There has been a lot of speculation regarding Apple Inc.'s (AAPL) next iPhone, dubbed the iPhone 6. The highlight of that speculation, has been that Apple Inc. (NASDAQ:AAPL) would launch a curved screen iPhone 6, with some speculating that the screen sizes could be in the range of 4.7" to 5.5". However, just as the name suggests, that remained to be nothing more than speculation until two days ago, when the company made clear its intentions on curved touch screens.
Apple Inc. (AAPL) won a patent on curved touch screen, which it described as a manufacturing technique, which involves the making of curved touch surfaces, excluding the deformation from substrate warping. The new U.S patent number 8,603,574 is filed under the name, "Curved Touch Sensor".
This patent certainly indicates that there is some truth in the speculation, which has been making rounds in the media. Apple Inc. (NASDAQ:AAPL)'s launch of a curved screen smartphone would follow the footsteps of Samsung Electronics (KRX:005930), its biggest rival, and LG Electronics Inc. (KRX:066570). The two Korea-based companies have already launched their curved smartphones this year, with Samsung's Galaxy Round already in the South Korean market.
LG Electronics' G-Flex with a self-healing back cover is also available in South Korea, but was recently availed to the rest of the world, as th company looks to ship it in other markets.
It really does seem as though curved screen is the next step for smartphone manufacturers. However, in my own opinion, I do not see why the frenzy. In fact, I believe that Apple Inc. (NASDAQ:AAPL) is better-off staying away from curved screen smartphones and focusing on what it does best, making single-hand-operated smartphones, though it may have to make the screen bigger. And I have my reasons for that.
Curved Screens are Only Good for Very Big Screens, Not 5"
The biggest argument behind curved screens is that they produce top quality images and videos for the viewer. And I agree with this, partially. Reason being, I think this only works for big screens, like TVs and theatres. Therefore launching a curved screen smartphone to me sounds a little ridiculous.
Additionally, I do not see any realistic market for curved screen smartphones. Samsung Electronics may be a good example for Apple Inc (AAPL) to learn from, following the mediocre performance of its Galaxy Round smartphone in the local market. According to reports, the phone is now being offered on discount in South Korea.
Launching a curved screen iPhone could be very catastrophic for Apple Inc. (AAPL), as the market for that kind of phone remains speculative. The design might look futuristic, but the returns are likely to be a disappointment.
So How Can Apple Inc. Use The Patent?
Accumulating technological patents is always good for any technology company, and Apple knows better. It does not matter whether its going to utilize the patent today, tomorrow or several years from now. The important part is that when the time comes, Apple can utilize that technology on its devices without having to worry about potential patent lawsuits.
Additionally, the company could still be collecting substantial royalties from companies it authorizes to supply/make such devices in the U.S. So in my opinion, winning this patent does not necessarily mean that next year Apple will launch a curved iPhone. It is just a strategic positioning for the future.
Nonetheless, I do think that Apple could still utilize its latest patent win in one of its end-products. For instance, the Apple TV. LG Electronics recently launched its 55" Curved OLED TV, which minimizes pixel wastage by as much as 33%. So in my opinion, Apple may have to look at its TV strategy and see if introducing a curved screen could improve the quality. I think this is more likely to happen than launching a curved smartphone.
The iPhone is Apple's cash cow, and launching a curved iPhone 6, which might backfire could be one of the biggest mistakes by the iPhone maker in recent times.
Perhaps, the likely physical changes on the next iPhone would be the screen size, an area where the company lags behind rivals. Its recent deal with China Mobile (ADR) (CHL) is likely to spur the company's EPS by as much as 10%, but again, the Chinese telecommunications giant won't be selling 4G Apple devices alone, Samsung Electronics and Sony Corporation (ADR) (SNE) are very much in the mix. And with their big screen products coupled with the Chinese people's love for big screen devices means Apple will find it tough to sell.
Apple's U.S patent win for curved touch screen devices comes at a time when some people think that we are in a transition period to curved screens. The patent has made the initial speculation of a curved iPhone 6 look more like reality, but the truth of the matter is that Apple remains secretive as always.
Nonetheless, I do not see why Apple should bet on a speculative market, like that of curved screen smartphones. At least not with its cash cow product, the iPhone. If anything, a curved TV seems more realistic.
Apple Inc. (AAPL) has sealed a good deal with China Mobile (ADR) (CHL), but Samsung Electronics and Sony remain on the wings as far as 4G devices are concerned. Therefore, perhaps the iPhone maker should consider assessing its strategy on screen size rather than thinking of curved 5" devices. Samsung Electronics' Galaxy Round is also a good example why Curved isn't the way to go, with or without the U.S patent.