6 Takeaways from the Apple iPhone Event

“Every year I Retweet this, and every year it rings true... New Apple product X is announced. Pundits & analysts say X will fail. X breaks all previous sales records.” – Nick Bilton

There has been a lot of analysis of Apple's iPhone Event yesterday, and rather than regurgitate it, let me do two things.

One, let me suggest that you watch the video of the event, so that you can decide for yourself.

Two, let me attempt to shape your thinking by sharing the six takeaways that remained under my skin a day later.

1. Steak vs. Sizzle: In the world of experience-driven marketing, there is steak and there is sizzle. Steak is the tangible, enduring and utilitarian value that a product (or service) delivers. By contrast, sizzle are those “AHA” moments of delight that make you aspire and covet to hold this new-fangled bit of nirvana in your hands. One challenge in assessing Apple launch events is that they ALWAYS manufacture a healthy balance between steak and sizzle. Apple, after all, understands the seminal truth of infomercial king, Ron Popeil; namely, that product marketing and product management are part of the same 'It.' How the product is experienced is indelibly linked to the product, and vice-versa. But, this presents a bit of a conundrum in assessing new Apple products, for sometimes, the new feature is indeed a game-changer (touch, accelerometer, app platform, iTunes). But other times, it’s bells and whistles, but no song (Siri, Me.com, FaceTime, Panorama). Thus, one has to ask which bucket will Touch ID, M7 (the motion coprocessor) and the iWork bundle will fall into: Steak or Sizzle?
2. Apple is the Segmentation King: While many will grumble that Apple blew it by not chasing the low-end of the market with a “cheap” iPhone, one has to marvel at how consistently the company excels at segmenting their offerings based upon junction points between pricing, power and functionality. CONSIDER: FREE (iPhone 4S - 8GB); $99 (iPhone 5C - 16GB); $199 (iPhone 5C - 32GB); $199 (iPhone 5S - 16GB); $299 (iPhone 5S - 32GB); $399 (iPhone 5S - 64GB). This has been the Apple story dating back to iPod (I wrote about this here), and contrasts with the SKU-itis that defines companies like Samsung and Nokia. Put another way, the company groks the concept of the “job to be done” model espoused by Clayton Christensen, and slices and dices accordingly.
3. The Duality of iPhones: By breaking iPhone into two discrete models, Apple has created an interesting Koan. Does the existence of iPhone 5c and iPhone 5s make the former seem lower end, or the latter seem higher end? I’m guessing the latter, and the fact that Apple positions iPhone 5c as the default iPhone on their web site, seems to suggest that that’s their goal, too. Needless to say, it will be very interesting to see how this plays out in the market in terms of units, ASPs and margins. My guess is favorable on all fronts.
4. Age of the Sensor: Is there any company on the planet that has driven computing into the realm of sensors more so than Apple? On the iPhone, there are touch sensors, biometric sensors, accelerometer sensors, camera sensors, lighting sensors, and now a motion coprocessor to offload such functionality from the main processor, enabling the iPhone to continuously measure motion data, accelerometer, and gestural data, with negligible battery drain. No less, there are multiple radios and networking paths to shuttle such data into and out of the device. One only has to consider the work that Apple is doing with Bluetooth Low Energy and iBeacons, which you can read about here to understand the game-changing potential, if they see it through to its logical end. Moreover, part of Apple's halo effect is that they've historically taken such innovation from one class of device, and derived it into its own unique instance for another class of device, something one can see in the cross-pollination between Macs, iPods, iPhones, iPads, iOS, Mac OSX, iTunes and App Store. What if they do the same in health and fitness, or other realms of wearable computing? How might they change the retail experience ala 'Minority Report?'
5. Camera is a Gateway Drug: As someone who loves taking photos, and hates carrying around cameras, I can affirm how Apple’s ever-improving camera experience is the manna that keeps me married to my iPhone. No less, it’s one of those areas where the tight bond between hardware and software (including sensors) creates a serious wedge between Apple and the competition. For example, Nokia has a Lumia phone with 41 megapixels, but does anyone really believe that people will switch to Lumias for a great camera experience? Or, that Nokia even groks what it is to deliver a great camera experience? In the same way that iTunes and App Store were core gateways into iPhones (and iPod touches + iPads), so too is the great camera experience, which only gets better in the new iPhones + iOS 7.
6. Touch ID and Identity: Most agree that Apple has created a seamless 'it just works' experience with Touch ID. Thus, it begs the question. When does Apple go all in-on eWallet and Identity? After all, they’ve got a billing relationship in place (backed by a verified credit card) with hundreds of millions of users. They have trained users on a wide variety of transactions (i.e., music, movies, books, apps) and are the conduit for many more (eBay, Amazon, etc.). Now, they have biometric verification and one-touch transaction support. At some point they activate that Trojan horse, no?

In other words, where some see gloom and disappointment, I still see the kind of magic - and opportunity - that only an integrated approach can provide.

Related:

1. How Google vs. Apple is like a great NBA playoff battle (GigaOM)
2. The Pitch Man: A Must Read for Product Nuts
3. Apple's Segmentation Strategy, and the Folly of Conventional Wisdom (O'Reilly)
4. You say you want a revolution? It's called post-PC computing (O'Reilly)
5. Three Takeaways from the WWDC Keynote: How Apple Got its Groove Back