Apple Iphone shifts from innovation to following competition

Apple Inc., the company that revolutionized the era of mobile touch-based computing with the iPhone’s 2007 debut, is taking more cues from the competition as struggling to come up with creating innovation. The company tries to diversify its smartphone as offering a budget version of its flagship.

In a break with the past, when the company introduced one iPhone a year, Apple yesterday unveiled two new models. The iPhone 5C will cost $99 to $199 with a wireless contract and comes in five different colors. A high-end iPhone 5S with fingerprint-security features, a speedier processor and better camera will cost $199 to $399 and be available in three colors. The more expensive version also includes a separate chip, called the “M7 Motion co-processor”, which can track motion data continuously without heavily draining the battery.

That suggests better track sports and fitness-related user activity, now the domain of wearable devices like the wrist-worn Fitbit, and lets developers experiment with apps that make use of those functions.

The new iPhones will be available in stores on Sept. 20. The high-end 5S will also have Touch ID fingerprint-sensor technology that is located on the phone’s Home button, which people can use to unlock their phone and confirm purchases from iTunes and Apple’s app store.

The launch of two new iPhones will help Apple reach a total of 700 million iOS devices sold by next month, Tim Cook confidently predicted on Tuesday. But even with the new mid-range iPhone 5C added to its line-up, technology analysts seemed doubtful that Apple could match the 1 billion Android devices that Google has already sold.

Apple’s new strategy includes what seems like a repackaging of last year’s iPhone 5 in a new poly-carbonate casing that comes in blue, pink, green, yellow and white to become the iPhone 5C. The company isnt pricing the 5C as cheaply as competitors’ handsets, with the phone costing $549 and up without a two-year contract, according to Apple’s U.S. website, showing it’s unwilling to trade its industry-leading profit margins for increased market share.

In the second quarter of 2013, the smartphone segment in western Europe grew only 19% year on year, while in China and the Asia-Pacific region (excluding Japan), smartphones increased 75% from last year’s second quarter. However, Van Baker, an analyst with Gartner, said $550 was still way too high to be truly market-expanding for Apple, especially in China and emerging markets.

The company is planning to introduce new iPads later this year, people familiar with the plans have said to Bloomberg.

Apple shares sank 2.3% yesterday while being 23% down on 1 year basis.