Brief:

• During a public event today and in a press release, Apple unveiled an ultra-premium smartphone called iPhone X, with pricing starting at $999, as well as a new series of video ads depicting some of the features. Sales will begin Nov. 3.
• Many of the biggest innovations on display were saved for the iPhone X. These include Face ID, which uses facial recognition to unlock a phone and authenticate payments; an all-glass front and back; a Super Retina Display; redesigned front and back cameras that have been optimized for augmented reality (AR); the Animoji app that captures facial movements and creates a dozen different animated, talking emojis; and the A11 Bionic neural engine designed for specific machine learning algorithms. 
• The newly revealed iPhone 8 and iPhone 8 Plus also get a glass back and the A11 Bionic chip. The new generation of iPhone will have new Retina HD displays and is designed for AR through the A11 Bionic CPU and new cameras that offer real-time image and motion analysis. The phones will be available on Sept. 22, with prices starting at $699. 

Insight:

With smartphone sales growth stagnating across OEMs, Apple — whose iPhone is credited with kicking off the smartphone revolution — hopes to renew excitement around its phones. The reception from tech reporters live-blogging the event was particularly enthusiastic for some of today's announcements, including the Animoji app, facial tracking, potential for a more powerful front camera to enhance selfies and built-in cellular support for the Apple Watch, which the company said is now the best-selling watch in the world.

From a marketing perspective, while there were few big surprises, Apple is clearly doubling down on camera-based features, which could have implications for developers and marketers as iPhones account for 37% of all traffic to digital campaigns and promotions, according to Wendell Lansford, co-founder of Wyng, in a statement emailed to Mobile Marketer. This percentage is growing due to the popularity of user-generated content, and the improved cameras are likely to open more opportunities, he added.

"The best performing campaigns will utilize the new camera capabilities to drive mobile engagement by encouraging consumers to contribute and share photo and video UGC as part of the campaign experience," Lansford said.

The enhanced cameras support Apple's push into AR. While both the iPhone 8 and iPhone X are designed for AR, the latter makes even bigger promises. With ARKit, Apple's developer platform for AR apps that becomes available with the release of iOS 11, developers will be able to create "fantastically immersive and fluid experiences that go far beyond the screen" for the iPhone X, according to a statement from the company.

Better-than-ever cameras are also behind Face ID, which projects invisible IR dots to match the user's face to a stored image and can adapt to physical changes like growing a beard. The processing is done on-device, and Apple promises it's more secure than Touch ID and is designed to prevent spoofing by photos or masks.

Security is a key challenge as phones start to play a bigger role in more daily activities, like paying for purchases. Apple is not alone in struggling to drive adoption for mobile payments and probably hopes that Face ID will help convince users that Apple Pay is secure.  

"It's hard to see this moving the needle much in terms of convincing people to use Apple Pay more," said Matt Schulz, senior industry analyst at CreditCards.com, in a statement emailed to Mobile Marketer. "Surveys have shown that many Americans are wary of mobile payments because of security fears, but the truth is that Apple Pay and their competitors already are more secure than using plastic. The challenge of changing people's minds about mobile payment security is less about technology and more about education."

The iPhone X is interesting in that it completes the picture for Apple in terms of having a tiered-pricing strategy, with the company offering the smaller iPhone SE, its standard iPhone, the larger iPhone Plus and now a super-premium device. This could help the company test new features with first adopters willing to drop $1,000 for a phone while protecting it from some of the market fluctuations as the space matures.

"This new class of iPhone affords Apple the opportunity to separate market and investor expectations," said Jeff Orr, research director at ABI Research, in a statement emailed to Mobile Marketer. "Low-cost iPhone solutions, such as the iPhone SE, can be prioritized for markets including India. iPhone X enhances the profitability for Apple smartphones, which will offset the downward price pressure and profitability at the low end of the market."