With any iPhone launch the industry’s commentators are out in force, and Wednesday’s unveiling was no different. Here’s what some of them had to say about the iPhone 5:
David McQueen, principal analyst at Informa Telecoms & Media, believes the handset will help Apple post record revenues:
“Looks like Apple has delivered a new iPhone that offers few surprises but promises a significantly better user experience as a result of its faster LTE connectivity, processor speeds and better Retina display.
“It has provided a much needed physical update of the device, despite the screen not being the largest in the smartphone market and it still lacks NFC and wireless charging. From a connectivity angle, the iPhone 5 needed LTE connectivity as it becomes more fundamental for all new flagship devices. With Apple’s strong existing relationships with a number of major carriers, the new iPhone model promises great potential sales for the 4Q holiday shopping season, even in the face of new LTE-capable devices from Samsung, HTC, Nokia and Motorola also being launched in 4Q.
“While the new hardware may not quite stack up against other products expected in market, it is Apple’s ability to create stylish, desirable products attached to a rich set of services that it hopes can still set it apart to create differentiation. The new optics, an upgrade to Siri, photographic capabilities and mapping functionality also add to the importance of those elements for the competitive landscape, especially in light of recent announcements from Nokia, Samsung and Microsoft.
“With the launch of the latest device from Cupertino penned in for the 21st September just days before the end of the quarter, it is likely that the full impact of iPhone sales will not register until the next quarter, 4Q12, the most important in the calendar.
“The iPhone 4S, which will remain in market, but at a significantly reduced price, will help boost sales, and Informa Telecoms & Media expects total iPhone sales to reach close on a company record 50 million in 4Q12. However, Apple won’t have it all its own way to the end of the year as it faces continued pressure from Samsung and now Nokia with its new range of Lumia devices running on the Windows Phone 8. In combination, the strength of these devices and platforms will combine to give the most competitive and intriguing smartphone quarter for a number of years.”
Matthew Howett, practice leader of Ovum’s regulatory telecoms team, believes that EE being the only UK operator able to sell the LTE version will prompt legal action from the operator’s rivals:
“By supporting LTE using the frequencies that EE are deploying their 4G network over, EE will effectively have an initial monopoly on sales of the iPhone 5 since customers will only fully benefit from its capabilities if they take it though EE. The question will of course be how many non-EE customers will make the switch. Many will already be in contract with their existing provider, however with more than two years since the last major release (the iPhone 4), there could be a good number of people in the market for a new mobile provider.
“For Vodafone and O2, who have spoken out against EE’s early 4G launch, this could well be what they were waiting for before launching a legal challenge to Ofcom’s decision. The regulator must be fairly confident of its position and has said will be ready to defend it. The impact the challenge has on EE’s launch will crucially depend on whether a court would approve a suspension of service. If so, the reputation to what is only a one-day-old brand could prove fatal.”
Mervyn Kelly, EMEA marketing director from network solutions provider Ciena, said that the device will result in a significant growth in network data traffic for operators:
“While network operators know the excitement Apple launches generate amongst their customers, each new product launched by the tech giant also brings increased challenges around connectivity and capacity.
“An earlier report by Arieso shows that users of the iPhone 4S demand three times as much data as the iPhone 3G and twice as much as its predecessor the iPhone 4. This trend is set to continue with the launch of the iPhone 5. As features on mobile devices become more compelling and comprehensive, service providers need to ensure networks are able to constantly evolve in line with demand.
“The arrival of the iPhone 5 has brought with it more data hungry applications and capabilities than previous devices. Its deeper integration with Facebook means that consumers will be inclined to upload and download larger files than ever before. Apple Passbook, offering the ability to store retail coupons and travel documents, will also boost demand. The increase in the consumption of such real-time, data-rich content will intensify the challenging situation operators find themselves in, trying to satisfy the growing demand for bandwidth in a viable and profitable manner.
“Key to this is ensuring that the backhaul portion of the network can cope. The backhaul connects base stations to the core network and has a great impact on the quality of service consumers get. Operators need to optimise their backhaul networks to handle high-bandwidth services. Carrier Ethernet offers operators a sound solution to this challenge, combining a cost-effective and scalable architecture that allows carriers to control costs while supporting the next-generation of mobile applications. Putting in place sufficient capacity and resiliency in the backhaul will help operators to cope with the demand for additional bandwidth generated by increasingly powerful smart devices such as the iPhone 5.”
