as shown in the table below.  While these expectations translate to a decline of 20.3% (composite) on a y/y basis Apple, Honor (pvt) and Huawei (pvt) are expected to see q/q increases, with only Huawei seeing a y/y increase, a result of the extremely poor results Huawei saw in 2021 due to US trade restrictions. 
All in, another weak quarter for smartphones continues to put a damper on small panel OLED growth, despite an increasing share of the overall smartphone market, with Apple the only substantial standout.  As the iPhone 14 series was announced on September 7, much of the 3Q actual results will rest on the new iPhone line’s popularity during the last 15 days of the month, and based on those results, Apple will determine it order rate for 4Q.  In 2020 and 2021 Apple increased orders q/q in 4Q (11.9% and 71.5% respectively) while the y/y increase was less than 1%.  While we expect Apple is optimistic about customer demand for the iPhone 14 series, we assume they will temper that enthusiasm a bit as the macro-economic situation  continues to weigh on consumer spending, which would lead us to expect Apple’s full year small panel OLED demand to be ~200m units, up 9.8% y/y.  Given that almost all of Apple’s iPhone models (old and new) are OLED, this gives a good approximation of Apple’s 2022 display demand, which should translate into shipments, less build and transport timing and existing inventory.

​Simply put, Apple (AAPL) has very stringent rules as to components and suppliers and maintains a list that can be the difference between a good and a bad year for suppliers. The most current list, which was recently updated, added seven Taiwanese companies while removing six, added four Japanese suppliers while removing five, one South Korean company was added, and two US companies were added while two removed.  While the list covers Apple’s suppliers primarily for 2021, the list is updated periodically.  Here are a few of those public companies that have been added and removed.  The full list is here.
Adds:

• Taiwan Surface Mount Technology – 6278.TT
• Wingtech – 600745.CH
• LX Semiconductor – 108320.KS
• Toyoda Gosei – 7282.JP
• Lattice Semiconductor – LSCC
• Power Integration –POWI

Removals:

• Jones Tec PLC – 300684.CH
• Auras technology 3324.TT
• Primax Electronics – 4915.TT
• Maxim Integrated Circuits – ADI
• Sumida Corp – 6817.JP
• TK Group – 2283.HK

 
 

Apple (AAPL) did a bad thing when it released iOS 10.2.1 on January 23, 2017.  The operating system update contained code that the company had added to reduce complaints of battery-related shutdowns on the iPhone 6s, and while the update did reduce the shutdowns by ~80% it did so in a way that reduced the phone’s performance.  When the iPhone 6s was operating with weak batteries, processor intensive operations would push the previous OS to provide the necessary power to the CPU but the weak batteries would sense the excessive draw and signal the OS to shut down before the batteries would be fully depleted.  The ‘fix’ in iOS 10.2.1 now told the CPU not to perform those functions at full speed but at a slower rate, drawing less power from the batteries and no longer causing a shutdown.  The fix worked, but it also produced a noticeable slowdown in iPhone performance and by the end of 2017 Apple was apologizing for the undocumented change and lowered the price on replacement batteries as a way to assuage user ire.
Unfortunately for Apple, iPhone fans were not satisfied by the apology or cheaper batteries and the internet was then consumed with #batterygate, creating a class action lawsuit that was brought against the company for not disclosing that it had slowed iPhone performance without informing users.  The suit was recently settled with each complainant to receive ~$25, with Apple’s total cost of ~$500m.  The company was happy to close the book on an embarrassing event that caused considerable damage to its reputation and legislative focus on its consumer related practices, but the federal judge that ruled in the case was told by the 9th Circuit Court of Appeals that he must review the settlement again due to the fact that he applied the wrong ‘standards’ to the final award.  While the appeals court did not rule on the settlement itself, it cited the judge’s “presumption of reasonableness” as a misstep in assigning the fines and court costs.
While the legalese makes it difficult to understand the gist of the appeals ruling, it seems to indicate that the judge should not have assumed that the settlement was reasonable before he assigned court costs ($80.6m).  The settlement and award required a certification that the legal requirements of class member notification were completed, with over 95m class action notices sent to persons with potentially eligible devices.  However, those who brought the settlement to the appeals court believe that the notices, which were sent to all iPhones with a registered ID, did not cover the actual owners, as businesses could be owners of corporate phones purchased through carriers.  As Apple does not track corporate ownership of its phones purchased through carriers, the complainants allege that there were potential class action participants who were not contacted, and the appeals court agreed pushing the settlement back to the lower court.

