Apple's iPhone 5: Winners and losers

Apple's iPhone 5: Winners and losers

Summary: Apple announced this week the long-awaited iPhone 5. Boasting a wealth of new features and technologies, today isn't just about Apple. Who will gain and lose out from Wednesday's event?

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TOPICS: Apple, 4G, iOS, iPhone, Smartphones
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The iPhone 5 made its full, first public appearance yesterday, despite the array of leaks in the months running up to Wednesday's media event.

The new smartphone has boosted the confidence of some consumers that Apple 'still has it,' while Apple's share price didn't exactly act too favorably during and after the event as it remained vastly flat -- bar a mid-event plunge when the Foo Fighters came on stage. That said, the incremental internal hardware updates were overshadowed by the new design, which even then didn't come as much of a surprise for many.

It's the first time Apple has, since the original smartphone launched, had to 'catch up' to where everyone else was. 4G LTE connectivity and the 4-inch screen: Apple passed on these a year ago and failed to set a trend. 

More iPhone 5: All ZDNet iPhone coverage | All CNET iPhone coverage | Techmeme | Apple statement

Apple's ripple effect will reap rewards for the company on the long-term, but the knock-on effects of the new technologies will hit rivals, competitors and ordinary folk likewise. (And before you shout at me, yes there are more losers than winners.)

Winners

Apple: There's no doubt Apple scored a massive win in the market, but did it win the hearts and minds of consumers? "Completely amazing and utterly boring," writes Wired's Mat Honan, which probably sums up most people's sentiments. Apple will have to wait and pray the weekend sales yield strong results. Like with any new iDevice it will likely soar off the sales charts and once again mark a record-breaking launch on previous releases.  

4G carriers: Finally. Apple took a shot with 4G LTE with the iPad 3 but failed to wow the masses, partly due to the incompatibility of the device on all networks outside of the 'test-case' North America. A few legal wranglings later and "4G" was dropped from the product's name.

Now the iPhone 5 has support on most global LTE networks, it sends a signal that 4G LTE is ready on an industry level in Apple's view -- seen an industry benchmark -- and Apple should avoid much of the hassle it faced with the iPad 3 by actively working with LTE networks in the first place.

But to catch up with the 4G trend, Apple was forced to build three separate iPhones in order to cater for the world's audience, adding further expense to Apple's manufacturing costs. On the plus side, it's better to get it right later in the game than stuff up the first time say with the iPad 3. Apple has redeemed itself.

Component makers: Samsung remains a key link in Apple's supply chain and will stand to benefit from its arch rival in the smartphone space from selling as many phones as possible. It's estimated that around a quarter of all Apple's innards are Samsung supplied components. Even if Samsung loses out to the iPhone in market share rankings, it still reaps a vast reward in selling chips and memory to Apple and other phone makers.

Other component suppliers such as Ericsson, the world's largest telecoms equipment maker, could see a massive boost from LTE chips if the iPhone 5 spurs on the 4G LTE evolution, and Qualcomm will profit immensely from its chips featuring in the iPhone 5. Apple's supply chain remains healthy, even if its manufacturing process is far from.

Despite its second-place in the top smartphone makers' table, Apple may sell as many as 27 million iPhones during the September quarter, according to Piper Jaffray analyst Gene Munster.

Losers

Apple: Possibly the leakiest company in California, Apple failed to keep the lid on its most anticipated product of the decade to date. The leaks that sprung out of Apple's Asia supply chain shows just how important the company is to the general public, but yesterday's launch went ahead without a pop or a bang, or even a meager fizz.

Despite Apple CEO Tim Cook's pledge to "double down on secrecy," the iPhone 5 was the most leaked product out of the company to date. That "double down" strategy failed miserably. The stock market reacted with a lukewarm response, but had Apple been able to handle its scandal it could have seen its share price rocket to a not-so-far-off record high. Instead, the firm was plunged into the red by Dave Grohl's band of merry men.

Even friendly critics were quick to jump on the announcement. ZDNet editor-in-chief Larry Dignan clearly yearns for Steve Jobs' stage presence, and ZDNet editor Andrew Nusca warned that Apple's secrecy days are "over"

Google: The search giant just lost a whole chunk of business when Apple ditched Maps in favor of its own in-house mapping service, and by dropping YouTube altogether. The only element of Google in the iPhone 5 is its search engine and email support. 

And then Android, which Google owns, makes and ships out. 4G LTE is likely going to have a knock-on effect to the Android market as the only section of the smartphone sector that supported LTE up until Apple's event on Wednesday. It's a testament to Android that so many people use the operating system, thanks to the diversity of Android-supported devices on the market, but the iPhone has finally caught up and could ruffle Google's feathers in the process.

Mobile payment firms: Even a lack of NFC hit Google and other mobile payment makers, despite only a handful of people actually using Google Wallet and other wireless payment services. For those of you, like me, with an NFC-enabled credit or debit card, that works just fine. It's no more effort in pulling out your wallet and tapping your card on a card reader than using your phone.