Jan Dawson, chief telecoms analyst at Ovum, provides his view of some of the major changes from the previous version, such as its increase in vertical height:
“The device highlights the inherent risks involved in Apple’s strategy of only releasing one device at a time, in that it always has to strike a compromise that is most likely to appeal to a wide base of users. The new device strikes that compromise most dramatically in the increased vertical height. With many Android and Windows Phone devices now significantly larger than the iPhone 4S and gaining popularity, the pressure has grown on Apple to release a larger device. By only increasing the vertical height, it’s created a device that’s notably taller and thinner in aspect ratio than most of those Android devices, and as a result it will stand out, which may not be a good thing. While keeping the device small enough for some hands is important, many customers would have wanted something bigger, and they’ll be disappointed.
“On the other hand, the addition of LTE, the improvements in battery life, performance and the camera and so on will help the device appeal to existing iPhone users, and either close the gap or broaden its lead against competing devices. It seems likely that Apple will nevertheless sell tens of millions of iPhone 5 devices in the next few months and well over 100 million in total over the next year. iPhone users who are currently using an iPhone 4 and have the opportunity to upgrade will no doubt do so in large numbers, and the more fanatical iPhone 4S users will do the same. It will also sell lots of the previous two generations of devices as those go on sale at a lower price. Android’s lead in total shipments and installed base will continue to grow, however, as Apple’s devices continue to target just a subset of the addressable market and Android devices meet a much wider range of customer preferences and price points.”
Shaun Collins, founder of CCS Insight, believes that UK operators’ marketing departments will be hard at work formulating ways to entice subscribers:
“The inclusion of LTE1800 in the new iPhone5 gives EE a de-facto exclusive on the product for 4G in the UK. This will undoubtedly leave EE marketing departments purring at the possibilities. However, it will do little to ease the war with rival operators and we can expect Vodafone and O2 to be formulating their Plan Bs pretty quickly.
“The question is, will the iPhone be different enough for customers who have been impressed by products from Samsung and HTC this summer? This remains to be seen, but with many UK subscribers waiting to see the iPhone5 before committing to their next contract, the operators will have a fight on their hands for these customers in Q4.”
Fred Huet, managing director at Greenwich Consulting, added that the exclusion of an NFC chip may hinder the firm’s ability to make a mark in the mobile payment market:
“Upon its launch the iPhone 4s was met with some level of disappointment and yet, despite this, it continued to outpace the sales of its predecessor, the iPhone 4, at an impressive rate.
“However, the decision to omit NFC in the iPhone 5 could cost Apple. 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.
“Fully equipped with a 4G/LTE support, today’s launch could act as a call to action to operators and infrastructure providers who will need to do their utmost to help unlock the true potential of the device. This could prove to be a pivotal moment for these technologies and will go a long way in helping them to become mainstream, thus presenting a range of exciting opportunities for businesses and consumers.
“Latest reports suggest that Android is currently leading Apple iOS 3:1 in Q2 and the success of the iPhone 5, dubbed by many as the company’s biggest iPhone launch ever, could really prove to be a pivotal moment in not only helping to reduce that ratio, but also in potentially increasing its market share, following recent litigation pressures against Samsung.”
And Dominic Sunnebo, global consumer insight director at Kantar Worldpanel ComTech, expects to see a surge in Apple’s market share:
“The release of the iPhone 5 will give Apple a huge spike in market share as the large number of out of contract iPhone users upgrade to the new device. Apple customers are particularly loyal to their brand, and around 90 per cent of Apple consumers who are out of contract have told us they plan to upgrade to the latest model.
“Apple’s ability to attract new customers has faltered over the last quarter as the iPhone 4S has been out ‘specced’ by more recent flagship products from Samsung and HTC models and this has impacted on their market share. However, Apple can expect huge sales of the iPhone 5 to new and returning customers and a resulting leap in market share. Equally important to Apple’s market share over the longer term is their pricing and targeting strategies with their existing devices.”
With Amazon and Google launching smart home initiatives, have the telcos missed out on their chance to cash in on this market?
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