​Of course, this next review will cost more in legal fees, court time, and draw out the settlement longer, but that is the price we pay for a legal system that strives to satisfy every possible legal argument, even if 99% of the potential class action participants were notified.  The few who did not like the settlement, particularly the legal costs assigned by the judge, have been able to hold off the final say in this long, drawn-out lawsuit, despite pretty much everybody else being satisfied.   Such is the state of litigation in the US today.   “Justice is justly represented blind, because she sees no difference in the parties concerned.  She has but one scale and weight, for rich and poor, great and small.” – William Penn

​In the past Apple (AAPL) has been criticized for its policies concerning the repair of its products, particularly iPhones, which had to be returned to the company or brought to an authorized Apple service center at considerable expense.  Opening an iPhone as a user would invalidate the warranty and cause even more expense for repairs.  Apple did not supply components for repair to non-Apple repair centers and used a number of screws and other connectors that were not typically available, making it quite difficult for sources outside of the Apple world to make such repairs.  Apple’s theory behind these rules was to guarantee that all repairs were done with quality replacement parts (supplied by Apple) and that the quality of the work met with Apple’s rigorous standards, and to a degree that was true, but the underlying factor of channeling all repair work to Apple-related entities to capture incremental revenue, was hard to ignore.
Last year Apple agreed to loosen it’s strangle hold on the repair of Apple products, as we mentioned in our 04/28/22 note which indicated the availability of Apple repair manuals, tool kits, and parts, allowing almost anyone willing to pry open their iPhone, a shot at fixing a dead battery, replacing the cracked screen or other more complex repairs if their warranty has expired and it seems that Apple really took the idea to heart with the iPhone 14 family, which has been completely redesigned to be ‘repair friendly’, although that only applies to the iPhone 14 Pro and iPhone 14 Pro Max, the upper-end of the iPhone 14 line. 
Recent teardowns of the new iPhone 14 family have revealed that Apple completely redesigned the interior of the iPhone 14 Pro and Pro Max, making them almost modular in that the two high-end models can be opened from the back of the device (last one that had that option was the iPhone 4s, released in October 2011), rather than prying open the device from the front.  The display and glass panel (rear) are held by only two screws and two connectors and are not glued  to the frame or other panels or held by a number of oddly shaped screws, some of which have been hidden, causing the necessity of removing other components.
iPhone 14 repair documents indicate that the iPhone Pro and Pro Max are essentially 3 layer ‘sandwiches’ consisting of the display, a mid-frame that contains most of the internal components, and the rear glass panel.  This means that the cost of repairing a cracked rear glass cover becomes far less expensive, and screen replacement should similarly be less costly.  Whether Apple passes that savings on to customers remains unknown as the company likely received considerable grief from its authorized repair members who no longer have the exclusive rights to repair Apple devices.  That said, the internal changes do not extend to the iPhone 14 and iPhone 14+.
While perhaps not as altruistic as it might seem on the surface, we certainly give Apple credit for making these changes and following through on its promise to make repairs easier and more accessible.  Hopefully they follow through further next year with a similar redesign of the interior of the lesser priced iPhone models, but progress is progress and is worth commendation.
What the Matter with Matter?
We have written about the upcoming “Matter” connectivity standard a number of times over the last few years as it has the ability to be a unifying force between brands that will jump start the on-again/off-again smart home industry, which is in dire need of a reason for existence, other than to add to the human desire to become part of the living room couch for the bulk of the day.
The Matter platform, which is supported by literally hundreds of CE and associated companies, from Amazon (AMZN), Google (GOOG) and Samsung (005930.KS), to Ikea (pvt), Vodaphone (VOD), and Shenzhen SEI Robotics (pvt), will allow all devices that are certified by the Matter organization to interoperate.  In theory this would allow smart home devices, most of which operate on proprietary networks and protocols, to essentially control each other, giving consumers the ability to cherry pick products that fit their requirements, rather than have to stay with a particular brand for all.
We say ‘in theory’ because the Matter standards were due out last year, and again at CES early this year, but to data have not been launched.  Not surprisingly, there are rumors of infighting between members and factions over where the standards will go in the future, and despite the fact that lead members Amazon and Google have pledged to upgrade products to the Matter standard many companies are still promoting their own proprietary smart home platforms. 
The Matter undertaking is a large one, with hundreds of product types, models, and flavors in the smart home market, few of which are compatible. Which forces consumers to have a proprietary system for dimming the lights and another for programming the washer/dryer, which along with the increased R&D a system development cost, is the primary reason why the smart home business has not taken off, especially during the COVID pandemic. 
In fact it seems that the delays involving Matter have put such pressure on some smart home brands that a company like Lenovo (992.HK), a well-known laptop brand, seems to have decided to shut down its smart home products business.  Lenovo’s smart home products are smart plugs, smart power strips, smart clocks, and smart LED lightbulbs, along with a number of 3rd party products, which it has been promoting since 2017, but word from retailers is that the company is moving out of smart home products given the lack of traction in the space.
There are certainly a portion of the global population that could find significant value in smart home devices, as the simple tasks that smart home devices can accomplish are not easy for the disabled, but this is a relatively small market that is only attractive to niche brands.  For the industry to see real momentum it must be easy for consumers to use.  No separate controls for each device, no hubs for each system, and no high prices, all of which could become a reality if Matter or a similar unifying protocol becomes the way of the world.  But human nature seems to have taken hold in the CE space once again and put proprietary interests above those of the target audience, leaving those without strong financial support and R&D financing to slowly walk away from the space.  This is not the first time bickering between parties has stymied the smart home business, but the early momentum behind Matter was so strong that it seemed to be a possible solution for the smart home industry.  Now we just have to wait and see if the standard will actually be released before the current generation of potential smart home customers gives up.