Apple's decision to leave out NFC means the wireless payment and tagging technology has yet to stand the test of time. Apple doesn't include technologies that aren't ready yet. As Apple senior vice president Phil Schiller told AllThingsD, "Passbook does the kinds of things customers need today." NFC isn't yet the solution to any existing problem. 

Application makers, developers: The 4-inch screen has be widely welcomed by Apple and Android fans alike. The technology giant had to build a 4-inch screen to compete with its main rival. But that leaves developers out in the cold for weeks, just as it did with the Retina display debacle. Apps took weeks to rejig and rework to accommodate the extra pixels and many missed the iPhone 4 launch date. It meant many new iPhone customers were left with apps that looking plain fuzzy. 

One developer wrote on his blog: "They should have notified us about the screen size, at least a year back. After all we pay them $99 a year [for the developer subscription] and 30% on each app sale. I'm sure we deserve this information."

"They had a choice -- hurt developer’s pocket or to hurt their sales. They have clearly chosen the first one."

The 4-inch screen will likely stay with Apple for many years, just as the Lightning dock connector will. But its left developers in the lurch after they found out not at WWDC 2012, their developer conference, that their apps would need to change to accommodate the larger screen, but at the unveiling of the iPhone 5 only days before its public release.

Europe: Despite an EU ruling in 2009 that meant phone makers would abide by the 'one-size-fits-all' micro-USB charging port rule, Apple remains the elephant in the room. To appease EU regulators, it brought out an accessory to convert the old-style dock connector to the micro-USB standard. This time around, it's the same thing but a different iPhone.

£15.00 (€19.00) for a converter plug, just to appease the EU? It's crazy. Consumers have to churn out even more for the privilege of an accessory that should be by standard come with the iPhone in the box.

And on the subject of the EU -- don't dismiss it as "just Europe," it has a far greater market than the U.S. does -- the European carriers are set to go to war on the iPhone 5 pricing. It boils down to subsidies, as the major operators fire price cannons at each other to woo the greater number of customers.

Image credit: James Martin/CNET.

Topics: Apple, 4G, iOS, iPhone, Smartphones

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  • Winners

    I'd add Microsoft and RIM to the list. Apple didn't push the bar enough to attract those not already on iPhone. Basically the iPhone 5 is table stacks. It features nothing other devices don't have. Apple went for table stakes.

    It's a nice device but the bulk of sales are going to those clutching 3GS and 4 models who waited for a better upgrade (which this is). Those with a 4S - not so much. Unless you really want LTE and a slightly larger screen it's not worth it IMO.

    I'm really interested to see how the "letter boxing" of Apps works out .. thats going to be ugly. Way to throw your developers under the bus Apple. I mean you couldn't mention this at WWDC?

    Losers - consumers

    The adapter cost is criminal, I was thinking $5-10 considering the amount some people might need. The Apple Tax continues. This is why everyone else uses MicroUSB.

    Winners - consumers

    Seems you can stay on your unlimited data plan with the new model, I was betting the carriers would force a new plan so this is welcome news.
    MobileAdmin
    • Microsoft, is on the "Losers" list

      Because everyone will want the iPhone, and given Nokia's unstable condition, they might no be around this time next year. I would not buy a product from a company that's been losing billions every quarter.
      Troll Hunter J
      • You are wrong . . . again

        Nokia will not fail and the new Lumia phones have better hardware in every way except the number of cores (2 vs 4). However WP8 doesn't need as many cores are iOS 5/6 does to operate as well or better. So, this is a big fail for Apple, not Nokia.
        rmark2
        • Yes he is wrong!

          Nokia will not fail! They have a lot of IP and great map technology that will make them money for years to come. Even if they failed the Lumia line is still as gorgeous as ever and it will still work on your carriers network. There won't be a day where OMG Nokia tanked and your phone self destructs!
          Rob.sharp
        • Ahem....

          You're replying to someone named "Troll Hunter"... Just saying.
          The one and only, Cylon Centurion
        • Do you know the difference with ARM processors?

          It not just the number of cores. It's WHICH generation of ARM. A9 processors are not very good with comparison to A15 generation. Apple A6 is based on A15. Lower power, faster processing, less heat, really good graphics rendering. I don't know if any of the current modes announced will be able to do the rendering of the game that EA did with that racing program. They pushed the envelope with smartphone technology. REALLY SICK DETAIL. I don't know if the Lumia, Samsung, etc. can do that level of rendering until they crank out a newer generation processors.

          The problem is that the average Joe Blow doesn't know much about the differences in ARM chips because it is TOTALLY different chip architecture and most people are a little more brainwashed with Intel X86 processors.

          A6 chip is a great chip. And after it ships then we'll find out more about how well it performs. I don't think it's going to run very hot as compared to the chips others use, but kick out the performance.
          RichDavis1
          • A6 is a great chip

            How do you know its a great chip since it hasn't even shipped yet?
            chethammer
        • FYI

          I think Apple is the first Cortex A15 based CPU, which with the 4 core GPU blows away everything else. Apple has much more momentum with app development and I think that is Windows 8's downfall. The market just isn't going with Windows. I like certain aspects of the Lumia 920, but not enough for me to buy one over the iPhone 5.
          RichDavis1
          • The next iPad

            The next iPad might come with the A6 CPU and have 20 hours of battery life with the current battery, or Apple makes it ever thinner...
            danbi
      • iPhone is the camry of the mobile world

        Look at rimm kept the same look. Dependable, reliable, everyone else has one so me too.

