Has Apple Done Enough With the iPhone?

ANALYSTS have questioned whether Apple has done enough to stave off an Android onslaught with its upgraded iPhone 5.

Telsyte research director Foad Fadaghi said the iPhone 5 "was missing in each component differentiator" compared with features offered by Google Android-based handsets, and was more an upgrade for the Apple faithful.

"It seems it's designed for existing Apple users. It's not going to create the 'wow' factor for people who use high-end Android handsets to switch over," Mr Fadaghi said.

He said Apple was unlikely to increase its market share in Australia but was likely to 'solidify' its position and maintain its current market share.

"It's a saturated market, something that no doubt Apple has considered when it designed this device."

The iPhone 5 is a thinner, lighter smartphone with a longer 4-inch screen and is compatible with Australian fourth generation LTE mobile networks being rolled out by Telstra and Optus. It will come with a new version of Apple’s mobile operating system – iOS 6.

Jan Dawson, chief telecoms analyst at Ovum, said the iPhone 5 highlighted risks involved in Apple's strategy of only releasing one device at a time. Apple always had to strike a compromise that would 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's created a device that's 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.

He predicted Apple would sell well over 100 million iPhone 5 handsets over the next year.

Ovum however said Android's lead in total shipments and installed base would continue to grow, as Apple's devices continued to target just a subset of the addressable market and Android devices met a much wider range of customer preferences and price points.

Informa Telecoms principal analyst David McQueen said Apple had delivered a new iPhone that offered few surprises but promised a better user experience with faster LTE (long term evolution) connectivity, processor speeds and better Retina display.

"The iPhone 5 release has provided a much needed physical update of the device, despite the screen not being the largest in the smartphone market and it still lacks NFC (near field communication) and wireless charging," Mr McQueen said.

"While the new hardware may not quite stack up against other products expected in market, it is Apple's ability to create stylish, desirable products attached to a rich set of services that it hopes can still set it apart to create differentiation.

"The new optics, an upgrade to Siri, photographic capabilities and mapping functionality also add to the importance of those elements for the competitive landscape, especially in light of recent announcements from Nokia, Samsung and Microsoft."

He said 2012 had already been a strong year for Apple, having sold more than 60 million iPhones in the first half of the year, although sales had dropped by more than 9 million units from Q1 to Q2 this year, largely due to consumers waiting for the release of the iPhone 5.

Adam Leach, leader of Ovum's Devices and Platforms practice, said consumers were notoriously fickle when it comes to buying handsets.

"Without the continued innovation which we are accustomed to with Apple, the company risks losing consumer appeal. The iPhone re-defined the smartphone category in 2007 but it can't rely on past success to guarantee its future or rely on litigation to keep its competitors at bay."

MobilePhoneFinder.com.au, a smartphone specialist which analyses and compares phone plan prices, said the upgrade was "slightly underwhelming".

"We are of the view it's very much an iteration of the (iPhone 4S)," director Fred Schebesta said.

"We are slightly underwhelmed. Sure, there's been engineering advances but no quantum leap.

"Take the (new) iPod Nano. If that was the phone, there's be a wow factor. It's completely different to everything else."

Gartner research vice president Carolina Milanesi however said it was more likely that users in future would migrate from Android to Apple in future rather than the other way around.

"A lot of users buy Android but they haven't quite bought into the ecosystem yet," she said.

"It is a solid upgrade. A lot of the things that were rumoured were actually delivered."