September 11, 2012

iPhone 5 launch: Apple’s latest powerhouse or a snooze?

A man talks on a mobile phone in front of an Apple store in downtown Shanghai. 
Will the newest iPhone be a juggernaut that boosts the U.S. economy and sends Apple’s already-high stock soaring even further into the stratosphere, or will it be a ho-hum piece of technology that leaves consumers cold?

With Apple set to launch the latest version of its trend-setting phone Wednesday, we spoke to some experts about what kind of new bells and whistles to expect, and what kind of impact the new phone will have on the market.

What’s it called?

While most commentators are referring to the new phone as the iPhone 5, Apple hasn’t confirmed that’s what they’ll be calling it. (Actually, as per their usual custom, they haven’t even officially confirmed they’re launching a new phone). And last time everyone expected Apple to announce an iPhone 5, they threw the world a curveball and called it the iPhone 4S instead.

What’ll it have?

In all likelihood, says Jefferies and Co. analyst Peter Misek, the new iPhone won’t be a radical redesign, even though there will be some new bells and whistles. One of the more significant changes Misek expects to see is an ability to use high-speed LTE/4G networks.

“I expect it will be LTE enabled, and that it will have a 4-inch screen instead of a 3 and a half. It will probably also be thinner, and there will be some tweaks to the OS, but that’s pretty much it,” said Misek.

Another suggestion floating around the internet is that the new phone includes a different-sized charging port, meaning that none of those extra devices people had previously bought to plug their iPhones into (say a clock radio or charger) would fit the new one.

Some observers are also expecting — or at least hoping — that the new phone will be enabled with a Near Field Communications (NFC) chip. That would enable you to use your phone as a wallet, for example, simply by tapping it on an NFC-enabled reader. NFC technology is also used in some cars.

Tim Cook, chief executive officer of Apple, is expected to unveil the tech giant's latest iPhone offering on Wednesday. (AP Photo/Mark Lennihan, File)

Will it be a hit?

According to JP Morgan Chase analyst Michael Feroli, sales of the iPhone 5 could boost the size of the U.S. economy by up to half a percentage point in the fourth quarter. Apple could sell as many as 10 million of the new iPhones by the end of September alone, according to Gene Munster, an analyst at Piper Jaffray Cos. By contrast, it took Samsung Electronics Co. about 50 days to sell 10 million of its flagship Galaxy S III smartphone.

According to some estimates, the iPhone already accounts for roughly 70 per cent of Apple’s profits.

Is it a game-changer?

Even though Apple will sell millions of the new phone, it won’t radically alter the landscape of the smart phone industry, Misek says.

“There’s essentially a duopoly between Apple and Samsung right now, and this isn’t going to change that,” Misek predicted.

That said, Apple’s marketing prowess means the new iPhone will make life even more difficult for smaller players, such as Research in Motion’s BlackBerry, or Nokia’s Windows-based phones.

“It’s going to crowd out everything else in the market. It’s going to be very difficult for anyone else to get any kind of attention,” said Misek.

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