Reactions to Apple’s [AAPL] iPhone 5 launch are pouring in, and while some critics dismiss the device for all manner of reasons, analysts and consumers seem to think it’s insanely great, though all is not good in the state of accessory developers.
[ABOVE: Apple’s iPhone 5 keynote video in full. Also available here and for download via iTunes.]
First there’s been some revelations regarding Apple’s A6 processor. This has been billed as being twice as fast as the A5 shoved inside the iPhone 4S. Anandtech’s Anand LaShimpi claims the A6 is based on ARM’s dual-core Cortex-A15 chip. He claims these are being manufactured by Samsung in Austin, Texas, and that it used the same basic processor as that used inside the Galaxy S111, albeit custom-tweaked for Apple’s device and iOS.
LaShimpi’s claims have been “confirmed” by an analyst from Nomura Securities who also claims the A6 to be a dual-core Cortex-A15 chip manufactured using Samsung’s 32nm process. We’ll learn more on this later when iFixIt and the others do their regular tear-down of the product once it ships.
Apple’s claims for the processor are modest: twice as fast, with graphics up to twice as fast and much faster app start-up and activity time.
The company’s processor advantage here may be slight: more smartphones equipped with ARM’s basic Cortex-A15 reference design processors are expected to appear before the end of the year.
This reflects Apple’s continued problem in attempting to replace Samsung across its product supply chain. The company has been thought to be working with alternate foundry, TSMC, to deliver chips, but this hasn’t yet yielded any result. This changes in the latter half of 2013 when TSMC will begin supplying processors manufactured using its 20-nm process, according to Nomura.
That will be an interesting moment as this is when Apple will be able to truly follow its own path in processor development. The hope is that it doesn’t end up hobbled by that decision, as it was during its years in the PowerPC processor wilderness.
There’s a few advantages to working at CNN/Fortune, one being the ready availability of comment from the analyst community. What follows are a few highlights from an extensive list of analyst reaction statements curated by the Apple 2.0 blog:
Needham’s Charlie Wolf has been staunchly behind Apple for years. He was the first analyst to explain to me the impact of iPod sales on the Mac platform. He predicted -- correctly and well in advance of anyone else -- the emergence of the so-called ‘iPod halo’ which would drive Apple’s future success. He calls the iPhone 5 a “tour-de-force”, noting the company had upgraded almost every part of the device’s hardware, software and ecosystem. “In doing so, in our opinion the iPhone has enhanced its already elevated stature as the gold standard of the smartphone industry,” he said, though he continues to be concerned the company may miss the disruptive spirit of invention which characterized the leaderhship of Steve Jobs.
Then a trio of positive statements:
“We believe the iPhone 5 could be the biggest upgrade in the company’s history.” RBC, Amit Daryanani.
"iPhone 5 highlights Apple's unique ability to deliver innovative products leveraging its software and hardware expertise, and app and media ecosystem.” Morgan Stanley, Katy Huberty.
"We believe these changes will drive the biggest upgrade in consumer electronics history.” Topeka Research, Brian White.
And a critical note:
"While we were impressed with the product improvements and the aggressive rollout schedule, the announcement did lack the "wow factor" we have seen in some of Apple's new product announcements.” William Blair's Anil Doradla.
Overall, response from the analyst community has been in the positive. They note that Apple has delivered on nearly all the expectations for its device, and that it is preparing to execute a global roll out at a rapid clip. They also note that while many of the improvements are incremental, the overall impact is to deliver a device which maintains its position within the fast-paced, deeply competitive industry.
That NFC thing
The NFC industry had hoped Apple would give it a shot in the arm on the release of last year’s iPhone 4S. Those hopes came to nothing, now they’ve once again been dashed by the non-appearance of such support within iPhone 5.
Speaking to All Things Digital, the company’s trim marketing chief, Phil Schiller, pointed to Apple’s Passbook system, saying, “Passbook does the kinds of things customers need today.”
In other words, Apple’s saying nothing at all on this, so here’s a few guesses to justify the non-appearance of support for the tech in iPhone 5:
- Adding an NFC radio would demand more battery power.
- NFC remains a fragmented standard with different implementations in different countries and from varied operators.
- Google’s investment in NFC hasn’t really paid off as yet -- why follow?
- Merchants aren’t really geared up for the tech.
- Consumer surveys show there’s some way to go before NFC becomes a must-have feature.
- Many customers would probably resent passing across a percentage of every transaction to the NFC service/payments provider, in this case, Apple.
- Security challenges remain for safe use of the tech in payment systems.
The truth is Apple has options beyond NFC. Support for Bluetooth 4.0 opens doors to payment systems based on that technology. Apple could in future (iOS 7?) implement support for either system, but it’s important to note the iPhone already carries a Bluetooth radio, while an NFC chip would impose a power drain. Power could be the challenge which kills this side of the industry.
[ABOVE: Because what use is multimedia if you can't put Queen's 'Bohemian Rhapsody' into this Apple story?]
Like a bolt of Lightning
Very, very frightening? While Apple’s chosen name for its new interconnect may have generated a crush of Queen-related jokes on Twitter on its announcement, many (including myself) feel that Apple’s charging too much for the converters.
