It’s quite a performance. And yesterday’s introduction of the new iPhone 5 has many analysts saying that the company will sell millions of the phones by the end of the month, boosting revenues even higher for the quarter. Well, maybe.
At its announcement, Apple made couple of offers that may be too good to refuse. A consumer can get an iPhone 4 free with a new contract and a 16-Gbyte iPhone 4S for just $99. Is the the iPhone 5 worth the extra $100? Sure, it’s got a 4-inch display and 4G LTE wireless connectivity and a few other new features. But those bigger image files are very large and 4G can really send lots of them down the metered pipe to the iPhone. How many consumers really need — or want to pay for — all that resolution and speed? Especially if they already own iPads with big, high-def displays and 4G connectivity, which have already boosted prices.
The Apple fanboys will be lined up and that’s what Apple is counting on — buyers who can’t live without the latest and greatest. At one time Apple had a very high percentage of return buyers compared with other vendors, but because smartphones have now almost completely saturated the U.S. market, virtually all purchases are replacement purchases. Will the iPhone 5 attract Samsung or HTC smartphone users to dump their phones and switch? Doubtful, especially if the user already has a 4G-compatible phone.
Smartphones, including the iPhone, may be entering a development stage often called “feature creep,” where incremental changes are made to sound as though a new planet has been discovered.
Still, there’s no denying Apple’s success or investors’ love affair with the company. Shares closed at $682.92 today, a new closing high to go with the new intra-day high. Ho-hum.
Paul Ausick
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