Apple iPhone 14/Wearables Event – eSIM-Only and Other Key Takeaways

I attended Apple’s Event and got hands on with new iterative versions of its phones and wearables. “Iterative” is not a pejorative: Apple will sell over 100 million of these devices and people will use them for hours every day and rely on them for managing and navigating their lives. Even small changes are enormously consequential, and some of the changes aren’t actually small. Here are some of the highlights:

1. iPhones Are Going eSIM-Only – Apple is pushing the industry away from physical SIM cards, and in markets where it can get away with it, Apple is going all-eSIM. The U.S. is dominated by three carriers who have all been cajoled into supporting this, while prepaid-SIM-happy Europeans get iPhones that still have SIM card slots – at least for now. The writing is now on the wall, and global carriers and MVNOs should be on notice that they may have only another year to get their eSIM houses in order.

Carriers dragged their feet supporting eSIM in the past because of fears that it makes it easier for consumers to switch away from them. It certainly can; T-Mobile has just launched a big switcher campaign based on eSIM. However, carriers benefit from lower costs – physical SIMs are essentially tiny computers and cost $10 - $20 each (plus express shipping, if they are being mailed to the customer). Carriers may also be able to sell the same customer multiple subscriptions (for example, home and work).

The benefits of eSIM for consumers are (slightly) better security, more flexibility to have multiple accounts for different numbers or purposes (up to eight eSIMs per iPhone 14, and yes, slots can be cleared and reused), and never having to fiddle with a SIM card tray again. eSIMs are a huge win for accessibility: tiny SIM ejector pins, SIM trays, and directional nano SIMs are a nightmare for anyone with fine motor control issues or hand tremors. U.S. customers traveling abroad won't be able to buy a physical SIM at a kiosk, but when they land they'll be able to choose from a variety of country-specific (or global) eSIM plans. I've been doing that for years already.

The downside comes when you have prepaid SIMs from MVNOs who don’t support eSIM, or you’re a reviewer who needs to switch an account to a half dozen different phones within a week (a common occurrence at Techsponential). I also expect the launch process to be extremely painful as carrier retail staff have to learn how to switch accounts and something goes wrong with the eSIM, the process, or the carrier billing system. Anecdotally, these are common problems today, and we’re about to get a major stress test to the system. T-Mobile and Verizon have already reached out promising that their apps make the process seamless. I’ll believe it when I see it.

[Update: adding new lines to the iPhone 14 is easy; Techsponential added an AT&T eSIM to our iPhone 14 Pro review unit with a QR code in minutes, and Verizon added a second active eSIM to the phone remotely in even less time. We plan to test T-Mobile on the phone next (you can store up to eight eSIMs, but only two can be active at a time). However, we are seeing reports of people having difficulty trying to move physical SIMs to eSIM, especially when business accounts are involved. Verizon’s app can move eSIMs back to a physical SIM; Techsponential is waiting to hear back from other carriers on their capabilities.]

2. Biggest Screen & Battery iPhone Doesn’t Have to Be Pro – In an inflationary era, Apple didn’t raise prices on any of the new iPhone models. (Currency shifts mean that iPhones will still be more expensive in some markets, but the base dollar and RMB price points are the same as last year for newer, more capable phones.) Some people like small phones, and Apple is keeping the iPhone 13 mini in the lineup. However, if you’re one of the millions of people who wanted the largest screen and biggest battery in an iPhone, in the past you would have to step up to the iPhone Pro Max, which typically starts at $1100. The new iPhone 14 Plus changes that: for $899 you can get an iPhone with a 6.7” display and the same large battery as the Pro Max model. This may cannibalize a few sales of the pricier model, but it will make many consumers very happy.

If you are willing to spend the money for the Pro model, you’ll get a newer processor, better cameras, and what may be the brightest display of any smartphone (great for watching content with Dolby Vision, or just using your phone outside in the sun). You can also get it in a dark purple color. It’s nice.