There’s good reasons behind the move. Apple’s Phil Schiller said the company had to make in order to develop new breeds of thin device and said the company was/is committed to support for years. “This is the new connector for many years to come,” he said.
What of the accessory developers? I’m continuing to chat with these, but one told me (somewhat resentfully) that while they’d based their initial designs on rumor and speculation, they did feel that some of the bigger players were given advanced insight into Apple’s plans.
One source named Bose, JBL and B&W as some of the big players who may have received such a glimpse. “It’s a shame about the connector for the rest of the industry,” they muttered, adding, “though Apple has once again raised the bar.”
Despite this unequal playing field, Breffo’s Dan Ashman prefers to focus on the positive, seeing the new interconnect as a potential boost to future product sales. In a press release he said: "The new iPhone 5 presents a huge opportunity for the accessory industry especially with the new 80 per cent smaller adapter.”
While it’s certainly a good thing Apple’s moved to bring the iPhone 5 to an international clutch of carriers its decision to support the 1,800Mhz frequency means many millions of potential smartphone purchasers will be disappointed. This may not upset many US readers, but in the rest of the world outside your continent, that’s going to be a bit of a problem, particularly in the UK.
Orange/T-Mobile brand, Everything Everywhere will be offering iPhone 5 on its LTE/4G network, but its rivals (Vodafone and O2) won’t be able to do so even if they want to. Meanwhile Everything Everywhere will only support the standard in 16 cities by the end of the year.
The problem sits with UK telecommunications regulator, Ofcom -- and it’s a bit problem. You see, Ofcom won’t be auctioning off the frequencies Apple supports. It will offer the 800MHz and 2.6GHz bands, neither of which are supported by iPhone 5. Three will be able to offer the iPhone on its 1,800Mhz network, but this won’t open until next year.
This is a particular problem in the UK, but, just like NFC, the 4G/LTE standard continues to be confounded by local differences in implementation, meaning most consumers will have to check the small print before they sign-up for the device.
That’s a particular shame as it won’t be long until carriers migrate voice calls to broadband data connections. As Apple graphic tech supplier, Imagination Technologies notes this morning:
“The adoption of LTE is poised to fundamentally change the structure of voice networks, the development of VoLTE has become a popular topic associated with the debate. This approach to re-engineering voice calls refers to an IP Multimedia Subsystem (IMS)-based technology that is designed to deliver voice packets over all-IP LTE networks.”
Which means voice over data connections in future. Assuming carriers can deploy the hybrid Macro Cell, Metro Cell, Femtocell, Wi-Fi, copper broadband hetergenous networks they need to put in place if they want to avoid degradation in quality of service as the number of users within any cellular area exceeds the supported quantity of local cellular masts.
The evolution of smartphones is going to drive data demand continuously higher and operators face huge pressure to deploy systems to meet the need, but face technological and regulatory challenges in order to do so. Data traffic demand’s expected to grow 18x between 2011-2016.
[ABOVE: A UK consumer survey conducted immediately following the iPhone 5 announcement confirms huge interest in the device among consumers.]
Gartner analyst Michael Gartenberg notes a whole heap of promise in the iPhone 5. First he is castigating critics who are foolishly comparing the device to systems from other manufacturers which haven’t actually shipped yet.
“It’s all about the whole experience and the ecosystem,” he Tweeted. “This is the part competitors keep missing over and over.” He also noted: “It’s not important if journalists of analysts ‘get’ what Apple is doing, as long as consumers do...and they will when they see [an iPhone 5].”
Analyst Carolina Milanesi also notes that Apple “remains the only vendor that through incremental improvements delivers a considerably richer experience.”
So -- do consumers get it? The sheer volume of Web traffic we’ve all been seeing in recent weeks certainly implies huge interest in the device, but as we wait for the inevitable queues to form and the ‘now you see it now you don’t’ pre-order system on the Apple online stores to crash and burn, all we have to go on is the latest surveys... and fortunately we got one of those right here:
As reported by TechCrunch, a Usurve survey of 1,000 adults found that 44 percent of current UK iPhone owners plan to upgrade. Not only this, but 18 percent of HTC users plan on dumping those handsets in favor of the device, while 20 percent of Nokia owners had the same plan. The survey shows 20 percent of all smartphone owners wanted to upgrade to the device.
Guy Potter, director and market researcher at Usurv, said in a press release: “We ran an immediate poll to gauge people’s instant reactions to the new phone and as with most Apple launches there seems to be a fair bit of positive excitement. The fact that 44 per cent of existing iPhone users already want to upgrade -- without needing to think about it -- shows the loyalty to the brand. However, none of the new features seemed to instantly grab people -- with 39 per cent saying none of them really appealed.”
Clearly then the consumers get it, and are going to get the iPhone as soon as it launches.
Final word then to the esteemed Horace Dediu at Asymco estimates first weekend sales of six million units for iPhone 5 (I suspect they may be higher, but we will see).
“The performance of the 5 in the first weekend should be better on a volume basis simply because there are more existing customers who wish to upgrade and because there are more initial and significant launch countries,” he wrote.
I’m going to sign off on this gigantic reaction report now. I’m interested in your non-partisan personal reactions to the device.
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