iPhone 5 Preview: Everything You Need to Know
The iPhone 5 launch on Wednesday, Sept. 12 is sure to be the most important event for tech investors this year. The Motley Fool will be hosting a live chat where our top tech analysts will answer your questions and break down what the announcement means for Apple and tech investors everywhere. Be sure to swing by Fool.com at 12:45 p.m. EDT next Wednesday for all your coverage of Apple's next big announcement.
We're now less than one week away from Apple's (NAS: AAPL) iPhone 5 unveiling, which is set for next Wednesday. The whole mobile world will be anxiously watching for what Apple has up its sleeve, and investors are already banking on a device no one has ever officially publicly laid eyes on to lift the company to new heights and decimate the competition.
The apple of Apple's eye
The iPhone is easily Apple's most important product family, generating half of trailing-12-month sales. No other product even comes close, and even the core Mac business has already taken a backseat to the iPad as a revenue driver.
% of Total
|Music (iTunes)||$7.9 billion||5%|
|Software, service, and other||$3.3 billion||2%|
Source: SEC filings. TTM = trailing-12-month. Figures may not add precisely due to rounding.
The relative softness in iPhone unit sales last quarter limited Apple's overall results since it's such a major contributor to the top line. On top of that, reports estimated that Samsung's current flagship, the Google (NAS: GOOG) Android-powered Galaxy S III, dethroned the iPhone 4S in August as the top-selling smartphone at most domestic wireless carriers.
Only at AT&T (NYS: T) did the iPhone 4S lead the way, while at Verizon (NYS: VZ) it was even pushed down to No. 3 as Google's Motorola Mobility subsidiary earned a second-place finish with its RAZR Maxx. Both Nokia (NYS: NOK) and Motorola have just recently unveiled new flagship devices, the Lumia 920 and Droid RAZR HD, respectively, so the competition continues to intensify.
Apple needs this
It is imperative for Apple to release a blockbuster device if it hopes to satiate investors' appetite for growth and fend off competition among high-end smartphones, particularly from the Android camp.
The Apple rumor mill never sleeps, and constantly churns out new tidbits to drive speculation. That means that potential buyers are well aware that a new model is coming and postpone purchases accordingly, but it also means that careful watchers already have a pretty good idea of what to expect.
For the first time in the iPhone's history, Apple will be increasing the screen size from a 3.5-inch display to a 4-inch display. While Android rivals continue to offer just about every screen size imaginable, some up to nearly 5-inch displays, Apple is playing this spec conservatively. In order to slim down the device, Apple is reportedly using in-cell display technology, which integrates the touch sensors directly into the LCD and eliminates the need for a separate layer. However, if it turns out consumers really do want something bigger, the iPhone 5 may disappoint.
This will also be the first iPhone to feature 4G LTE data speeds, again a requisite to stay abreast with the Android competition. One advantage Apple may be able to wield in this department is battery life, as most LTE devices are notoriously short-lived.
The physical case is also being redesigned and follows in the unibody footsteps that Apple has taken throughout other product families. This will yield benefits such as a sturdier casing and physical space efficiencies. Supply chain leaks show a two-toned design with what appears to be glass windows at the top and bottom to allow radio signals to pass through, since metal obstructs these transmissions.
After nine years, Apple will also move to a smaller proprietary dock connector, shaking up the third-party accessory market in the process.
When can I get my hands on it?
The launch date is rumored to be Sept. 21, nine days after the unveiling. The launch happens to be when carriers have scheduled vacation blackouts for employees, as they'll need all the able bodies they can get to handle the onslaught of rabid iPhone buyers.
Apple is always quick to launch devices very shortly after introduction, an attempt to minimize the Osborne effect of consumers delaying purchases waiting for the new models, although there's little it can do about the rumor mill we all know (and love) at this point.
There's a lot more where that came from
The iPhone 4S was the fastest iPhone rollout so far, thanks to Tim Cook's operational prowess. The company continues to tap into additional market opportunities, recently getting into the domestic prepaid segment with Leap Wireless' Cricket and Sprint Nextel's Virgin Mobile. The iPhone 5 is also expected to bring technical compatibility with China Mobile's unique network standards, giving Apple access to the largest carrier in the world, with 688 million mobile subscribers, only 10% of which use 3G.
As with previous years, the new iPhone will bump down previous models a price point, which means that the overall lineup will also strengthen. Here's how the entry-level on-contract pricing should change.
Entry Price Point With Contract
|$0||iPhone 3GS||iPhone 4*|
|$99||iPhone 4||iPhone 4S*|
|$199||iPhone 4S||iPhone 5*|
Source: Apple. *Estimated.
The iPhone 4 is still a respectable device, especially for targeting lower-end and emerging markets. I'm expecting the iPhone 3GS, originally released ages ago in 2009, to be discontinued.
How to play the iPhone 5
Make no mistake: this product launch is Apple's most important for the entire year, since so much rides on the iPhone's success. Fortunately, there are numerous ways to profit on the iPhone 5 beyond Apple itself. I've detailed the most promising component suppliers that are expected in the iPhone 5 that investors can capitalize on, and it's included as a free bonus to subscribers of our new Apple research report. Sign up today and get a detailed comprehensive write-up, an iPhone 5 special report, as well as regular future updates for no additional cost! Just click here to get started.
The article iPhone 5 Preview: Everything You Need to Know originally appeared on Fool.com.Fool contributor Evan Niu owns shares of Apple, Verizon Communications, and AT&T, but he holds no other position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of China Mobile and Apple. Motley Fool newsletter services have recommended buying shares of Apple and Google. Motley Fool newsletter services have also recommended creating a bull call spread position in Apple. The Motley Fool has a disclosure policy.
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