Reuters reports that Apple (NASDAQ: AAPL) will launch the iPhone 5 in September. The news agency said consumers should expect a faster processor. It reported no important details beyond that.
The iPhone 5 faces challenges that its predecessors did not. The first of those is whether Apple is releasing the new generation of it product too quickly. That answer to that has been “no” in the past. The iPad 2 had extraordinary sales even through demand for the original iPad continued to be strong.
But, a short-term cycle of product introductions has a risk, particularly now that iPhone market penetration in the US is fairly high.
The other hurdle Apple has to a successful iPhone 5 introduction is Google’s (NASDAQ: GOOG) Android operating system. That challenge is not the usual one that analysts mention. Android may run on as many smartphones as Apple’s OS does. But, Android’s number of apps is modest and they are less well-designed than Apple’s. The Android developer universe is still not as large as Apple’s. Software developers still go where the money is. Android’s software package is under-featured.
The threat from Android is the software power behind a new generation of 4G smartphones. Apple has assumed so far that 4G is an emerging market and not a mainstream one. Verizon Wireless, AT&T (NYSE: T), and Sprint-Nextel (NYSE: S) are in the midst of a huge upgrade cycle of their customers as they fight to steal subscribers from one another based on the efficiency and reach of their 4G footprints, and attractiveness of 4G handsets.
Apple’s largest single mistake in the near term will be to release the iPhone 5 without 4G features.
Douglas A. McIntyre
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