Apple’s planned new iPhone features do not address its central dilemma

It gets harder and harder for the big smartphone vendors to come up with an eye-catching new feature every year, and Apple is no exception to the rule, having been dogged for some years by accusations that it has lost its innovative touch.

The iPhone X created a splash, but the firm will have to plan for more dramatic changes in future, if it is not to lose ground to the increasingly inventive Huawei, as well as incumbent Samsung and a host of up-and-coming firms from China and India. This is all the more urgent, since the company repeatedly fails to invent a whole new device which might reduce its dependence on its flagship product significantly. Tablets and watches have not moved the needle much, and the much rumored Apple car project has been scaled back.

So the iPhone must carry its heavy burden of supporting the world’s most valuable company for some years to come, it seems. Apple is reported to be working on a range of features for future iPhones, including touchless gesture control, curved screens and enhanced use of artificial intelligence (AI) to power new services.

The control feature, according to Bloomberg sources, would let users perform some tasks by waving their finger near the screen but not actually tapping it. That would fit well with Apple’s real skill, which lies less in hardware design than in reinventing user interfaces in a way that drives new patterns of usage and new applications. The iPhone X has the 3D Touch feature, which responds differently depending on the pressure exerted by different fingers.

However, the touch-free technology is unlikely to reach commercial iPhones for two years, said the source.

Less surprisingly, Apple is also said to be joining the trend for curved screens, already adopted by Samsung, LG and others. Its particular take on this would be to create iPhone displays that curve inward gradually from top to bottom, rather than curving at the edges like the newer Samsung Galaxy S models. The iPhone X’s OLED screen curves a little at the bottom, but that is hardly perceptible, but Apple’s belated conversion to OLED, rather than less flexible LCD, displays does enable it to experiment with new shapes.

But a curved iPhone could be 2-3 years away too, said the insiders, while another reported project, to create a whole new screen technology called MicroLED, would be even further out, and might never pass muster as a commercial technology at all.

All of which begs the question of what Apple will put into 2018’s new models to fend off critics and competitors, and even boredom among its own user base. It can be sure that Samsung and Huawei will also be throwing clever engineers and millions of dollars at the issue – Samsung is working on a foldable smartphone, apparently, and already has some touchless technology in its Air Gestures system. Meanwhile, Google also has a project in this area, called Project Soli, which would enable touchless gestures further from the screen than Apple’s development.

But in the short term, it may be easier for Apple to maintain its differentiation through services for the iPhone – which have been its highest growth source of revenue in recent quarters – rather than the gadget itself. Content and applications can tie users into a device even when it is ageing in design terms, while encouraging higher levels of usage and interaction.

Increasingly, the services which are catching consumers’ eyes are driven by AI and machine learning engines in the cloud, which enable highly personalized content choices, recommendations and search answers, as demonstrated in the personal assistants such as Apple Siri (the pioneer, but now overshadowed by Amazon Alexa on non-mobile devices, and by Google Assistant).

According to the New York Times, Apple has recently hired John Giannandrea, head of search and AI for Google, to head up its own AI/ML strategy, reporting directly to CEO Tim Cook.

This is a coup for a company which has been well behind Google in the breadth and depth of its AI activities, especially as Giannandrea was said to be highly regarded in Google, even being given an office next to CEO Sundar Pichai’s.

However, Apple has a significant dilemma to resolve before it achieves a step change in its mobile services business. It remains a walled garden at a time when consumers are increasingly used to being able to use different platforms interchangeably, and when developers of cutting edge apps and content want to reach all those platforms too. It may not be enough, in future, to invest heavily in new device form factors, user interfaces and AI engines.

Apple’s proposed acquisition of music recognition service Shazam is facing intense scrutiny on the grounds it might restrict it, in future, to iOS, whereas it is currently available on most mobile operating systems. That level of regulatory interest in a relatively niche acquisition highlights the problems it would face if it chose to go after a game-changing apps or content purchase, such as Netflix. With its acquisition hands tied in this way, Apple has to fall back on buying clever start-ups and even cleverer executives, and on its own design and marketing prowess. Those may not always be enough to keep the iPhone desirable in a world of open platforms and fickle consumers.