​Four years ago the European Commission ruled that between 2011 and 2016 Qualcomm (QCOM) had paid Apple billions of dollars to gain exclusivity as the supplier to the iPhone and iPad product lines and fined the company $1b, leading to a very extended appeal process that seems to have finally ended. The recent ruling, which stated that “A number of procedural irregularities affected Qualcomm’s rights of defense and invalidates the Commission’s analysis of the conduct alleged against Qualcomm,” all leading to the conclusion that it was not proven that the Qualcomm payments reduced Apple’s incentive to switch to other suppliers during the 2014 and 2015 years.
The EU has been considering appealing the decision in Europe’s highest court, the EU Court of Justice, but it seems that EU regulators have decided not to appeal the decision, leaving Qualcomm off the hook for the $991m fine.  The current ruling left little in terms of room for an appeal, as the judges were considerably critical of the way in which the EU handled the prosecution, which was part of the EU’s crackdown on big technology companies that included a billion dollar fine for Google (GOOG) and investigations into the practices of Facebook (FB) and Amazon (AMZN).  Next week the General Court will rule on a challenge to the ~$4.4b fine also imposed on Google under the allegation that the company used the Android OS to keep competition at bay.

​As we have noted previously, there have been issues surrounding the production of displays for the iPhone 14 series this year, with questions as to BOE (200725.CH) status with Apple generally, and problems that LG Display (LPL) was having with the production of LTPO (Low-temperature Poly-Oxide) displays, which are used in the iPhone 14 Pro and Pro Max.  Given that Samsung Display (pvt) has been producing LTPO displays for a number of customers, including parent Samsung Electronics (005930.KS) since August 2020, they have considerable experience in that display production process and have supplied a number of smartphone brands with such displays, including last year’s iPhone 13 Pro Max.
According to recent industry estimates, Apple has ordered over 17m iPhone 14 units from its display suppliers through the end of August and is expected to order ~16.5m units this month.  With delivery dates of 9/16 for all models other than the iPhone 14+ (10/7/22) we assume the company expects it has sufficient inventory to meet pre-order deliveries that are similar to last year.  That said, Samsung Display ordered additional module process equipment last month and this month for its production facilities in Vietnam, with confirmed orders from at least three local Korean suppliers, AP Systems (265520.KS), HB Solutions (297890.KS), and Philoptics (161580.KS) totaling over $40m.  We expect that the popularity of the iPhone Pro and Pro Max, and the production limitations at LG Display, will skew SDC’s share of iPhone 14 family display share higher than expected, especially as they participate in the production of displays for all four models, although we expect the highest margins (and their biggest focus) is on the LTPO models, which seem to be getting most of the pre-orders (see “iPhone Sells in China Despite Criticism” above).

