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Next iPhone May Be Old News

Are there any surprises left when it comes to the new iPhone? The hype over any new Apple device typically centers on something the public has never seen before. But with photos purportedly of the new device surfacing online, consumers may feel they've already seen all the details before Monday's expected unveiling.

This spring Gizmodo published a story based on its analysis of an iPhone prototype that an Apple employee reportedly lost in a bar in Redwood City, Calif.

The iPhone that Gizmodo analyzed has a different look from current models, with a flat back, an aluminum border and square edges. The phone's features reportedly also include a front-facing video camera and a camera on the back with a larger lens and flash, as well as an improved display.


"In general, the surprises aren't as much in hardware as they are in software," says Carl Howe, an analyst for the Yankee Group, speaking about Apple's annual Worldwide Developers Conference in San Francisco on Monday. "Most of the cool things we'll see this year will be around multitasking, iAd -- their advertising platform -- and some of the new iPhone OS 4 features."

A Data Surprise

But one surprise was already announced on Wednesday by AT&T -- currently the sole wireless carrier for the iPhone and iPad in the U.S. The company is changing the way it bills consumers for smart phone data plans. On June 7, AT&T will cease to offer its monthly $30 unlimited monthly data plan and replace it with two options: a $15 plan for 200 megabytes of data or a $25 plan for 2 gigabytes. Current customers can keep their existing data plans even if they renew a contract.

Mark Siegel, a spokesman for AT&T, says the company opted for two plans to focus on "the more modest user and the much heavier user."

A Consumer Reports analysis of iPhone user trends found that the average iPhone user "should pay the same or less for service" under these new plans since only about 4 percent of all iPhone users consume more than 1 gigabyte of data per month.


But Mike Gikas, the magazine's senior electronics editor, says there's no telling how long AT&T will keep this pricing plan before changing it again.

"We're on the cusp of a data revolution driven largely by social networking. People are largely on Facebook or Twitter," Gikas says. "These social networks are as addictive as crack."

iPhone Upgrades For Multitasking, Organization And E-mail

Apple announced in April that its new operating system for the iPhone -- OS 4 -- will give users of some iPhone and iPod Touch models new capabilities (iPad users will likely have to wait until the fall for the same upgrade).

"Multitasking is really something that other devices have had for a long time," says Kent German, senior editor for CNET. "It's something we've really been waiting for."

The iPhone's new multitasking function will enable users to use multiple apps at once. Previously, it was only possible to have one app open at a time. It will now be possible to have conversations using a Voice over Internet Protocol (VoIP) app while fiddling with another app simultaneously.

OS 4 will also offer new tools for organizing, including the ability to place related icons into folders and to manage multiple e-mail accounts through a unified e-mail box.

There is speculation that users will be able to choose whether to use Microsoft's Bing or Google as the default Internet search on the new iPhone.

Fans of the iPhone have long been hoping that it would become available on Verizon Wireless, the nation's largest cellular network. A company spokeswoman had no comment. But analysts have their doubts. Howe says Apple would first have to develop a version of the iPhone that runs on the CDMA wireless network used by Verizon, and Verizon would have to strike a "mutually acceptable deal" with Apple.

'Buy A Bucket Of Megabytes'

Smart phone purchases continue to rise steadily, and this translates into more data use. Wireless data revenues were nearly $41.5 billion in 2009, up from $8.5 billion in 2004, according to CTIA, a trade group for the wireless industry.

Howe, the Yankee Group analyst, says the most exciting thing about the new iPhone hardware is likely to be a higher-resolution display. With four times as many pixels, he says it's going to be "very dense, very sharp" -- something that will most likely encourage consumers to spend more time online. He also says consumers may be drawn to the new iPhone if it has the same high-speed processor as the iPad.

With new high-speed data networks under development, there's a good chance other wireless companies will change their pricing plans. Lowell McAdam, the CEO of Verizon Wireless, said last month that with consumers now using multiple wireless devices, the payment model for the future is likely to move away from a single device and price plan toward one in which consumers "buy a bucket of megabytes" that can be shared among several devices.

Downsides To Data Plans, Advertising

While Howe says AT&T's new pricing plans are good for both the company because it gets paid for actual network traffic and for consumers because they pay less, he says there still are downsides.

"It's bad for an entire class of businesses" focused on streaming content and mobile advertising, Howe says. "If you're a big YouTube user you're really going to hate this plan because you've got to pay for your YouTube viewing. [It's the] same story for streaming music businesses -- if you're Pandora, you really don't like these plans."

In the case of mobile advertising, Howe says the contract with consumers has always been that viewing ads translates into getting content for free.

"Well, the content isn't free anymore," Howe says. "I think that's going to make consumers a lot less tolerant of mobile advertising."

Apple's new iAd platform may also clash with consumers. CNET's German says Apple designed the program primarily as a perk for developers to give them 60 percent of the ad revenue. While iPhone users may gain access to interactive and multimedia content through the program, German remains concerned that the user experience will become "more cluttered" with many more ads than users had to deal with before.

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