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Report: Next iPhone May Not Have it Easy in U.S.

By Andrew Berg | September 11, 2012

While Apple has not confirmed an iPhone 5, all signs point to an announcement tomorrow. 

Investors in recent weeks have pushed Apple stock to record highs on rumor alone, with shares of the stock trading at $680 last Friday. But do record share prices necessarily portend record sales?  Maybe not, at least here in the United States. 

Stephen Baker, vice president of industry analysis for NPD Group, says that the iPhone might be a big hit around the world, but conditions might not be ripe for record sales here in the America. 

In a post on NPD’s official blog, Baker notes there are a few variables that could leave Apple’s iPhone 5 sales just shy of the usual otherworldly expectations heaped upon the company’s products. 

Baker contends that the iPhone 5’s success in this country may have little to do with “the strength of the new product offering, its hardware configuration, its marketing, or even its competition,” but rather the simple fact that the U.S. smartphone market appears to have matured.

Key to Baker’s argument is the flattening of postpaid smartphone sales recently, which hasn’t been the case for past iPhone launches. 

According to NPD, overall smartphone sales in the United States have been driven largely by pre-paid smartphones, with total smartphone unit-volume sales rising just 9 percent in the second quarter of 2012, compared to the second quarter 2011. Year-over-year post-paid smartphone unit sales were flat, while pre-paid smartphone unit volume almost doubled, rising 91 percent year over year.

Also, Baker argues that Samsung and Apple have already chewed up most of what they can take from Research In Motion and Nokia’s market share. 

“There is no clear #3 player to steal market share from, Samsung/Android and Apple have run away from the pack in the last year,” Baker wrote. 

Finally, Apple will be launching this latest model less than a year since it introduced the 4S, leaving many consumers trapped in 2-year contracts with little or no subsidy on an upgrade. Supposing the next iPhone costs $200 on contract, AT&T customers who bought into a contract with the iPhone 4S would have to pay $450 for the iPhone 5, which is what that carrier calls an “early iPhone upgrade discount.”   

To be sure, the iPhone 5 will be met with applause from Apple’s loyal fans, but Baker appears to be asking the question for how long that base can afford to support Apple’s record sales number with every successive device.

“Apple will have a highly successful launch, of that there can be no doubt,” Baker wrote, “but the inevitability of easy market share gains in the U.S. is not quite so apparent this time around, as it has been in the past.”

Apple is expected to unveil the next iPhone at an event in San Francisco tomorrow, with a launch later this month. Is expected that the new iPhone will have a larger screen, as well as LTE connectivity.


Filed Under: Devices

 

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