There is no shortage of excitement and expectation each time Apple launches a new phone. But the launch of iPhone5 has not generated any major surprises this time, say analysts.

Strand Consult said that it had no doubt that the new iPhone 5 will be the iPhone that will create the greatest negative impact yet on a number of mobile operators' revenue over the coming months.

"We would like to ask the mobile operators around the world just how many millions of dollars of their shareholders’ money are to be squandered to subsidise the iPhone 5 to the delight of Apple and its shareholders," said a Strand Consult report.

Apple has grown its sales over the years by two things - broader distribution through multiple operators in many countries and upgrading new models to old iPhone customers. But there may be challenges on the horizon for Apple. "Consider that in the last three quarters, the sales of iPhones have dropped in the number of units sold. Not only has Samsung had great success with their Galaxy II and III models (exceeding iPhone sales, in fact), but other manufacturers have launched serious alternatives to the iPhone. This puts Apple in the situation in which it will need to come up with something new, lest it fall to the fate of Motorola and the dreaded “Razr fatigue”." said Strand Consult.

Jan Dawson, chief telecom analyst at Ovum said the new iPhone 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 has created a device that is 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.

According to Ovum, “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, Android devices meet a much wider range of customer preferences and price points.”

thomas.thomas@thehindu.co.in

(This article was published on September 13, 2012)
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