Later this year, Apple (NASDAQ: AAPL) is expected to introduce an upgraded version of the company's current flagship smartphone, the iPhone X, as well as a larger-screen version of that upgraded version of the iPhone X.
Today's iPhone X has a display that measures 5.85 inches along the diagonal, and it's likely that its successor will, too. The larger sibling to the successor of the iPhone X is rumored to have an organic light-emitting diode, or OLED, display that measures a whopping 6.46 inches along its diagonal.
Image source: Apple.
While it's not surprising that Apple is almost certainly considering a larger version of the iPhone X, a new rumor -- which comes from Rosenblatt Securities analyst Jun Zhang -- is a bit surprising. Zhang says the 6.46-inch OLED iPhone could come with support for the Apple Pencil accessory that currently only works with Apple's iPad Pro family of products.
Does this rumor make sense? Let's dive in.
Trying to snatch share
The overall smartphone market is suffering from anemic growth, and the premium portion of the market that Apple primarily participates in is seeing even slower growth, no doubt thanks to the continued increases in the capabilities of lower-end smartphones.
Apple's job, then, is to try to grow its share of a pie that isn't growing much, if at all.
Image source: Apple.
Apple's primary competitor in the smartphone market is Samsung (NASDAQOTH: SSNLF), which offers a line of smartphones known as the Galaxy Note. These phones are differentiated from the company's mainstream Galaxy S-series smartphones in several ways, with the most notable being the inclusion of a stylus that Samsung calls an S-Pen.
If Apple's goal with the upcoming 6.46-inch iPhone X is to try to cater to users who usually buy Samsung's Galaxy Note line of products, then it'd make sense to add support for the Apple Pencil, or an accessory that's substantially similar but more suited to a handheld device rather than a large tablet.
Not only would including Apple Pencil support allow Apple to close a feature gap with Samsung, potentially making share gains easier, but it'd give Apple's largest and most expensive iPhone yet another selling point beyond the fact that it's bigger -- which, admittedly, is an interesting selling point in its own right. This could be good for Apple's iPhone average selling prices.
This rumor certainly makes sense, but only time will tell if it pans out.
Although adding Apple Pencil support to the upcoming 6.46-inch OLED iPhone would be an interesting selling point, there are certainly some technical challenges that Apple has to overcome to make it a reality.
For one, the 6.46-inch OLED iPhone would need to have the ability to increase the rate at which it polls for input when the Apple Pencil is being used, as the current iPad Pro models do. The current iPad Pro models read touch input at a rate of 120 times per second, but when the Apple Pencil is used, that rate increases to 240 times per second, which probably increases power draw.
Apple's challenge, then, would be to add this capability to the 6.46-inch OLED iPhone without significantly reducing battery life when the Apple Pencil is heavily used, since polling for input at a faster rate probably uses more energy.
It's also not clear how the Apple Pencil would be stored. The Galaxy Note line of devices allow the user to store the S-Pen directly in the device, but I don't think Apple will want to sacrifice on the appearance of the device to accommodate what is likely to be an optional accessory.
My guess is that Apple will sell an optional case for the device with a place to easily store the Apple Pencil, though it'll be interesting to see if Apple has a better solution.
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Ashraf Eassa has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Apple. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.