Apple unveiled the new iPhone 5 today as it hopes to answer the question that’s been top of mind for everyone from users to analysts to rivals: Is it a big enough change in design and does it have exciting enough new features to get people – tens of millions of people — to buy it and hold competitors including Google and Samsung at bay?
If you ask the analysts, the answer is yes. They’re going by the uptake in iPhone sales after each new update was released — there’s been a new model every year since former CEO Steve Jobs led Apple into the smartphone market in 2007. Last year’s iPhone 4S, which introduced Siri voice recognition technology into the device, has been a big seller for the company, especially in its fastest-growing market, China. The iPhone is Apple’s biggest moneymaker and now accounts for almost half of sales. The company has sold more than 244 million since its introduction.
The new iPhone 5, to be available in the U.S. Sept. 21, has a larger 4-inch Retina display, support for faster LTE wireless networks, a new custom chip designed by Apple called the A6 that enabled the company’s enginners to create a thinner, lighter smartphone with a bigger screen. It’s 2.31 inches wide and weighs in at 3.95 ounces. It’s made entirely of glass and aluminum, Apple CEO Tim Cook told the crowd today.
Most of those features have been long rumored, making this one of Apple’s less exciting product launches. Even so, it does add up to a new smartphone that should “have a major impact on the market,” said Gene Munster, an analyst with Piper Jaffray, who attended today’s event. He stands by his prediction that Apple can sell 6 to 10 million in the first week after it becomes available. Apple sold 4 million iPhone 4S units in the first three-days after its release.
“The biggest things are the faster Internet and the bigger screen,” Munster said. “For the past five years, they’ve had the same screen and that’s a big deal. It’s where they’ve been losing share in developed countries to Android.”
The iPhone 5, available in black and white, is priced starting as the same as the previous generation — $199 with a two-year contract, with higher capacity devices to be available for $299 and $399. It also runs a new version of Apple’s mobile operating system, iOS, which adds 200 new features including its own Maps program to rival Google’s offering.
“While the look of the new iPhone may not take your breath away with its screen size or unfamiliar look, the actual level of engineering and design that has gone into it is quite amazing,” said Al Hilwa, an analyst with IDC. “The power of the chip and the new graphics capabilities alone will however prove a cornucopia for app developers in the ecosystem.
Cook, who took over as CEO from Jobs a year ago, earned his share of applause from a crowd of analysts, media and employees who gathered in San Francisco for today’s unveiling. Cook was joined on stage by Apple’s other top leaders to show off various features of the device, including Phil Schiller, global marketing chief, and Scott Forstall, who oversees the iOS software. Jonathan Ive, Apple’s lead designer, discussed the design of the phone in a video shown to attendees.
“It’s an amazing time at Apple, an extraordinary time,” Cook said during the two-hour event, which concluded with a performance by musical guest Foo Fighters.
Apple didn’t deliver on all of the rumored features, leaving off any mention of NFC — Near Field Communication technology seen as a key to mobile payments. Apple, which has more than 400 million iTunes customers who have turned over their credit card data to buy music, TV shows, movies and apps through Apple’s stores, are a ready audience for mobile payments, said Fred Huet, managing director at Greenwich Consulting.
“The decision to omit NFC in the iPhone 5 could cost Apple,” Huet said. ”It is just a matter of time before the smartphone replaces the plastic card, and by skipping this technology, Apple may have missed a valuable opportunity to take the lead in this market. With over 400 million active credit card accounts on file, Apple had a prime opportunity to convert its customers using a sleek mobile payment system tied to the iPhone. Instead they could find that they have fallen behind closest rivals Samsung, Nokia and indeed Motorola, all of whom introduced the technology into their devices last week.”