​Apple (AAPL) is considering adding memory products sourced from Yangtze Memory Technologies (state), a Hubei Province based company we have mentioned a number of times, particularly in reference to the company’s efforts to replace as much US made equipment in their semiconductor process fabs as possible with Chinese sourced tools (05/10/21),  our note on the investigation of China’s “Big Fund” management company (07/29/22), which has funded much of China’s semiconductor efforts, and Foxconn’s (2354.TT) attempt to purchase a 10% stake in Tsinghua Unigroup (state), which would give it more direct access to UNISOC (pvt) and YMTC (08/10/22).
While the company is not on the US Commerce Department’s ‘entity’ list, there has been some political discussion concerning the company’s ties to Tsinghua University, a state run institution that is said to have a number of laboratories that are researching defense related projects.  YMTC began producing 64 layer 3D NAND in 2019 and has moved to 128 layer using a 20nm node, but unlike SMIC (688981.CH) and Fujian Jinhua IC (state) the company remains off of the DOC list, with support from a number of global semiconductor associations (SEMI.org, SIA, ITIF, etc.), while a number of think tanks and Congressmen have suggested the company’s ties to the Chinese military should warrant its inclusion under the terms of the 2018 Export Reform Control Act.  Last month rumors surfaced that pressure from Commerce Secretary Gina Raimondo pushed congressional committees to examine the company, China’s largest memory producer, to see whether Congress would support its inclusion to the entities list.
Apple is said to be considering the company’s products for use in some iPhones assembled and sold in China, with no intention of their use in products that leave the Mainland, but members of the House Foreign Affairs Committee have suggested that “Apple will effectively be transferring knowledge and knowhow to YMTC that will supercharge its capabilities and help the Chinese Communist Party achieve its national goals.  While we expect that if Apple were to source NAND from YMTC, there would be some technical communication between the two, especially given Apple’s high quality control standards, but with much of iPhone assembly done in China, Chinese technology spies would already have access to much of Apple’s design technology, and could reverse engineer much of what exists in an iPhone, so the panic concerning Apple sourcing YMTC NAND seems a bit overly dramatic. 
From the perspective of broadly not wanting to help the Chinese semiconductor effort in any way, including the purchase of any components, adding YMTC to the entities list would slow the Chinse semiconductor industry’s growth to a degree, but the politics around anti-China sentiment, especially concerning semiconductors, seems to give politicians a platform that is hard to counter without seeming anti-American or anti-worker.  While there is certainly a very legitimate goal in not supporting the expansion of the Chinese military effort, Apple’s purchase of YMTC NAND flash is going to do little to move the needle in China’s ability to produce ICBMs and other military equipment.  If US politicians are so concerned about the development of China’s semiconductor efforts, perhaps a more unified vote (68 for/32 against) and less resistance to the recently passed CHIPs Bill would have shown China they have a cohesive adversary in the semiconductor space rather than a bunch of self-serving politicians.

