3 Big Focus Areas for Apple Inc.'s 2018 Premium iPhones

Next year, Apple (NASDAQ: AAPL) is expected to launch three new iPhones. Two of those three are expected to target the premium portion of the smartphone market, with a third expected to have a lower price point.

The first of the two is believed to be a direct successor to this year's ultra-premium iPhone X, while the second is expected to offer the same internals and basic selling points as the first, but instead of rocking a 5.85-inch organic light-emitting diode (OLED) display, it'll come with a gigantic 6.46-inch OLED display.

Today, I'd like to look at the three areas that I think Apple is going to focus on improving the most with next year's premium iPhones.

Camera performance

Camera performance and features are always good selling points, because virtually everyone -- from casual smartphone users to hardcore smartphone enthusiasts -- can understand and appreciate the benefits of improved cameras.

Apple has continued to make large strides in the camera performance of its iPhones, and the strong market response to last year's iPhone 7 Plus and this year's iPhone 8 Plus -- which both have unique camera features that the iPhone 7 and iPhone 8, respectively, don't have -- shows that customers value unique camera features.

Since Apple's next-generation 5.85-inch OLED iPhone is likely to start at $999 and the 6.46-inch OLED iPhone will come in at an even higher price point, Apple has quite a lot of freedom to use more complex and more expensive components in its camera subsystems -- such as larger image sensors and more advanced optics -- to improve image quality.

Indeed, I believe that the odds are good that next year's premium iPhones with OLED displays will deliver one of the biggest generational jumps in iPhone camera performance ever.

Screen size

The star of next year's iPhone lineup is likely to be the 6.46-inch OLED iPhone. While I think potential customers will be receptive to a larger-screen version of the iPhone X without any other substantive changes, my guess is that Apple isn't going to stop there.

Indeed, I expect that Apple will add software features to the 6.46-inch OLED iPhone that aren't present in the 5.85-inch OLED iPhone.

There are some of the obvious ones to expect, such as a landscape home screen and a version of Apple's built-in Safari internet browser that has special features in landscape mode, as the iPhone Plus phones have had since the introduction of the iPhone 6 Plus in 2014.

But I think with the sheer display size Apple will offer with the 6.46-inch OLED iPhone, the company will try to use it to cultivate additional selling points.

Perhaps the most obvious that Apple could go for is some sort of split-screen multitasking capability, like what Apple currently implements in its iPad and iPad Pro lineup. Such multitasking would be trickier to get right on a smaller display, but if Apple's user-experience team can get a good implementation of such a feature in the 6.46-inch iPhone, it could prove to be a significant selling point.

Anything that can get potential iPhone buyers to pay up for Apple's more expensive iPhones is a clear win.

Improving Face ID

With the iPhone X, Apple completely ditched its tried-and-true Touch ID technology, which enabled access to previous Apple smartphones with the user's fingerprint, in favor of its Face ID technology that uses a person's face to achieve the same goal.

While Face ID offers some clear benefits compared to Touch ID, it's far from perfect. Noted Apple analyst Neil Cybart, for example, tweeted that he's "unable to get Face ID to work first thing in the morning," which forces him to use a passcode to unlock his phone before he gets out of bed.

Ryan Shrout with Shrout Research had a more scathing assessment of Face ID. "So many instances of failed activations," he tweeted, indicating that the technology didn't work well in scenarios such as trying to unlock the phone when he's lying down on the couch, eating, and when his child is on his lap.

I think Apple will invest significantly in improving the quality of Face ID for the next iPhone. KGI Securities analyst Ming-Chi Kuo, whose predictions about future Apple products tend to be correct, doesn't think Apple will upgrade the hardware specifications of the TrueDepth camera for next year's iPhones.

Kuo is probably right that the underlying camera hardware won't see big upgrades, but I do expect substantial improvements in the software and algorithms used to perform facial recognition to improve accuracy, as well as an upgraded Apple Neural Engine inside the Apple A12 processor to speed the process up.

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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.