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  • So the iPhone 5 Isn’t Dead Yet

    May 9th, 2013

    So if you can believe some of the media chatter in recent months, the iPhone 5 was one huge failure, and therefore Apple is no longer the company to beat in the tech universe. Samsung is emerging victorious, except for the fact that, in the critical December quarter in 2012, the iPhone 5 beat the Samsung Galaxy S3 by a large margin. Mano a mano and all that.

    Indeed, there are even reports that production of displays for the iPhone 5’s successor, the alleged iPhone 5s, will begin next month, making way for a possible introduction at a special Apple media event anywhere from August through early September. But that would simply be in keeping with an almost annual upgrade cycle. That doesn’t strike me as a rush, and didn’t Tim Cook state that Apple’s major new product intros wouldn’t begin until the fall?

    So it was interesting to see that T-Mobile offered the iPhone 5 for sale on April 12, and, over the next few weeks managed to sell 500,000 of them. Sure, there was some level of pent-up demand, and it’s also true that a million or two iPhones were already activated on T-Mobile’s network, despite the lack of official support. Assuming T-Mobile can sell another 500,000 or even a million more before the end of June, that would amount to a pretty credible number, one that no doubt would provide a needed boost to iPhone sales if sales don’t drop too much at other carriers around the globe.

    Now the most important aspect of this news is the fact that, until the iPhone was offered, T-Mobile’s prospects were on the decline. Customers were leaving, and T-Mobile’s leadership did admit the lack of the iPhone was a key factor. Now that this shortcoming has been remedied — and T-Mobile is engaged in an expensive upgrade of their network — both the carrier and Apple stand to benefit. T-Mobile has also acquired Metro PCS, a small regional carrier, which will surely enhance the combined carrier’s network as the two systems are integrated over the next year or two.

    Recently, a tech publication did a bake-off of the camera system on the iPhone 5, which, as you recall, came out last September, against the cameras for the HTC One and Samsung Galaxy S4, which first reached dealers last month. You assume that the new hardware would be more capable of exacting the best possible image from their sensors under a number of different lighting conditions. Overall, the iPhone 5 was still judged better. Among smartphones, the iPhone reportedly deliver more online photos than the competition. Surprisingly, the iOS also counts for more Web traffic than other platforms.

    Now this doesn’t mean that early demand for the new flagship handsets from HTC and Samsung won’t reduce interest in the iPhone this quarter somewhat. You have to expect that a lot of buyers want the latest and greatest. But those who are already invested in iOS are hard sells, and not everyone reads the tech columns in newspapers, or tech blogs. Or even Consumer Reports for that matter, so they aren’t aware of all the fine details of the various smartphones and mobile platforms.

    Instead, you can expect many will stick with what makes them comfortable. Surveys also show that far more Android users plan to jump to the iOS than vice versa; three times as many. Less customer churn also helps Apple on the long haul, because loyal owners don’t care if sales drop in any particular quarter, or if the stock price is higher or lower. If their iPhone delivers a satisfactory user experience, and roughly 95% or so say it does, it’s hard to claim they’d be ready to jump ship the next time.

    But the future of the iPhone and iOS will really come into focus during the keynote address at June’s WWDC. There Apple is expected to lift the veil off iOS 7 and OS 10.9. There are already rampant rumors about the expected changes, such as ditching the skeuomorphic excesses in the interface and dealing with long-standing inconsistencies. There may also be improvements to the venerable Mac Finder, which has been roundly criticized for years since OS X arrived. The iOS is said, by some, to be getting stale, so maybe Apple’s changes will be designed to make it seem more modern, or at least different.

    Sure there may be more efforts to integrate some interface elements in iOS and OS X, but don’t expect anything that resembles the whole widget approach Microsoft took in the failing Windows 8. Apple’s product people won’t fall down that rabbit hole.

    However, the real attraction of Apple is the hardware, and few expect more than a Mac refresh in June with more powerful Intel hardware, although it would be nice to see SSD drives available at more affordable prices. To say Apple overcharges is an understatement.

    When it comes to the iPhone, with new competition, and anticipation of the next refresh, there’s no doubt there will be somewhat of a sales falloff, particularly at the end of the quarter. But that doesn’t mean there aren’t loads of customers who need one now, and aren’t as concerned that it may be seen as “obsolete” in a few months.



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