  Alabama: Shelby (R-AL), Nay                  Tuberville (R-AL), Nay
 Alaska:      Murkowski (R-AK), Yea           Sullivan (R-AK), Yea
 Arizona:    Kelly (D-AZ), Yea                    Sinema (D-AZ), Yea
 Arkansas:  Boozman (R-AR), Nay              Cotton (R-AR), Nay
 California: Feinstein (D-CA), Yea              Padilla (D-CA), Yea
 Colorado:  Bennet (D-CO), Yea                  Hickenlooper (D-CO), Yea
 Connecticut: Blumenthal (D-CT), Yea        Murphy (D-CT), Yea
 Delaware:  Carper (D-DE), Yea                  Coons (D-DE), Yea
 Florida:      Rubio (R-FL), Nay                              Scott (R-FL), Nay
 Georgia:    Ossoff (D-GA), Yea                  Warnock (D-GA), Yea
 Hawaii:      Hirono (D-HI), Yea                  Schatz (D-HI), Yea
 Idaho:        Crapo (R-ID), Yea                    Risch (R-ID), Yea
 Illinois:       Duckworth (D-IL), Yea            Durbin (D-IL), Yea
 Indiana:     Braun (R-IN), Nay                              Young (R-IN), Yea
 Iowa:         Ernst (R-IA), Nay                     Grassley (R-IA), Yea
 Kansas:      Marshall (R-KS), Nay               Moran (R-KS), Nay
 Kentucky:  McConnell (R-KY), Yea           Paul (R-KY), Nay
 Louisiana: Cassidy (R-LA), Nay                Kennedy (R-LA), Nay
 Maine:       Collins (R-ME), Yea                 King (I-ME), Yea
 Maryland: Cardin (D-MD), Yea                 Van Hollen (D-MD), Yea
 Massachusetts: Markey (D-MA), Yea                  Warren (D-MA), Yea
 Michigan:  Peters (D-MI), Yea                              Stabenow (D-MI), Yea
 Minnesota: Klobuchar (D-MN), Yea           Smith (D-MN), Yea
 Mississippi: Hyde-Smith (R-MS), Nay        Wicker (R-MS), Yea
 Missouri:   Blunt (R-MO), Yea                             Hawley (R-MO), Nay
 Montana:  Daines (R-MT), Yea                  Tester (D-MT), Yea
 Nebraska:  Fischer (R-NE), Nay                 Sasse (R-NE), Yea
 Nevada:     Cortez Masto (D-NV), Yea       Rosen (D-NV), Yea
 New Hampshire: Hassan (D-NH), Yea       Shaheen (D-NH), Yea
 New Jersey: Booker (D-NJ), Yea                Menendez (D-NJ), Yea
 New Mexico: Heinrich (D-NM), Yea           Lujan (D-NM), Yea
 New York: Gillibrand (D-NY), Yea            Schumer (D-NY), Yea
 North Carolina: Burr (R-NC), Nay            Tillis (R-NC), Yea
 North Dakota: Cramer (R-ND), Nay                    Hoeven (R-ND), Nay
 Ohio:          Brown (D-OH), Yea                 Portman (R-OH), Yea
 Oklahoma: Inhofe (R-OK), Nay                 Lankford (R-OK), Nay
 Oregon:     Merkley (D-OR), Yea               Wyden (D-OR), Yea
 Pennsylvania: Casey (D-PA), Yea              Toomey (R-PA), Nay
 Rhode Island: Reed (D-RI), Yea                 Whitehouse (D-RI), Yea
 South Carolina: Graham (R-SC), Yea                  Scott (R-SC), Nay
 South Dakota: Rounds (R-SD), Yea           Thune (R-SD), Nay
 Tennessee: Blackburn (R-TN), Nay             Hagerty (R-TN), Nay
 Texas:        Cornyn (R-TX), Yea                 Cruz (R-TX), Nay
 Utah:         Lee (R-UT), Nay                       Romney (R-UT), Yea
 Vermont:   Leahy (D-VT), Yea                             Sanders (I-VT), Nay
 Virginia:    Kaine (D-VA), Yea                             Warner (D-VA), Yea
 Washington: Cantwell (D-WA), Yea                    Murray (D-WA), Yea
 West Virginia: Capito (R-WV), Yea           Manchin (D-WV), Yea
 Wisconsin: Baldwin (D-WI), Yea                Johnson (R-WI), Nay
 Wyoming: Barrasso (R-WY), Nay              Lummis (R-WY), Nay
 

​The iPhone is popular in China, although in most quarters, its share lags behind a number of Chinese smartphone brands.  The partial demise of what was China’s formerly best-selling brand Huawei (pvt) a result of US trade sanctions, has given Apple a bit of room to gain former Huawei customers as iPhone buyers, although other Chinese brands have also gained share for the same reason.  The lower price of the iPhone 13 have even more incentive to Chinese buyers when it was released last year but there is a certain status associated with the US brand in China and that is also a contributor to the iPhone’s success and share on the Mainland over the last two years.
That success seems to have continued with the recent release of the iPhone 14 line, which is available for pre-order in China.  According to numbers from JD.com (9618.HK), who hosts the Apple store, just 24 hours after the iPhone 14 line became available for pre-order, 2m orders had been placed, despite the fact that no price reductions relative to last year’s models were given.  In fact it was noted that some configurations were seeing mark-ups over standard pricing.  Significant was the fact that the two iPhone 14 models that the iPhone Pro Max and the iPhone Pro, the two of the four models that contain the new A16 Bionic chip and are the most expensive models, received the most orders, 1m and .8m respectively, while the iPhone Plus and the iPhone 14 models received only 10% combined.
This all comes as the iPhone 14 line received a lukewarm reception from critics, with little innovation, both from the technology and the design, from many reviewers, with which we agree.  It would seem that relative to Huawei’s most recent offerings, which do not offer 5G, the iPhone offers both more valued features and the cache of status to Chinese buyers, especially in the premium smartphone segment.  Complaints about the fact that Apple’s China site was slow or unable to process payments during the onset of the pre-order period seemed to create a bit of a stir, but the with that number of orders going through, roughly matching the popular iPhone 13’s first 24 hours last year, the site issues did not seem much of a deterrent.

