Apple Inc. AAPL 0.32% is planning to release three new iPhone models again this fall, including a successor to the struggling XR, the lower priced 2018 device with a liquid-crystal display that has fallen short of Apple’s sales expectations, people familiar with the matter said.
Apple plans to introduce some new camera features, including a triple rear camera for the highest-end model and a double rear camera for the two other models, the people said.
The plan to stick with LCD comes as Apple grapples with sluggish sales of the iPhone XR, which has cut into its most recent revenue projection. That is partly because the planned LCD handset has been in the product pipeline for months and the plan can’t be altered easily, they said.
For 2020, Apple is considering dropping the LCD model, some of the people said, which would mark a complete shift to the organic light-emitting diode, or OLED, display for iPhones. The OLED displays on current XS models are considered to provide better contrast than the less expensive LCD displays on the XR and earlier iPhones such as the 7 and 8 models.
While product planning for 2019 models has progressed to a point where major features can’t be changed easily, the planning isn’t completed, the people said. Planning for 2020 models is at an earlier stage and more subject to revision, they said.
Apple’s innovation around iPhones and its lineup strategy, including pricing, are key to grabbing consumers as the number of handsets Apple sells stagnates globally. In China, which Chief Executive Tim Cook singled out as the major source of its revenue-forecast cut in a letter to investors last week, Apple has been facing fierce competition from local handset makers. Apple earns around 20% of its total revenue in Greater China.
Apple declined to comment.
In the fall, Apple plans to offer two models with the OLED display and one model with LCD, people familiar with the matter said. In 2018, Apple introduced two OLED-screen models, the iPhone XS Max and XS, and the LCD-display XR, which was priced at least 25% less than the other two models.
“ “Beefing up functional value, like expanding camera features, isn’t attractive because everyone else is doing the exact same thing.” ”
Apple is planning to do some catching up to rivals on rear cameras. It is considering introducing a triple-rear-camera system to its 2019 flagship model, which would succeed the iPhone XS Max, the people said. That would be an upgrade from the iPhone XS Max’s dual-rear-camera system.
Meanwhile the LCD model is likely to be upgraded to a dual-camera system from the single camera on the rear of the XR, they said.
The camera upgrades could help Apple win the hearts win the hearts of more consumers keen on taking good photos with smartphones, including in China.
But Apple lags behind its rivals in the number of rear cameras. Last year, Samsung released the Galaxy A9 with four rear cameras. Huawei’s Mate 20 Pro and P20 Pro, launched last year, carry three rear cameras.
In a sign of Apple’s awareness of the competitiveness of Chinese rivals, the company has been studying some Chinese smartphone brands, especially camera features, people familiar with the matter said.
In China, local brands have been faster than Apple to introduce new features on their smartphones, often for a lower price. That was the case for the dual-SIM feature and in-screen fingerprint sensors.
Still, experts say it won’t be easy for Apple to rely on such expected new hardware features to win back attention from customers, including in China.
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“What we want from Apple is something that makes us emotional, even unconsciously—say, truly beautiful and sophisticated design that we can’t resist,” said Atsushi Osanai, a professor at Waseda University in Tokyo who is an expert in electronics. “Beefing up functional value, like expanding camera features, isn’t attractive because everyone else is doing the exact same thing.”
Apple has recently started to offer discounts on its 2018 models for trade-ins of older phones.
Even so, the price and a lack of significant new features have kept away some consumers—including Wang Qi, a freelancer who left an Apple store in Shanghai in January without any purchases.
Ms. Wang said she bought an iPhone 8 and an iPhone X a year ago. “The latest version doesn’t seem much different,“ she said. But she is willing to stick to iPhones if there is any innovation in this year’s product. ”I am used to the operating system, and it’s just easy for me to keep buying iPhones."
Apple is also considering trimming functions from its 2019 lineup to cut costs, people familiar with the matter said. That includes the force-touch module, which makes the display sensitive to fingertip pressure, the people said, though the function could live on in other components, one of the people said.
—Tripp Mickle in San Francisco and Chunying Zhang in Shanghai contributed to this article.
Write to Yoko Kubota at yoko.kubota@wsj.com and Takashi Mochizuki at takashi.mochizuki@wsj.com
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