iPhone — the next big(ger) thing

Smartwatches are relatively expensive and have garnered more hype than sales, Above, Samsung’s Gear 2.
Smartwatches are relatively expensive and have garnered more hype than sales, Above, Samsung’s Gear 2. ALBERT GEA /Reuters

Tuesday could be the day that Apple Inc.’s renowned iPhone finally grows up.

The giant consumer electronics firm will hold a major event Tuesday and it is widely believed Apple will introduce two phones, and maybe even a smartwatch that will try to convince a skeptical public there is a use for wearable devices.

On the phone front, one model will have a 4.7- inch screen, according to Frank Gillett, principal analyst at Forrester Research Inc., and the second a 5.5-inch screen, making it among the largest smartphones available.

At that size the phones will finally give Apple a competitive weapon against the hugely successful big-screen “phablet” phones from its bitter rival, Samsung Electronics Corp.


“Basically, when the iPhone was invented people wanted small phones,” said Gillett. “But now that customers understand what smartphones can do —movies, photos, Web browsing — they want larger screens.”

Samsung certainly proved that; The company’s 5.3-inch Galaxy Note, introduced in 2011, was a massive hit. Similar oversized phones, running Google Inc.’s Android software, have established Samsung as Apple’s toughest competitor. Meanwhile the screen size of current iPhone models are either 3.5 or 4 inches.

Gillett added that he expected the screens on both new phones to be fabricated from an artificial sapphire material for greater resistance to scratches and cracks.

But size isn’t everything. The new phone may also feature a technology called “near-field communications” or NFC, which could make the new iPhone an appealing alternative to old-school credit cards.

The system relies on a built-in chip that can transmit a digital code to other devices a few inches away. A user enters his credit and debit card information into a “digital wallet” app installed on the phone. To make a purchase, the user waves the NFC-equipped phone in front of a payment terminal. The phone transmits a unique digital code from the digital wallet to the terminal. The credit card processing company recognizes the code, collects the money from the shopper, and transfers it to the merchant.


Google encouraged Android smartphone makers to make NFC-compatible phones, in order to create an alternative to credit cards. But the idea has gone nowhere, because few retailers have signed on to use the system.

Apple is expected to announce an NFC system that will be supported by major credit card companies, including Visa Inc., MasterCard Inc., and American Express Co. In addition, Apple’s version will rely on the company’s Touch ID technology, introduced last year in the iPhone 5S. Touch ID uses the phone owner’s fingerprints as a password, reducing the risk that a thief could make purchases with a stolen phone.

But Denée Carrington, a senior analyst for Forrester Research Inc., said there is no guarantee that Apple’s NFC system will do better than Google’s.

“Merchants and brands have to be prepared to utilize it,” Carrington said. “You also have to train your staff . . . having it on the handset is not sufficient.”

Todd Day, senior industry analyst for mobile and wireless at Frost & Sullivan in Brownsville, Texas, said that while NFC may have a bright future, it will take years to catch on, since consumers are unfamiliar with the technology and few retailers are presently set up to accept wireless payments.


“I don’t think that NFC is really going to play a huge role initially, at least in the first few quarters,” Day said.

Either way, Day predicts big sales for the new iPhone, partly because the nation’s biggest cellular carriers now let users upgrade their phones every year or 18 months, rather than the traditional two-year cycle.

Under these plans “you pay maybe $75 a month to get the new iPhone,” Day said. As a result, even people with relatively new phones will upgrade right away.

Perhaps Apple will show off a smartwatch as dazzling and disruptive as the original
iPhone. But so far, these devices have garnered more hype than sales. They’re relatively expensive — sometimes as much as $300 — and usually require the purchase of a smartphone, which itself can do the same tasks as the smartwatch.

The research firm NPD Group found that Americans spent just $96 million on such devices from October 2013 to May of 2014.

“The watch is a big question mark,” said Michael Oh, founder of Tech Superpowers, a Boston retailer of Apple products. Oh said that smartwatches today are like tablet computers before the iPad: interesting, but not yet truly useful.

If Apple could come up a smartwatch as innovative as the iPad, Oh said, “there’s a real opportunity for Apple to effectively take the carpet out from under every competitor in that space.”

Hiawatha Bray can be reached at hiawatha.bray@globe.com. Follow him on Twitter @GlobeTechLab.