The long-awaited Apple (AAPL) event’ took place yesterday, and while it was full of adjectives about the nuances the company brought to this year’s iPhone, if we had to characterize the overall iPhone 14 line this year, we would have to say that the changes were utilitarian rather than revolutionary.  That said, we summarize what we see as the noteworthy changes, if any, below by looking at the differences between last year’s iPhone 13 family and the new iPhone 14 family.
iPhone 14 – The iPhone 14, which is expected to be released on 9/16/22, will sell for $799, the same initial price of the iPhone 13 (128GB).  The size of the new model is the same as the previous one, other than being 0.1mm thinner and it weighs 2 grams less, so there is little to shout about here.  The 6.1” OLED display is the same as is the Apple A15 Bionic chipset, other than a 5 core Apple graphics processing unit as opposed to last year’s 4 core.  The cameras are basically the same, as are most of the other features, with the addition of the satellite SMS emergency messaging system that we noted earlier this week, although (hold on to your seats) the case color purple has been added, although it replaces last year’s pink and green offerings.
The iPhone 14+ is a new member of the iPhone family so there is no comparison, so we compare it to the new iPhone 14.  The iPhone 14+ is 19.4% larger than the iPhone 14 and is 25 grams (18%) heavier (like adding the weight of a mouse) and has a larger (6.7”) screen that has a higher resolution with a similar pixel density.  The iPhone 14+ will sell for $899 and will be available October 7.
The iPhone 14 Pro, which will sell for $999 and is essentially the same size and weight of last year’s  iPhone 13 Pro, and while they both have a 6.1”OLED display, this year’s model has a brighter screen that is based on LTPO (Low-temperature poly oxide) which reduces power consumption.  But the main difference is the Apple A16 Bionic chipset (4nm node) that replaces the A15 Bionic (5nm node) from last year.  The iPhone 14 and the iPhone 14+ both use last year’s A15 Bionic chipset. While it is early for benchmark tests, it should be a bit faster than last year’s model and comparable Qualcomm (QCOM) Snapdragon chipsets but by how much and whether it will be noticeable by users is a question that will take some time to answer.  One of the cameras in the iPhone 14 Pro has also been upgraded from 12MP to 48MP with the Pro becoming available 9/16/22.  The iPhone 14 Pro Max will sell for $1,099 and is the top of the iPhone line, with a 6.7” OLED LTPO display and the same upgraded chipset and camera as in the previous model, so the real difference between the Pro and the Pro Max is the larger screen size, for which they charge $100 more.
Aside from the satellite SOS capabilities that we mentioned in an earlier note, there is one improvement of note in this year’s models.  There is an obsession among smartphone fans concerning the area in which cameras are located, typically called a notch.  The notch began back in 2017 with the Sharp (6753.JP)  Aquos S2 and Apple picked up the idea with the iPhone X that same year.  Over the last few years notches became larger as more cameras and sensors were added and then the tide turned away, with fans seeing the larger notch taking up valuable screen real estate.  Apple changed the notch in the iPhone 14 Pro & Pro Max to a ‘pill’ shape, obviously smaller than a full notch, and rather than waste the space created what they call the “Dynamic Island”, a notification window that sits over the cut out.  Apple seems to have spent a great deal of time and effort designing the notification window shapes and formats for various message types, but it does allow the user to avoid having to move between applications to check status, as the “DI” can remain open without affecting other applications.  It’s a handy feature that puts the notch to good use and seems far better than the screen bar notifications that are typical with Android phones.
That said, there was little else to get excited about, at least from a hardware standpoint, so the release seems to be pretty much as we expected, with little change to the phones themselves.  Its hard to get excited about something that is essentially the same as last year’s model, but we are sure Apple fans will find things to crow about and the endless stream of slick advertisements showing hip folk doing cool things with their iPhones will surely attract attention, but short of the ‘Dynamic Island’, which is a nice feature, and a better camera set-up, there is little to move customers to upgrade from the iPhone 13 series in our view.