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Apple charts new terrain with its iPhone X

New Apple iPhones
Apple unveils new iPhones, Apple TV in showy presentation 06:11

In the 10 years since Apple's (APPL) first iPhone upended the world of cell phones (as well as retail, computers, the internet and pretty much everything else), the tech giant has been lambasted for being "evolutionary, not revolutionary." Critics say the company has satisfied itself with incremental improvements rather than creating entirely new product categories, as it did in decades past.

But its Tuesday product launch saw the world's most valuable company by market capitalization make another futuristic leap when it unveiled a new category of smartphone. The iPhone X (pronounced "ten"), which CNET called "Apple's largest, priciest, most ambitious iPhone," has features that put it on the level of a personal computer: sharper screens, higher resolution, better cameras, an all-glass front and back and -- most significant -- facial recognition technology that does away with the Home button. But that last feature could also prove to be a stumbling block.

The iPhone revolution 01:46

At $999 for the base model, with 64 GB of storage, it's the priciest iPhone yet. That puts it in the ballpark with its competitor, the Samsung Galaxy Note and falls in line with the company's historic strategy of incremental price hikes (along with incremental improvements). 

Here are the X's technical specs:

  • 5.8-inch OLED display with 458 pixels per inch

  • 2,436 x 1,135-pixel resolution (Apple calls this a Super Retina display)

  • Dual 12-megapixel rear cameras

  • Portrait mode with portrait lighting feature

  • Front-facing camera has portrait mode now, too

  • No home button -- swipe up to go home

  • Face ID to unlock the phone -- just hold your phone up to your face

  • A11 Bionic processor

  • Glass back and front

  • Wireless charging support

  • 64GB and 256GB options

  • Water- and dust-resistant

  • Animojis make emojis out of you

  • Available in black and space gray (no gold)

"This is about as good as innovation gets on a mature device," said Jefferson Wang, senior partner at IBB Consulting, in a research brief. 

What does this mean for consumers?

Aside from the impressive camera improvements, the biggest difference from previous models is that the iPhone X doesn't have a home button. Facial-recognition technology called FaceID unlocks the phone, and swiping up takes the user to the home screen. 

The FaceID technology recognizes a user's face by mapping 30,000 invisible points, Phil Schiller, Apple's head of marketing, explained Tuesday.

"FaceID learns your face, even if you change your hairstyle, if you put on glasses, you're wearing a hat. FaceID learns who you are," he said. The company painted it as an improvement over existing TouchID technology, which unlocks an iPhone with the touch of a finger by identifying your fingerprint. For TouchID, Schiller said, the chance of two unrelated people sharing the same biomarkers is one in 50,000. For FaceID, it's one in a million.

FaceID will be operational on third-party apps that currently accept TouchID, making it easier than ever for consumers to make purchases or other transactions. For some analysts, it's only a matter of time until the same software makes its way into other consumer-facing industries, from retail to banking. 

"The consumer is driving more and more convenience, and these companies know it," said Michael Levine, head of marketing at Photon, a digital agency. "They're trying to make it easier and easier to achieve less friction in the marketplace. ... I can see this in retail very easily."

But privacy activists noted the potential for abuse of facial-recognition software. Garry Kasparov called it a "real threat in authoritarian states." Other governments have used it to identify and shame jaywalkers, or to keep track of protesters. 

It's unclear if the FaceID technology will be optional, or if -- like Siri, the voice assistant -- it will be baked into the phone, impossible to turn off or remove.

With the iPhone responsible for two-thirds of Apple's revenue, the fortunes of the $835 billion company depend on pleasing consumers who have surplus income to spend. 

That remains true with this latest product release, even though Apple also unveiled new versions of the Apple TV ($179) and the Apple Watch ($329 or $399), the latter of which will still require the owner to have an iPhone for its full functionality. 

"The  blessing and the curse of the iPhone is it's a really high price point," said Jeff Reeves, executive editor of InvestorPlace. Making up the same amount of profit elsewhere requires "a heck of a lot more Apple Watches or Apple TVs," he said. 

Moreover, the premium-priced product does little to distinguish Apple in China, the company's next big market, where it has less than 10 percent of the smartphone ecosystem. To succeed there, Reeves said, Apple needs to think different -- really different.

"What they do in America is rely heavily on their brand and being premium," he said. "It's not necessarily a path to growth in China. There better be some other trick up their sleeve."

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