iPhone 5: the IT industry responds

Apple's new smartphone provokes mixed reaction in the technology world, with some disappointed at the lack of NFC capability

Yesterday's launch of Apple's iPhone 5 has drawn the usual line in the sand among industry commentators.

Between those who champion the smartphone's offering of enough innovation to maintain the brand's popularity, and those who feel the phone offers nothing to stem the growing trend of consumers opting for Android, everybody is predicting a different future for the iPhone 5's market presence.

"Apple is such a major part of the value of the US (even world) exchanges, that they only had to stumble with the iPhone 5 launch and the world stock markets could crumble," said Techmarketview analyst Richard Holway.

"As it turned out," Holway continued, "Apple did more than enough to save the markets from meltdown. Apple shares closed up 1.4 per cent at $670 – close to their all-time high.

"The iPhone 5 looks gorgeous. Thinner, lighter, faster, has longer battery life and a better camera, new maps and navigation, LTE/4G for faster access, better mics and sound, and it costs the same as the old model. Short of a cure for all known diseases and the second coming, it is difficult to know what more they could have done."

With market intelligence firm IDC already predicting a total of 51m iPhones will be sold this year – compared with 37m last year – Holway declares the "iPhone cash-cow... safe for now".

However, Ovum chief telecoms analyst Jan Dawson wasn't as convinced.

"The device highlights the inherent risks involved in Apple's strategy of only releasing one device at a time," said Dawson, "in that it always has to strike a compromise that is most likely to appeal to a wide base of users."

Dawson explained how the iPhone 5 makes this compromise "most dramatically in the increased vertical height" of the phone.

"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," explained Dawson.

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iPhone 5: the IT industry responds

Apple's new smartphone provokes mixed reaction in the technology world, with some disappointed at the lack of NFC capability

But though Apple's taller, thinner device will "stand out", Dawson argued Apple may find its product doesn't hold full appeal to users who expected the firm to take the plunge into creating a truly larger device.

However, she still predicted that the iPhone 5 will shift more than 100 milion units over the next year.

"iPhone users who are currently using an iPhone 4 and have the opportunity to upgrade will no doubt do so in large numbers," she explained, "and the more fanatical iPhone 4S users will do the same. It will also sell lots of the previous two generations of devices as those go on sale at a lower price.

Ultimately, however, Dawson said she expects the iPhone 5's total shipments and, therefore, install base will continue to grow, as "Apple's devices continue to target just a subset of the addressable market and Android devices meet a much wider range of customer preferences and price points."

Tudor Aw, audit, tax and advisory firm KPMG's European head of technology, meanwhile, said Apple had missed a trick by not including the much-rumoured NFC chip in the hardware design, describing its absence as "the biggest surprise and disappointment" of the iPhone 5 launch.

"Mobile payments have long been touted as the 'next big thing', but to date this has simply not happened in any significant way," said Aw.

"It had been hoped Apple would turn its famous ability to deliver new technology through great user experience to kick-start the widespread adoption of mobile payments by consumers.

"The interesting question is whether this omission will mean further delay in mobile payments taking off, or if it presents an opportunity for its competitors to take a lead in this field."