After iPhone 5, it's time to find the next big thing

Thursday 13 September 2012 | 12:00 CET | Market Commentary

Apple has unveiled the iPhone 5 as expected. It's a nice piece of technology that's sure to attract attention in the coming months. But how important is this smartphone really?

The earlier launch of the iPhone 4S was followed by a few days of small disappointment. The smartphone was a typical iPhone with a few new interesting features, such as the voice commands system Siri, but Siri was about all there was, in terms of things to get excited about. Nevertheless Apple sold over 1 million of the phones in the first 24 hours. Within three days, it had sold 4 million, setting a new record.

But how special is the new sixth-generation iPhone in the big scheme of the high-technology smartphone market?

To start with, Apple is once again launching a high-end smartphone that will undoubtably find a good positioning in the market and sell well. The pricing is reasonable - USD 199 for the entry-level model and USD 399 for the top-end version - but this will probably not be a big factor. At the same time, the price of the iPhone 4S will be reduced, which should benefit total iPhone sales.

Beyond that the iPhone 5 offers little to get excited about. While some (technology) media may cover every Apple announcement as if it's the 'next big thing', in practice this is not really the case. Ok, the iPhone 5 supports LTE, it has a faster processor and a sharp camera. Apple's also refreshed the software with iOS 6, offering a few new features or improvements in the iPhone 5 functionality.

For the end-user (Apple fan or not), the iPhone 5 offers at first glance a smartphone that in terms of specifications can stand up well to other flagship devices such as the Samsung Galaxy SIII or Nokia Lumia 920. The iPhone 5 also benefits from significant carrier support, in the US at least. AT&T, Verizon Wireless and Sprint will all carry the iPhone 5.

Apple has sold over 243 million iPhones worldwide since 2007. Its App Store also offers around 700,000 apps, underlining that the iOS ecosystem is still going strong.

At the same time, the first questions are emerging over how long Apple can keep up its success story. Consumer demand may be as strong as ever, but operators are stating to making noises, calling for an alternative to Apple. The iPhone maker has required heavy subsidies for years on its phones, while the return for operators is difficult to quantify.

Despite the relatively lukewarm response, the iPhone 4S still broke sales records and strengthened Apple's position in the competitive smartphone market. The question is now whether Apple, after rewriting all the rules in the mobile market, can remain at the top of its game.

It may be time, five years after the first iPhone was launched, to no longer uncritically give Apple the de facto title of top innovator. The company's performance has been extraordinary, almost single-handedly taking the smartphone to a mass market. But now that it's got to the point of only incremental innovations, with no 'wow' factor to offer, it may be time to start looking for the next big thing.

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