IFA 2013 – A big event once again

IFA owes its new found importance to its timing.   

• The IFA trade show kicks off tomorrow in Berlin and its timing right before Apple’s event on September 10^th has made it the place to launch new products.
• Consequently, Samsung is holding another unboxed event where it is widely expected that the company will launch a smart watch and the Galaxy Note III.
• This event is being held at 1pm ET on Thursday September 5^th.
• LG has already launched a new tablet and Amazon if refining its Kindle line up.
• Sony is also holding an event tomorrow where a new smartphone, several cameras and some new Viao laptops are expected.
• I am also expecting HTC and Lenovo to announce products at this trade show.
• All of these announcements are aimed at stealing Apple’s thunder for when it holds its event next week on September 10^th.
• Whether or not they succeed depends very much on what Apple has decided to launch.
• A big hardware upgrade with a much larger screen and biometric sensors could re-light the fire underneath Apple but I fear that the iPhone 5S will be simply a minor update with the device looking pretty much the same as the old one.
• The other big question is the iPhone 5C.
• Expectations are that this device will be a lower end device priced at $300-$400 aimed at increasing Apple’s addressable market.
• This is the device announcement that eclipses all others.
• If this device is launched as expected and it proves to be a hit with consumers, it will change the dynamics of the smartphone market.
• In that instance, it will be damaging for Android, Windows Phone and BlackBerry and it will push them further down into the cheaper tiers of the market.
• This will mean lower prices and margins for these players.
• However, Apple has never really done cheap very well and I see the possibility that consumers shun the device not wanting to be seen as not rich enough to afford an real iPhone.
• This strategy also comes with the very real risk of cannibalisation (as with iPad Mini), which could end in overall lower revenues for Apple despite an increase in smartphone market share.
• Apple may also launch a smart watch and Apple TV next week but frankly these are less likely and minor issues when compared to the potential impact of the iPhone 5C.
• Its going to be a busy week for device announcements but it’s the events on September the 10^th that will decide how share prices move.