iPhone 5: What Items Were Missing In Apple’s New Smartphone?

 @DavidZie
on September 13 2012 11:11 AM

When the first customers for the iPhone 5 from Apple (Nasdaq: AAPL), the world's most valuable technology company, get their new products next Friday, chances are they'll rave over the latest model, the upgrade for the nearly year-old iPhone 4S.

Observers largely cheered the new product, which the Cupertino, Calif.-based company will unleash in dozens of countries over the next few weeks.

Thinner, lighter and with a bigger screen -- and more versatile than the iPhone 4S -- the iPhone 5 is an expensive new toy, especially at its $499 price for the 64 GB version. By not lowering prices to meet competition from phones running on the Android OS from Google (Nasdaq: GOOG), the No. 1 search engine, Apple effectively sets itself up for continued profit in the premium market.

Apple's also about to get a challenge from Microsoft (Nasdaq: MSFT), the world's No. 1 software developer and a company brought in to invest in Apple when then-CEO Steve Jobs needed its cash when he returned in 1997. The Windows phones will be priced below the iPhone 5's retail prices.

Here are several things Apple could have added to iPhone 5:

A new version of Siri. The voice-recognition personal assistant, Siri, is clearly the most successful voice-recognition product ever released to consumers. Those from Nuance Communications (Nasdaq: NUAN), LumenVox and others haven't been installed in as many iPhone 4S products as Siri was.

Siri, while parodied in Doonesbury and Viacom Inc.'s (Nasdaq: VIA) Comedy Central, has interacted with owners of more than 80 million iPhone 4S models. Surely a new version could have been introduced with the iPhone 5, unless next week's overall iOS6 upgrade tweaks it, too.

NFC capability. There'd been expectations the new model would deploy near-field communication (NFC), which could make wireless e-payments and bursts of data transmission easier. NFC, though, requires chips installed in both the phone and whatever terminal is being accessed.

Phil Schiller, Apple's vice president for sales, said the company's new Passbook function works better using software. Retailers still haven't stumbled upon a single standard for e-payments, with the result that companies like Starbucks Inc. (Nasdaq: SBUX), the No. 1 coffee chain, have acquired minority stakes in start-ups like Square, the San Francisco-based specialist that sells a special hardware product for smartphones.

Google is also interested in e-payments, so some kind of solution may come in the next-generation product.

Biometric security. A popular request from consumers is for some kind of biometric software that would recognize an owner's fingerprint or eyeball and open and unlock only when the right person turns it on.

Wireless recharging. Apple worked with its connector suppliers to devise a smaller-than-ever connection interface it calls Lightning, but the iPhone 5 still needs to be plugged into a charger connected to an electrical outlet.

Rival Nokia Oyj (NYSE: NOK) of Finland introduced its new Lumia 920 and 820 phones last week based on Microsoft Windows 8, which are rechargeable using the Fatboy Recharge Pillow from Harman International's (NYSE: HAR) JBL division. Perhaps JBL will seize the opportunity to put in a call to Cupertino?

Shares of Apple rose $8.31 to $678.10, about 1.3 percent, in mid-morning Thursday trading.

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