Five Things We’ll Be Watching For At Apple’s iPhone Announcement


Tomorrow is a big day for the wireless industry, as one of the most influential innovators in the mobile world announces the latest edition of its mobile phone operating system. With every major iteration of the iPhone’s operating system, Apple (NSDQ: AAPL) has disrupted the mobile ecosystem (first with the iPhone itself, and later, for example, by adding the app store). So the obvious question is: will Apple be able to do it again with iPhone OS 4.0?

With mounting competition from Microsoft (NSDQ: MSFT), Google (NSDQ: GOOG), Research In Motion and others, Apple cannot afford to release a mediocre update – it has to come up with something special to please investors, developers and fanboys. We will be at Apple’s headquarters tomorrow morning to find out if it passes the test. But in the meantime, here are five things we’d like to see at tomorrow’s announcement. Our list isn’t meant to predict the actual list — rather it’s the five services and capabilities that we think Apple should roll out to keep the iPhone momentum rolling. Please add your own suggestions, in the comments, for what iPhone OS 4.0 should look like.

1. Multi-tasking: This is an obvious one that many others have mentioned. Especially with the release of the iPad, Apple needs to add the ability to run multiple applications simultaneously. The devices become much more powerful when you can listen to Pandora while checking email, or receive a Skype call while also streaming TV.

2. Live Widgets: The iPhone’s home screen is embarrassingly stagnant. There’s no excuse for it to always be 73 degrees in Cupertino. The weather app should be able to track your location and update the temperature accordingly. Google Android currently has this capability, and Microsoft’s upcoming Windows Phone 7 is taking it to even further with tiles that can sift through photo albums and and provide short-cuts to the people you care about most.

3. Distribution/price points: To keep developers and advertisers happy, Apple must increase its market share. During a recent three-month period, Apple’s growth remained flat, while Android’s share rose by 5.2 percent. How can Apple compete in the U.S. when the iPhone is only available on AT&T? (NYSE: T) Price points are also important. While an entry-level iPhone costs as low as $99, it will have to compete with Android phones that will be free by the end of the year.

4. Advertising: Apple is expected to roll out a new advertising service tomorrow that is the result of its purchase of Quattro Wireless. While it’s very speculative, the service could be instrumental in keeping application developers and carriers happy. As we reported, Google is sharing advertising revenues from search with operators that adopt Android. Microsoft, as well, could offer that. While carriers are still eager to adopt the iPhone, Apple may need to provide some financial incentive in the future to keep the relationship healthy and give carriers a reason to invest in their network infrastructure. At minimum, an advertising network would potentially help application developers monetize their applications.

5. Content and services: While there’s hundreds of thousands of iPhone applications — many of them free — the phone itself does not come pre-loaded with a lot of services. That leaves customers sifting aimlessly through a mind-numbing list. Other handset makers are seeing value in partnering with content companies as a way to differentiate themselves. Google started offering free turn-by-turn navigation; Nokia (NYSE: NOK) quickly followed suit. Likewise, T-Mobile USA recently integrated an e-reader and a Blockbuster (NYSE: BBI) video subscription service into the HTC HD2 running Windows Mobile; Samsung has announced content partnerships with Paramount Pictures and others for future Android phones. Apple, of course, lets you buy video and songs from iTunes to play on your iPhone, but it needs to also offer subscription services and/or pre-loaded standalone applications based on this treasure chest of music and video.

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