Can Apple's iPhone 5 launch really excite the marketplace?

Sep 12, 2012

With rivals taking aim with dozens of smartphone models, Apple needs to prove it can keep innovating

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THE BIG question about the launch of the iPhone 5 in San Francisco today is not whether it will sell - analysts are expecting sales of 10 million units within weeks, according to Bloomberg - but whether Apple can really excite the marketplace.

It's five years since the company launched the device and without a major upgrade some pundits are concerned about iPhone fatigue. "The iPhone is the make-or-break product for Apple," said Sarah Rotman Epps at Forrester Research. "Apple has the undeniable lead, but to stay on top they need to keep innovating."

The new model is likely to have a larger screen - 4in instead of 3.5in - and a different shell, will work with wireless carriers' fastest 4G or LTE networks and have various software improvements.

All will be revealed soon after 10am local time (6pm UK time) when the launch gets underway at the Yerba Buena Center in downtown San Francisco. It will be the company¹s first iPhone introduction since Steve Jobs died last October, the day after the launch of the iPhone 4S.

That launch - the first by Apple's new chief executive Tim Cook (pictured) - introduced the 4S to a tepid reception, yet sales soared. Forty-three per cent of Apple's $108 billion in revenue last year came from the iPhone. The phone accounted for 70 per cent of profits and drove the company to become the most valuable US company in history.

But with the global smartphone market worth some $219.1 billion last year, Samsung, Google Inc., Motorola Mobility, Nokia and HTC Corp, are all taking aim at Apple with dozens of new devices each year.

The lead Apple had in phone innovation is certainly diminishing and without the ruthless brilliance of Steve Jobs, it's not yet clear if the company can drive forward in the same way under the direction of Cook.

And according to a story in the Wall Street Journal, there's one key individual whose mind might be on other matters anyway. Jonathan Ive, the British-born design director at Apple, has just purchased a $25 million house on San Francisco's Gold Coast. With six bedrooms and eight full bathrooms - plus one half-bathroom - the 7,274-square-foot house also features views of the San Francisco Bay, an oak-paneled library, a courtyard garden and six wood-burning fireplaces.

After hitting an all-time high of $683.29 on Monday, shares in Apple fell 3.3 per cent by Tuesday's close in New York. As reports, the tech giant has a history of trending higher on Wall Street ahead of such launches, followed by sell-offs that bring the share price down.

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