Apple announced two new phones yesterday, the iPhone 5C and 5S and it was pretty much what was expected and talked about over the past few months. Plenty of reporters have done a great job covering the details, including ZDNet linked here, if you haven’t seen them already. The general consensus between media and analysts is that even with the addition of the fingerprint reader (called Touch ID) and the new processors, the A7 and the co-processor for motion it is calling the M7–this was just another iterative hardware update. Very similar from the 4S to iPhone 5 release last year.

Though each release has some new hardware improvement, innovation in hardware continues to lag behind software. Apple did reinvent the smartphone category 6 years ago so expectations are always high for a game changer. But it is impossible to do every time. In many cases, Apple just wants to try and stay ahead of the competition. After the first iPhone was launched, subsequent releases, the iPhone 3, 3G, 4/4s–had almost extreme improvements in the form factor, radio, screen resolution/size, processor and camera. That pace of innovation has yet to be matched in the past two years. Later releases–the iPhone 4S to 5, and now the 5S/5C haven’t kept pace with earlier change. And much of the competition has caught up in terms of hardware. The best Android devices-Samsung Galaxy, Moto X–the Blackberry 10 phones, Windows Phones–all have excellent hardware. In a sense, hardware innovations will be fewer and phone upgrade harder to sell. Phones are already fast–will two times faster make much of a difference and be noticed? Even technology innovations like the first 64-bit phone will be difficult to market to end users. The real interesting thing is now software is showing the greater possibilities of innovation. The hardware is just a shell for all the great apps to come.

Well the first part of Apple’s announcement this week was the release date of iOS7 on September 18. This is a radical new look and feel to the user experience and will be available on all Apple devices (except Gen 1 iPad). There are a ton of new features previously announced, both in the user experience and to enhance the ability for enterprises to manage Apple devices.

Apple’s CEO, Tim Cook,  announced that iWork, the company’s suite of productivity software (word-processing, spreadsheets, presentations as well as iMovie and iPhoto) “now consists of the best-selling mobile productivity apps on any platform”  and will be included for “free” in all new iOS purchases. This is Apple increasing the value of its hardware deal, by adding $40 worth of apps. It also targeting GoogleDoc products and Microsoft Office head on by establishing a beachhead in productivity apps by bundling them for free on the device. Apple is reinforcing the value of its hardware by adding software.

Many of the hardware features like the GPS, compass, accelerometer and gyroscope (some new devices even have temperature and humidity sensors) still haven’t reached their full potential in apps. They are barely used at all outside mapping and location. The new motion processor is expected to enhance fitness apps. Which is nice. The real impact will be if it can start doing health monitoring. Monitoring human vital signs, blood sugar levels, cholesterol etc will realize the vision of technology making a positive impact on daily health issues to save lives and reduce healthcare costs. These innovations are still to come, but today’s hardware can easily support these life saving features. We are just waiting for the apps.

So there’s still lots of change to come but much of it will be reliant upon and driven by mobile app developers. Software and mobile apps is the most exciting space to watch and holds the most promise for mobile innovation in the next few years. Well, until the iPhone 6 comes out!

Phillip Redman is VP of Mobile Solutions & Strategy at Citrix, and has tried every device at one time or another.