Yesterday Techcrunch added more fuel to the reports that the iPhone 5 will indeed be a dual CDMA / GSM world phone.
Making one single device that runs on all the worlds networks makes a great deal of sense. Not only does it streamline Apple’s manufacturing process allowing all their resources to go into building one device, but it also sets them up for what could be their biggest launch yet.
It would be a huge deal to launch the iPhone 5 simultaneously world wide on every major carrier. The strategy itself is simple. Make it possible for every person on the planet to buy an iPhone 5 on the carrier of their choice.
One could make a strong argument, and many have, that the reason other platforms like Android have been gaining is because the iPhone isn’t avaialable on every carrier. This could all change very soon.
And there are two markets of significant interest in this scenario- the US and China.
In the US, if the iPhone is available on all our major carriers, that would mean it would also come to Sprint. If this happens it could have a lot of impact. Sprint sells a lot of Android phones. They also have one of the more aggressive pricing plans for data, voice, text and web. If the iPhone 5 launched on Sprint and it included their aggressive price plan, it would make a very competitive offering.
The timing of this launch is key also. For roughly the last three years the holiday season has been the time of year many people get new cell phones. This is because, for the last few years, new cell phones have made for timely Christmas presents. This means that many consumers are eligible for new phones as a part of their carriers upgrade plan around the fall timeframe. Make it possible for every person on the planet to buy an iPhone 5 on the carrier of their choice.
By launching the iPhone 5 on Sprint, Verizon and AT&T right before or during the holiday shopping season it would probably insure that they could sell more than 80 million iPhone’s this year.
Last year I read an interesting article by Shaun Rein who contributes to Forbes but is the Managing Director of the China Market Research Group. He brings a great deal of insight to the China market and in his article last year on “Why the iPad May Succed in China, where the iPhone hasn’t” he makes an interesting point.
“.. why the iPad is likely to succeed where the iPhone didn’t is that Apple didn’t wait as long to launch it. The iPhone debuted in China more than two years after it hit the U.S. market. This time Apple waited only a few months, long enough for early adopters to travel to the U.S. and Hong Kong to buy an iPad and build buzz but not enough for massive numbers of people to have done so. By the time the iPhone officially launched in China, nearly everyone who wanted one already had one. What sane company would delay selling a key product to the world’s second-largest consumer market, where retail sales continue to grow at 16% to 18% a year?”
When a company delays a product in a certain country, no matter what the reason, it sends the message to that region that you are not the companies highest priority. His point was that by not delaying the iPad launch it helped create even more demand in that country.
By making the iPhone 5 avaible on all carriers world wide at the same time, every market has an opportunity to create their own regional buzz and not be left wanting. What’s more, if in every market the iPhone 5 is available on every carrier then consumers will win because they truly have choice to switch or not to switch carriers to get the iPhone 5. This in turn will force the carriers to provide better services and better prices in order to compete.
I would love to see Apple does this when they launch the iPhone 5. It would send a powerful statement to the technology industry as well as to tall the markets they sell and want to sell products in. This would also level the playing field where in every location on any carrier where you can buy an Android, BlackBerry, and Windows phone you can also buy an iPhone. Let’s give consumers the choice and let’s see what happens.
The bottom line is if Apple launches the iPhone 5 on every major network at the same time it would almost certainly dominate every major market.
13 thoughts on “Why the iPhone 5 Could be Apple’s Biggest Launch Yet”
I agree, Android simply capitalized on the iPhone being restricted to AT&T and the fact that what people really wanted, but couldn’t get because it was limited to AT&T.
I don’t really remember which, but wasn’t Sprint bought up by AT&T? I mean, what’s the point of expecting sprint iphone, if AT&T did M&A the sprint? But again, I’m honestly not sure how did it end.
Its T-Mobile that is being bought by AT&T, not Sprint. Sprint is still fighting on their own, trying to stay alive. If they do in fact get the iPhone 5 on launch, it will help them dramatically.
Lol it’s T-Mobile not Sprint. Sprint is the one fighting to stop AT&T from buying.
Oups sorry for my misconception.
Very little research went into this post. Apple has 228 carrier partners worldwide and in that respect is roughly on equal footing with Android. In fact, the US, China and Japan are the only 3 markets where the iPhone is not yet available on every carrier. Major markets, certainly, but we’re talking about incremental improvements here, not gamechangers. Sprint might add 5% to worldwide sales, the missing 2 Chinese carriers up to 25%, the 2 big Japanese carriers will likely not join. Apple’s next frontier is a lower price, not more carriers.
