If you look just at the specs, the iPhone 5 is no longer the best of breed smartphone. Plenty of other handsets measure up including the Samsung Galaxy S III and the new LG Optimus G. In fact, these phones have superior specs on nearly all fronts with much bigger full HD screens. The new LG handset has a quad-core processor with a 13-megapixel camera and a bunch of other whiz bang features that make the iPhone look pedestrian. In fact, almost every single spec that Apple touted in its September 12th unveiling has been available with other handsets, some for as long as two years.
British tech site T3 does the most honest review of the iPhone 5, writing:
There’s no denying that the iPhone 5 is a lovely thing, and the best iPhone to date. It could well be Apple’s best-selling unit ever.
But a lot has changed in a year, and the current crop of Android superphones – and the incoming Windows Phone 8 handsets – have closed the gap. For nearly every “new” feature announced at the Keynote, there was a Samsung, Android, Windows, Nokia, Sony or HTC fan saying “my phone already does that.”
Apple’s competitors never been closer in terms of quality, function and aesthetics and from your feedback on our social networks we know how many of you are jumping ship to phones with a bigger screen and more features.
Given that iPhone 4S users can upgrade to iOS 6 and do just about everything the iPhone 5 can do, and that Android users can get similarly impressive handsets for less dosh, we reckon the smart money won’t all be going on a new iPhone this year, even if the mass market can’t get enough of it. It’s good, very good. But it’s no longer the best around.
Does it matter, though?
I would argue it doesn’t matter what kind of specs these phones have right now because the Phone 5 is all about the iPhone upgrade cycle. See iPhone users are locked in. They aren’t going to leave the Apple world to switch to a Galaxy SIII or any other Android handset. And they certainly aren’t going to buy a Windows 8 phone when these come out. The question is whether the iPhone 5 is good enough to lure them into an upgrade from the iPhone they already own. That’s what this is about. And judging from massive Phone pre-orders, the answer is resoundingly yes.
MG Siegler wrote what I consider the ultimate fanboy post at Tech Crunch demonstrating that this is a phone that iPhone users will want:
You pick it up and it almost feels fake. That’s not to say it feels cheap; because it doesn’t — quite the opposite, actually. It just doesn’t seem real. Certainly not to someone who has been holding the iPhone 4/4S for the past two years. It feels like someone took one of those devices and hollowed it out.
The iPhone 5 is here.
I’ve had the opportunity to play around with the latest iPhone for the past several days. I won’t beat around the bush: it’s fantastic.
Of course, you’re probably expecting me to say that. But that doesn’t mean I’m wrong. The fact of the matter is, you can either listen to me or lose out. You’re going to want this phone.
Reading the press coverage since the unveiling, you may have heard that the iPhone 5 is disappointing, or boring. Those people, quite frankly, are fools. They either haven’t actually used the device, or only played with it for a few minutes in the hands-on area after last week’s event. (Or worse, they’re projecting their own boredom in their jobs due to Apple’s dominance of the tech scene these past few years.) Using a device on a regular basis is what really matters. And in that regard, the iPhone 5 shines in just about every conceivable way.
In fact, I’ll go a step farther: I really do believe this is the best iPhone upgrade that Apple has done yet (besting the iPhone-to-iPhone 3G jump and the iPhone 3GS-to-iPhone 4 jump). As such, it’s the best version of the iPhone yet. By far.
–With iPhone 5, Apple Has Chiseled The Smartphone To Near Perfection
What’s more is the iPhone release comes at the time of year when people are doing their holiday shopping for a good reason. You can bet that many new smartphone users will port into the smartphone world right into a new iPhone 5 this holiday season – as a gift or a ‘self-gift’. Though I question how Apple’s margins will hold up, Apple will still have a stellar quarter and probably a good holiday season too as a result.
But then the upgrade cycle will turn against them. It’s funny that people were talking about the iPhone upgrade cycle adding significantly to GDP. Paul Krugman caught onto this and insisted it was an implicit recognition of the “broken windows” theory. Clearly, Samsung and all the other handset makers who collectively sell twice what Apple sells are adding gross product, it’s just that it isn’t gross domestic product.
The whole GDP thing is rubbish. See, this isn’t a fanboy post. I’m looking at the bigger picture here. And the bigger picture still favors Android. While Apple is on pace to sell 1 billion iOS devices by 2015, Android will get there next year. So, the same storyline is still intact. Apple is the leader of the pack in terms of brand, margins, and profitability. Apple enthusiast Horace Dediu believes Apple’s margins may even be increasing, despite its now selling older handsets to beat back Android. No matter, increasingly Android is winning. When the Apple upgrade cycle wanes in late January and February, it will be all Android. And there will be a torrent of Android handsets sold.
So my view is that Apple will continue to be highly profitable, its brand and premium positioning affording it huge margins other handset makers can only dream of. But that doesn’t matter on a forward-looking basis if those margins and/or market share and/or sales growth decline. Nor does it matter how thin Apple’s competitors’ margins are any more than it mattered in the PC-Mac wars of the 1990s. What I see is increasing penetration by Android handset makers into the mobile smartphone marketplace. And I expect this trend to continue. Moreover, the Amazon threat in tablets is real and could become a nasty handset threat during Apple’s next upgrade cycle in Fall 2013. I have written that I expect the margin pressure to show sometime this year and I believe that earnings growth will slow in 2013 as well, making 2013 the year when Apple’s shares feel the impact of the new competitive landscape.