09.12.12

Is Apple’s New iPhone 5 New Enough to Beat Google’s Android?

The latest version of the smash-hit smartphone has a bigger screen and some modest improvements. Can it stave off Android?

For Apple fans, today was Christmas—the day the company unveils its annual update to the iPhone.

Video screenshot

‘Dan Gross heads to an Apple store to check out the new iPhone.’

The new iPhone 5 (which is actually the sixth version of the iPhone) is taller than its predecessors, with a four-inch screen, versus 3.5 inches on earlier models. That’s not a huge difference, but it’s the first time Apple has changed the size of the iPhone since the device was introduced in 2007. “This is the biggest thing to happen to iPhone since the iPhone,” Apple CEO Tim Cook said at the introductory event in San Francisco.

The phone will be available Sept. 21, and some analysts expect it will be the fastest-selling consumer-electronics device in history, with potential sales of some 10 million units in its first week and up to 50 million by the end of the year.  That’s good news for Apple, which gets more than half of its $150 billion in annual revenues from the iPhone.

The iPhone 5 has a new processor that’s twice as fast as the chip in the iPhone 4S. The phone supports speedy 4G LTE networks and has a better battery, better camera, and a screen that marketing boss Phil Schiller called “the world’s most advanced display.” There are three models, with 16, 32, and 64 gigabytes of storage, priced at $199, $299, and $399, respectively. As before, there are two colors: black and white. The device also has a new operating system, iOS 6, which has a new maps application (replacing Google Maps, which Apple had previously used) and some enhancements to Siri, Apple’s voice assistant.

“The new iPhone really is redesigned from the ground up,” says Tim Bajarin, the president of Creative Strategies, a Campbell, Calif., researcher. “Every component is different. People might look at it and say it looks like the same old iPhone, but when you hold it in your hand, it’s very different. It’s like a piece of jewelry.” Bajarin says he thinks the phones will leap off the shelves. “This will be a record quarter for Apple with the iPhone,” he says. “There’s so much pent-up demand from people who have the iPhone 3 and 4, who are coming due for an upgrade. They’re going to want this thing.”

The big question is whether these somewhat modest improvements will be enough to keep Apple in the race against an onslaught of new smartphones running Google’s Android operating system and Windows Phone from Microsoft.

Apple executives made big claims about how revolutionary the new phone is and how incredibly difficult and challenging it was to make it. But in fact the biggest new features of the iPhone 5—its bigger display and support for 4G LTE networks—have been available on Android phones for more than a year, and Apple is merely catching up. And despite the legions of iPhone fans, Apple has fallen far behind Android. Two years ago Apple and Android were roughly even in market share. Today Android has 68 percent of the market, four times as much as Apple has.

Apple also unveiled a new iPod Nano with a 2.5-inch touchscreen, a new iPod Touch that has the same four-inch screen as the new iPhone 5, and a new set of earbuds, called EarPods, which Apple claimed took three years to develop.

In all, the company played it safe, delivering incremental improvements to hit products. That’s probably a smart move. Apple has built such a powerful, successful, and profitable franchise that it doesn’t dare mess with the recipe too much, so as not to scare off its incredibly loyal fan base.

But compared to the introduction of the first iPhone, way back in 2007, today’s event felt like a bit of a letdown.