So perhaps you missed my point. I was saying a simultaneous launch on all major carriers in all countries at the same time. Not a phased approach. This will change things as consumers will have equal choice of the carrier of their choosing with arguably the best designed handset on the market.
I also respectfully disagree that Apple ever intends to compete on price. They simply don’t operate that way and they have no reason to. Read my article on why Apple doesn’t want to sell Corollas. http://techpinions.com/apple-doesnt-want-to-sell-corollas/1179
And Steve Wildstrom’s on why they don’t need to chase the low end. http://techpinions.com/why-apple-cant-chase-the-low-end/1195
So what did we get?
A massive €150 (or equivalent) price drop for the prepaid iPhone 3GS (in many markets around the world, though not the US yet) and a new high-end option for the iPhone 4 that costs $100/€100.
Apple’s ASP will probably not drop by much, but this is clearly a move into lower price points, as I had suggested. Just to clarify: This is not “compete on price”, this is “offer a superior product at every price point”. Big difference because it’s still about quality. At now around € 349-399 etc. the iPhone 3GS is the first iPhone available for less than € 499 without contract ever and thus the first mid-market iPhone.
The iPhone 3GS will trample all over the (former) sweet spot of the prepaid Android market internationally (the $300 to $500 range), and postpaid customers will also note a big price drop, though not in the US, where carriers obviously can’t go lower than $0, so it’s only a $50 drop there. Bad news for Samsung and HTC. Their ASPs will suffer from this.
Also: Staggered launch again with only 7 countries on launch day and only 70 (out of 200) in the first 3 months. It just makes more sense for the production and distribution lines.
Biggest surprise: The launch on KDDI in Japan. Japan is always very conservative with foreign products, but now Apple has the #3 and the #2 carrier. KDDI will probably sell almost as much as Sprint, and they will put pressure on Japan’s #1, NTT DoCoMo, to give in to Apple demands and launch the iPhone as well.
I haven’t seen any news on China’s big holdouts, China Telecom and China Mobile.
Taken all together (price drop on iPhone 3GS, Sprint, KDDI, plus an overall better product through iOS and iCloud) another year of 100 % growth is secured.
The other selling point is that a computer won’t be “required” to use iPhone 5. Massive numbers in 4Q. The other mobile manufactures should just sit the quarter out
I tend to agree that there will be a major shift from users Android smartphones to the iPhone. The iPhone should grab 10% more market share in a matter of months in the U.S. mostly from Android smartphones. I’m absolutely certain that if the iPhone becomes available to consumers on all major U.S. carriers, they’ll definitely choose the iPhone. Apple’s ecosystem and customer service will win out over a lower price of an Android smartphone.
The Android vendors cannot afford for Apple to get any higher market share because it will put far too much pressure on their sales margins (think HP and Wintel ultrabook vendors). They’ll have to try to reduce prices even further to gain sales while Apple won’t even be breaking a sweat. The seemingly smart analysts are going to be very surprised at what Apple can do with its economies of scale. The smaller rival hardware vendors will have to call it quits because there will be no money in it for them. There must be dozens of recent Android smartphones that are causing fragmentation of the platform. Apple is able to unify all its devices making it much easier for consumers to choose from. Android smartphones may now have a 52% market share in the U.S., but Android really doesn’t stand much of a chance of survival against the iPhone and iOS ecosystem.
Great points. Thanks for commenting.
I’ll argue on the technical points.
One – it is hard to produce 40 or 50 million iphones even with factories running 24/7 with 3 shifts. So supplies may be too limited to do a world-wide launch all at once. It is hard to believe that iphone 5 has already been in production for months – especially with news reports just recently coming out about LG, Sharp, etc being tapped to make the 4 inch screens.
Two – placing both the CDMA and GSM radios does sound good, but it is more expensive since both parts must be installed. Makes for a sweet world-wide phone though.
Three – make no mistake here, Apple is not about increasing consumer choice, or best device at best price point, or about sending a message about which market has a priority over another, – they are in it 100% to make money. Period. (Apple’s own existing customers holding iphone 4s are the most hated group since they will not be buying 5 for a while. That’s a bad dynamic where your older product IS the competition.)