During the unveiling of the new iPhone 6 yesterday at 10 am PST, Apple Inc (NASDAQ:AAPL) delivered nearly everything in its newest device that rumors have led the public to expect in the past few months. The new iPhone 6 sports a larger and better display screen that measures 4.7 inches and 5.5 inches, a much faster second generation A8 processor. The device even comes installed with the new iOS8 with a system that can monitor the user’s health and fitness as well as process mobile payments. This debut absolutely has the capability to boost the growth in market share of smart phones.

Apple’s New Practical Approach

Prior to yesterday’s launch, there were only two areas of superiority that Android smart devices enjoyed over the iPhone’s hardware – namely the size of the display screen and near field communications technology (NFC). For many years, Apple refused to increase the display screens of its smartphones to more than 4.5 inches and did not build NFC technology and capabilities into its phones. These actions resulted in damaging consequences. After the event on September 9^th, the company did not just only introduce new produts into the market, but it showed investors and analysts that it could change and adapt to the evolving market.

When the iPhone 5 was released, Phil Schiller stated confidently that this was the most optimal size for a smartphone. This time, there were no such assertations. Apple has displayed its willingness to provide what the market wants, rather than simply stick to it’s own idea of what is “the best.” This is a pragmatic approach that Apple has desperately failed to implement in the past. Tim Cook is seemingly welcoming to the change as well – his presentation yesterday was one of the most exciting and enthusiastic of any presentation he has given so far as the head of Apple Inc.

The practical need for NFC was even more visible. Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL)’s Google Wallet has been available for the past three years, and enables the use of NFC technology for users to make payments in retail stores that are equipped with the technology. Nearly all Android phones are installed with NFC, while on the other hand, Apple marched to the beat of its own drum and refused to jump on the NFC trend.

Apple had even created Airdrop, its own peer-to-peer data sharing system, which uses WiFi in order to enable the sharing of files between iOS devices without having them be near each other. While Airdrop works very well, and not having to physically bump devices to one another is a perk, Apple tragically did not include the mobile payments area in its developments. In the end, the company was forced to take the NFC and incorporate it into its own devices in order to complete its mobile payments system, ApplePay.

What This Means For The Competition

Critics of Apple will without a doubt bring up the competing phones on the market that seem to offer more than the iPhone 6 does. For example, the Samsung (OTC: SSNLF) Galaxy Note 4 offers more screen pixels, and the Microsoft (NASDAQ:MSFT) Lumia 930 gives users more camera pixels. The iPhone 6 is characterized by performing well in many categories rather than go above and beyond in just one or two. At a screen pixel of 300 pixels per inch, both the iPhone 6 and the iPhone 6+ feature more pixels than it is possible for the human eye to process, and the iPhone 6+ has a display screen of 5.5 inches that features full 1080p resolution. If any phone offered anything more than this figure is just an overkill for marketing purposes.

The question about camera pixels is a bit more tricky. More pixels doesn’t necessarily mean better photographs, but the users of the Lumia toot about their cameras all the time, and in most comparisons side by side, the photos produced by the Lumia were significantly better than those by the iPhone 5S. The iPhone 6 sports an enhanced camera with 8 megapixels, so it may not produce photos any better than those shot with a Lumia phone.

However, the iPhone 6+ comes with optical image stabilization, which helps improve videos and still images, especially in low light shots. This may bridge the gap with the Lumia, but we must wait to see test results when they come out to draw an accurate decision.

Besides cameras and display screens, the new iPhones run on an improved next generation A8 64 bit processor. This new processor will be built with a 20 nm process, most likely in TSMC’s factory. According to Apple, this new processer has two times as many transitors that the A7 has, but is smaller in size by 13 percent. In the case of integrated circuits, smaller is usually better. The A8 is faster than the A7 by about 25 percent, and also more energy efficient by 50 percent.

With a second generation processor and a new operating system in the iOS 8, the new iPhones will undoubtedly reinforce Apple’s lead in the smartphone market of the technology sector. No other smartphone will be available in the United States with a 64 bit capability in time for this year’s holiday season. So far, only Samsung’s Galaxy Note 4 provides a 64 bit processor that is comparable to Apple’s, and that one is not even sold in the United States.

Additionally, Apple’s new iPhones feature a wealth of new technology, including HealthKit, ApplePay, and connectivity with the iWatch. Given all these factors, it is likely that the iPhone will start to get market share among the top five smartphone retailers. Samsung, on the other hand, will continue to slip in its grasp of market share. The holiday quarter sales for the iPhone 6 will be enormous. Those sales numbers will be easier to predict as the holiday season draws closer.

What Does This Mean To Suppliers?

The iPhone 6 was very well received yesterday, but there was one red line in the whole presentation. That is that the company’s GTAT fell by 13 percent right after the unveiling of the iPhone 6. The analysts that predicted that the iPhone 6 would have sapphire screens overshot themselves this time. I have previously written another article commenting on how unlikely the sapphire screens would be for the iPhone 6.

Apple did not discuss its plans for sapphire screens for future iPhones, since it could damage its short term sales of the iPhone 6. However, it is extremely likely that the company will incorporate sapphire screens in the future. However, two stipulations must be met first:

First, the plant in Arizona, which is supposed to be operated by GTAT, must increase its production to sufficient levels in order to satisfy the demand for the Apple iWatch as well as the iPhone.

Second, the company must perfect the process of making sapphire glass laminates, and that process must be scaled to levels of mass production.

The whole fiasco of the sapphire screens is just an example of how much technical challenge reports on Apple face. Journalism for the tech business industry relies too much on leaks and rumors, and not enough on technical common sense.

Another important supplier that will be affected by the iPhone 6 is Samsung Semiconductor, who manufactures all of the A-series SOC’s that Apple uses in its iPhones and iPads since 2010. While it isn’t certain whether or not the new 20 nm process is TSMC’s, it will be known to the public once the iPhone 6 goes on sale and companies begin to dissect the smart phone and its A8 processor.

Samsung is currently transitioning its factory operations in Austin, Texas, from making A7 chips to the advanced 16 nm FinFET process. This means that they will not be capable of handling a production volume at the level that Apple requires for the iPhone, so Apple will likely turn to other suppliers.

Also, there is some schedule risk regarding Samsung’s new process, so Apple had to find another maker for the A8. If Samsung reaches a level of production that satisfying Apple’s needs for 16 nm, the iPhone maker could very well go back to Samsung. Once again, this decision will be based on practicality.

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