        These are the comments of iPhone and you have to agree that it's true. Missing is fast,sexy,exciting

        That is what you get from mac owners. I have to say nokias line is bold and sexy. Jury is out on fast as wp8 not out yet.

        But there can be quick death in keeping the same look too long.
        DeathDealer35
        • Even the Camry gets a all new design every few years

          The Iphone has gotten stale. I'm not going to shell out more money for the same looking device. The sad fact of the matter is that we will probably see this "new " design for another years after this at least (probably a Iphone 5 S).

          Apple hasn't added anything new to this phone other than make it slimmer and the ability to use one thumb, which if they bothers to ask anyone that uses their phones daily isn't your main concern.

          As for me I plan on playing a bit with a buddies Samsung g3 and see if I like it, I know I certainly like it's larger screen size and it's many other features
          JamesB12
          • What "many other features"?

            I'm curious, what "many other features" are you interested in on the S3?
            JScottA44
          • Exactly

            "Boasting a wealth of new features and technologies..." that were not found on the previous version of the iPhone.

            The writer should have made that more clear because nothing that Apple demoed was new in the world of mobile computing, nothing!
            laequis
          • Um, yes there was....

            Whatever. it's certainly not a kludge product. The features are well integrated. I don't think the game they showed could be done with that level of detailed graphics rendering could be done on any other phone.

            Also, all of the other phones on the market are using older Cortex A9 ARM chips rather than Cortex A15. But then again, that's probably WAY over your head.

            The proof is using it.

            I'd be willing to bet that it will hold it's own and be a much better product than the Samsuck Galaxy S III, which is pushing Micro SD memory, which is the BIGGEST joke I've seen. That's like telling customers to add a floppy drive to their computer to add additional storage. SD memory is SLOW, cheap and no one is using it. Samsung probably has a warehouse filled with SD memory cards no one wants, so putting in the S III is a way to sell them and make money from what would normally get tossed in the surplus market. Samsung has battery drainage problems.
            RichDavis1
          • Faulty!

            The problem with your analogy is that unlike the IPhone which is slow to adapt, Samsung and HTC will not only have the new chip, but will then leaffrog with the latest technology before the Iphone has the ability to catch up. Just look at it's latest release, the chipset was the only tech that is ahead of the rest, everything else was just playing catch up!
            SmokinBiz
          • Faulty Logic

            The A6 being an A15 is unconfirmed and unlikely. iPhones would not need that much power because they can not multi-task (the multi-tasking on IOS 5 was more like a quick launch bar). Chances are, it is a 32 nm modified Exynos 4212 with a PowerVR SGX543MP2 graphics processor. That would make it twice as powerful. Micro SD cards are an awesome thing to have in a phone. I have 3 for my phone. In total, I have 128 GB of removable storage which means I can have twice as many movies, music, and pictures than an iPhone user while paying less for it than a 16 GB iPhone.
            dmckay12
          • You obviously

            didn't look INSIDE what's going on. That thing is going to smoke the competition with processing power.

            obviously looking on the outside from photos is different than seeing and using one in person.

            The crap that Samsung is putting out is old generation chip sets. I guess they need a dumping ground for surplus parts no one really wants so they wrap it up in a big screen to impress people. Trust me. A15 based chips is where it's at. That's next gen processors.
            RichDavis1
          • So basically

            Apple is charging you for 2 cores that you don't really need as iphones cannot multitask.
            Yax_to_the_Max
        • This isn't the hippie years between '55 and '75.

          Unlike those years where automotive body styles changed every single year, they now operate similarly to the rest of the world, where a basic body style will remain unchanged for 5 years or more. If you haven't noticed, technology has adopted the same concept simply because it's cheaper to modify the internals than the externals.

          However, the iPhone has modified those externals by offering a thinner, lighter body with a bit more height to accommodate a larger screen and a larger battery; the battery helping to extend the working life of the charge by more than 10% to again the longest working charge on a smart phone to date. Other changes have been made, too, which for some may seem like nothing but to others are quite significant. A more accurate, easier to read mapping app is more important than an almost unusable SD card slot. (The Galaxy SIII does not treat the SD card as internal memory, which really kills its usefulness as "expanded memory.")

          The iPhone, so far, changes its appearance every 2 years and the iPhone 5 is quite visibly different than its predecessors while still offering almost edge-to-edge display. But to me, what's inside -- both software and hardware -- and Apple ecosystem -- is far more important.
          DWFields
          • Flaw in the logic

            The Motorola Razr Maxx has the longest working charge of a current smartphone to date. SD cards are supposed to be treated as removable storage because they can be removed. If they are treated as the primary internal storage, then the phone will have problems when it is removed (which is the point). .5-.75" bezel above and below means that it does not have anything close to an edge to edge display. The map application had fewer features than that of an android phone's because Apple did not allow it to be updated. Google is releasing a maps app on the appstore that will be much better than the apple maps.
            dmckay12