With iPhone 5, Apple is out to prove it's still the king
Well, at least king for the holidays. But a lot has changed since the last massive update to the iPhone came out more than two years ago.
Apple made the case today that its newly unveiled
But for seemingly the first time, it's not exactly a slam dunk that Apple's device belongs there.When the
While it may no longer be the obvious choice for smartphone buyers, the iPhone 5 will still shake up the market. Apple's cachet and its world-beating market presence still means every other company needs to watch out.The iPhone 5 debuted today at the usual hype-infused Apple event, with Cook and his team taking steps to reestablish the iPhone's leadership role in the world. Executives talked up the various upgrades and new features, with Cook working to leave the impression that Apple's products remain a step up from those of the competition. "Only Apple could create such amazing software, hardware, and services and put them together into such a powerful, integrated solution," Cook said at the event.
In hindsight, the competition had it easy with the iPhone 4S, which launched last October but was largely seen as a placeholder until the arrival of the iPhone 5. It featured the same design as the iPhone 4 and only software and internal hardware improvements. Apple managed to juice sales by expanding its distribution to even more wireless carriers, but despite impressive sales, it clearly couldn't sustain the momentum or buzz of previous iterations of the smash-hit product.That left other high-profile phones to make their mark, including the Motorola
Previous iPhones have all been smash hits, leading the market for an inordinately long amount of time. The iPhone 4S, despite suffering a relatively quick loss of buzz, was the leading smartphone at each of the national carriers through the summer before ultimately in August. So even if the iPhone 5 enters a much more competitive field, it's still poised to break records and surpass its predecessors, largely owing to the growing pent-up demand for the product. Sales of the iPhone have cooled in recent months, and Apple has attributed that slowdown to anticipation for the new device. "The iPhone 5 will be VERY competitive in the smartphone market," said Soumen Ganguly, a director at consulting firm Altman Vilandrie & Co. "The proportion of iPhone customers who go to another smartphone is quite small, and the iPhone 5 gives a whole set of new reasons for iPhone 4 and 4S users to upgrade."
The expectations are high. AppleAnother difference from the iPhone 4 launch: much wider availability. Over the last year, Apple has worked to make the iPhone accessible to a surprisingly larger number of carriers, including regional wireless providers such as Cincinnati Bell and prepaid carriers such as Virgin Mobile and Cricket Wireless. Overseas, the company has also worked to expand its distribution, and is expected to eventually sign a deal with China Mobile to better tap the world's largest market. Apple Stores across the country will undoubtedly see long lines as consumers and Apple fanboys scramble to buy the latest iPhone. But it will be interesting to see if the longer term momentum and excitement goes the way of the iPhone 4 or the iPhone 4S. At stake is the base of consumers that don't yet own a smartphone. China is considered a key growth driver for Apple, but nearly half of the consumers in the U.S. still don't own a smartphone yet. Whether Apple can sustain its buzz will help sway the next wave of consumers, determining whether they buy an iPhone or Android smartphone, or even an alternative such as a BlackBerry or a Windows Phone. Ripple effect , according to Asymco analyst Horace Dediu, noting that the new device should sell as much as all of the previous generations combined. JP Morgan believes the iPhone 5 could add .
Consumers weren't the only ones tuning in to Apple's presentation today; the entire industry is likely on Apple watch. That's because the iPhone is , as well as hurt or give a boost to adjacent industries such as the PC or chip businesses.
Apple's competitors have to be nervous. The Galaxy S3 has been riding high on nearly every carrier, but that reign will undoubtedly end with the iPhone 5 getting into the game.Rivals such as HTC, and LG could continue to struggle as their own coming announcements could get overshadowed by the iPhone launch. The same goes for the recently unveiled Nokia
Updated at 12:34 p.m. PT: To include a comment from a consultant and add additional background.