3. Apple Is Trying to Save Your Life – Apple touted how Apple Watch saved people’s lives by alerting them to heart conditions and helping them connect in emergencies, and while this is a marketing message, it’s one that rings true. Apple then introduced two new safety features: crash detection and Emergency SOS via satellite. Your Watch or iPhone will notify emergency services when it detects you’ve been in a car, SUV, or truck crash. All new iPhone 14’s will also be able to reach GlobalStar satellites to text emergency services if you’re stuck somewhere without cellular coverage. It launches in November in North America, with other geographies being rolled out in the months to come as Apple sets up human-staffed relay centers in additional countries. I have been separately briefed by Apple on Emergency SOS via satellite and I have a separate report covering how this works and how it compares to other recently announced cellular/satellite services.

4. AirPods Pro Are Better In Every Way – Apple continues to reap the benefits of designing its own silicon with a new H2 chip in the new AirPods Pro. I got ears-on with a pair, and they sound better than before. I'll need more time than a quick demo of five different tracks in a noisy hall to know how much better, but sound quality alone was never the best reason to buy the original AirPods Pro over competitors, so this is a welcome improvement. ANC is dramatically better, and you can use it longer since the earbuds now last 6 hours of playback – enough for some U.S. transcontinental flights.

The fit was much better for me, too; your ears may vary, but I never found the original AirPods Pro to fit comfortably or securely in mine. Apple is also including XS (extra small) eartips in the box, and that will undoubtedly help many people as well – my wife and daughter among them, who constantly steal whichever earbuds I’m testing that have a smaller ear canal piece. Finally, the case now beeps loudly so you can find it when it slips between your couch cushions. Apple isn’t the least expensive ANC option, but at $250, I expect the new AirPods Pro will continue to be Apple’s best-selling earbuds.

5. There’s a New Aspirational Apple Watch (and an Affordable Option Worth Buying) – The Apple Watch Ultra has a bigger, brighter display, and a bigger, multi-day battery. It’s made out of titanium, so it's lighter than it looks, it only comes in a WiF+cellular configuration, and it’s significantly smaller than competitors’ outdoors-focused watches. It’s also actually a lot less expensive: at $799, it often undercuts other GPS/triathalon/dive watches from Garmin, Suunto, and others by hundreds of dollars (this is an expensive category). The price, features, and Apple Watch ecosystem advantages push the Apple Watch Ultra into aspirational territory for non-athletes, and it is going to result in much larger sales numbers than this category typically receives. Aspirational purchase is normal for watches; how many people who own diving watches from Rolex or G-Shock watches from Casio ever test their durability beyond dropping them off the nightstand?

For consumers who want something on the lower end of the price scale, Apple has finally dropped the Watch 3 and updated the Watch SE specs. The combination of key functionality and a $249 ($299 cellular) starting price point is a recipe for volume sales, and like every Apple Watch, will help happily lock consumers into the iOS ecosystem.

6. Apple Did Redesign The iPhone 14 — On the Inside — Much digital ink has been spilled about how little has changed on the iPhone 14 year over year, but after the phone hit the market, iFixit discovered that the internal redesign was far more significant than Apple let on, and it will greatly benefit consumers if repairs are needed. We were told that the screen is now separate from the electronics, making repairs easier, but the changes are actually much more significant. The iPhone 14 (base model, not the Pro models) has an entirely new subframe and can now be opened up for repairs from the front or back. This should make replacing cracked glass or old batteries easier and less expensive. iFixit’s report is here.

[This report first published Sept 7, updated Sept 11 with expanded analysis in the eSIM section. Updated Sept 19 with eSIM launch experiences, and a new #6 section on repairability after iFixit published its report.]
[See Techsponential quotes on the Apple Event at CNN, CNET, Fast Company 1, Fast Company 2, PC Magazine, and USA Today.]

To discuss the implications of this report on your business, product, or investment strategies, contact Avi at avi@techsponential.com or +1 (201) 677-8284.

Avi Greengart