Even before Apple has announced the name or shape of its next iPhone — expected to be unveiled by chief executive Tim Cook on Wednesday — analysts are certain that it is going to dominate the Christmas market in the U.S. and, to a lesser extent, Europe.
“Our target is for Apple to sell 50 million iPhones in the fourth quarter, of which 28 million will be the iPhone 5,” said Neil Mawston, executive director of research firm Strategy Analytics. That compares with 37 million iPhones in total in the same period a year before, of which, Mawston reckons, 20m were the then-new iPhone 4S.
As ever with Apple product launches, expectations are running high. The breadth of its supply chain means the once Kremlin-like secrecy around iPhone launches has become sieve-like. There is certainty that the “iPhone 5” will have a larger, longer screen, thinner design, smaller SIM card, bigger battery and new connector; it is also expected to offer high-speed 4G/LTE wireless broadband, a step up from the 3G first added to the iPhone in 2008.
A Spotify rival?
What isn’t known is what the “rabbit in the hat”, the surprise extra, will be. Two years ago it was the high-quality “retina” display; last year, the Siri voice recognition system. The latest reports suggest some sort of music-streaming service, at least in the U.S., to rival Spotify and Pandora; others suggest the next iPhone will have technology for mobile payments.
Apple has declined to comment. Getting the iPhone right has become crucial for the Californian company, which is now the biggest business the world has ever seen, valued at some $628 billion. The product generates just under half Apple’s revenues, and a significant chunk of its huge profits. Any misstep would be disastrous.
Next week’s model will also be the first launched without Steve Jobs’s imprimatur, the Apple co-founder tested last year’s iPhone 4S and its key feature, the voice-driven assistant Siri, despite his terminal cancer — and thus a key test for Tim Cook and the company he has been running since August 2011.
Analysts feel so far he has kept it stable. “It’s still heading upwards,” says Mawston.
But Cook is not the showman that Jobs was, and leaves the presentations to Phil Schiller, long-time head of marketing, and Scott Forstall, the rising star who heads the iPhone and iPad software divisions.
Apple collects 71 per cent of the world’s smartphone profits, analysts reckon. Even though Samsung ships the most phones, it takes 37 per cent; Taiwan’s HTC gets 1 per cent. That total exceeds 100 per cent because it is offset by losses at Nokia, BlackBerry maker RIM, Motorola, Sony, LG and others.
The sector is dominated, though, by phones using Google’s Android system: in the second quarter of this year, 68 per cent of the 153 million smartphones shipped worldwide used Android, according to Francisco Jeronimo, smartphones analyst at IDC. Apple’s collection of just three models, the 4S, 4 and 3GS, made up 17 per cent.
“There are so many Android phones,” said Jeronimo. “I counted on our database 950 different devices in [one] quarter. .” What that means for the customer walking into a phone shop, he says, is confusion: “They look at the price, and the design, and look for a brand they’ve heard of.”
Apple has built its brand into something that users trust as reliable and simple, he says. Benedict Evans, of Enders Analysis, said that adding features was not enough.
“Apple doesn’t put a technology into a product without knowing what people are going to do with it. There wasn’t a front-facing camera until there was also a video-calling service [called FaceTime].” — © Guardian Newspapers Limited, 2012
