Apple supersizes the iPhone 6, joins the big-screen era at last

The consumer electronics giant upgrades its iPhones on the inside and outside with larger and higher-resolution screens and better chips.

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The iPhone 6 and iPhone 6 Plus go on sale September 19, starting at $199 and $299. CNET

Things keep getting bigger at Apple.

At an event close to its headquarters in Silicon Valley on Tuesday, Apple unveiled the iPhone 6 and iPhone 6 Plus , featuring upgraded technology to take better photos, deliver longer battery life and display more advanced apps.

The breakout feature, however, is the screens themselves. The iPhone 6 features a screen measuring 4.7-inches diagonally, Apple said, and the iPhone 6 Plus will have a 5.5-inch screen. Previous generations of the iPhone had a 4-inch screen or smaller.

The new iPhones also feature a new chip, the A8 microprocessor, which is 50 percent more power efficient than the chips in last year's devices. That, and a larger size for bigger batteries, allows the iPhone 6 to play music for 50 continuous hours, while the iPhone 6 Plus can run for 80. Talk time is 14 hours and 24 hours respectively.

The company also announced a new payment service, Apple Pay, that allows its latest iPhones to send wireless payment information to merchants ranging from Bloomingdale's to McDonald's in a partnership with American Express, MasterCard and Visa.

Phil Schiller, Apple's marketing chief, said the changes were the most dramatic yet for the product line.

"Yes, they're bigger; They're a lot bigger," he said. "They are the best we know how to make and I think the best anyone has ever seen."

Jan Dawson, an analyst at Jackdaw Research, agreed. "The new phones should dramatically expand the size of the opportunity for the iPhone, which has been artificially limited by its small screen size," he said in a note to investors. "The iPhone will now definitely have its largest quarter ever."

The iPhone 6 goes on sale September 19 in 115 countries starting at $199 with for a version with 16 gigabytes of storage space. The iPhone 6 Plus starts at $299 for its 16-gigabyte version, $100 more. In the UK, an unlocked iPhone 6 will start at £539, and the iPhone 6 Plus will start at £619.

Apple shares, which have risen about 30 percent in the past six months on anticipation of these new announcements, rose slightly on the news before closing the day down less than 1 percent at $97.99.

While the announcements of the newest iPhone were widely expected, the importance of this year's unveiling couldn't be higher.

Apple's pitched war against phones made using Google's Android operating system is entering a new stage this year with the introduction of wearables, tiny computers worn by users and connected to a smartphone to record and broadcast information about their bodies.

Google cemented its commitment to the burgeoning new gadgets in June with its Android Wear software efforts and a host of devices from Samsung, LG and Motorola to support the new initiative.

Other companies, such as Pebble , have offered devices to consumers for more than a year, but have yet to catch a mass-market wave.

Now it's Apple's turn. The company announced its Apple Watch, bringing it into a new category of gadgets it can sell to consumers and a new way to pitch the iPhone as a unique device among its competitors.

"The wearables market has so far lacked a leader to fire up the masses, and all eyes are on Apple at this point," Cathy Boyle, an analyst at industry researcher eMarketer, said in a recent report.

The iPhone is Apple's most important gadget and its biggest moneymaker, accounting for more than half of sales and about 70 percent of profit, according to analysts.

Despite the iPhone's gargantuan size, Apple has struggled to maintain sales relative to competitors. The iPhone's worldwide smartphone market share has plummeted from a peak of 23 percent in fourth quarter of 2011 to 12 percent in the second quarter of 2014, according to market researcher IDC. That puts it in second place behind Samsung.

It's far from game over for Apple, though. In the latest quarter, ended June 28, consumers bought 35.2 million iPhones even though Apple's latest devices -- the 5S, which added a new touch fingerprint security system and faster chip, and the lower-cost, plastic-encased 5C -- were nearly nine months old.

The iPhone 6 just may be one of the largest product launches in Apple's 38-year history. Apple reportedly has asked manufacturing partners to produce about 70 million to 80 million units of its larger screen iPhones by December 30, which is about 30 percent to 40 percent more iPhones than it ordered for its initial run of last year's iPhone 5S and 5C.

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The first glimpse of the iPhone 6 and iPhone 6 Plus
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Bigger is better?

The key feature of this year's iPhone lineup is size. The new iPhones are much larger than past iterations.

Competitors ranging from Huawei to Lenovo to Samsung have offered larger-screen smartphones for years, but Apple has resisted, often saying it wants to maintain a customer's ability to use the entire device with one hand when necessary.

Apple has also been keenly aware that customers want bigger screens. In an internal presentation from April 2013, which was part of the evidence in the latest Apple v. Samsung patent trial this spring, Apple executives wrote that "consumers want what we don't have." The presentation also noted that the smartphone market isn't growing as quickly as it used to, and many consumers are now seeking cheaper, larger-screen phones. (Schiller was asked about the documents while on the stand and downplayed their importance.)

For the past two years, the iPhone has sported a display measuring 4 inches diagonally. The original iPhone measured 3.5-inches when it launched in 2007, as did the successive five upgrades.

Launching bigger iPhones could have significant implications for the mobile industry. In a market where phone designs and operating systems have become standardized, larger screens were one way for Android devices to stand out against the iPhone. Samsung claimed during the patent-infringement trials against Apple that one of the main reasons people buy Samsung devices is for their bigger screens. If that's no longer a differentiator, Samsung's sales could suffer. Now that Apple has bigger devices, Android makers such as Samsung and LG won't have as much of an advantage.

Shipments of phablets, typically defined as smartphones with screen sizes between 5.5 and 6.99 inches, will surpass portable PC shipments this year and tablet shipments next year, International Data Corp. said in early September. This year, electronics vendors will ship about 175 million phablets, IDC said, passing the 170 million laptops expected to ship during the same period. Next year, phablet shipments will top 318 million units, surpassing the 233 million tablets forecast to ship in 2015.

While phablets remain a small percentage of the overall smartphone sector, Apple's larger screen iPhones should give the category a boost, IDC added. Phablets should grow to 32 percent of the smartphone market in 2018 from 14 percent this year, the firm said.

"With Apple expected to join the space in the coming weeks, we anticipate even more attention on phablets as larger-screen smartphones become the new norm," said Melissa Chau, IDC senior research manager.

Among other features Apple included with the new iPhone is a new sensor for barometric pressure, to tell when users climb stairs, and new voice transmission technology for clearer calls. The iPhones also include a higher-quality camera, promising faster autofocus and image stabilization, though it remains the same 8 megapixels previous iPhones offered.

Existing apps will work on the devices regardless of size, Apple said, though it has new technology tools to encourage developers to take advantage of the extra real estate.

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