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Network World - Apple faces a dramatically different U.S. smartphone market for iPhone 5, expected to be announced Wednesday, than it did when it launched the first iPhone in 2007: today, roughly half of mobile users are already have smartphones.
That could mean that while iPhone 5 may be a "gigantic success around the world," it may be less than gigantic in the U.S., says Stephen Baker, director of industry analysis for The NPD Group, in a blogpost this week.
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"The iPhone 5 will launch into a U.S. smartphone market with very different dynamics than the launch window of the iPhone 4 or the iPhone 4s," he writes. "And these dynamics have nothing to do with the strength of the new product offering, its hardware configuration, its marketing, or even its competition. The U.S. smartphone market appears to be an increasingly mature one."
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Baker cites recent data from The NPD Group that shows the U.S. mobile market growing by "just" 9% in the second quarter, "and all of that growth was the result of increased prevalence of pre-paid devices in the market." Apple's iPhone models, including the older, lower-priced ones still on sale are not offered in the pre-paid segment.
ComScore data from June (but reported in July) show that smartphone users, as a percentage of total U.S. mobile phone users, was just under 50% and by now is over that percentage. Other comScore data show that nearly half of feature phone users who buy a new mobile phone opt for a smartphone.
"The iPhone, as well as Samsung's phones, have continued to gain brand share over the past year and their joint share now exceeds 50%, which is likely to make it more difficult for Apple to easily take share from weakened competitors, because many of the easy share gains have already been accomplished," Baker argues.
A similar dynamic is evident when comparing the market share of mobile operating systems. "On the operating system side, iOS and Android have such dominant share that, as with brands, growing faster than the market will increasingly require taking share from a much stronger competitor, as opposed to merely vanquishing those who are already falling by the wayside," Baker says.
And Apple can't look to expanding sales by adding new top-tier carriers. "Last year's iPhone 4s launch could still take advantage of selling into...the remaining huge untapped base of potential subscribers at Verizon and Sprint who were not available to them previously," Baker writes. "This year's introduction faces the specter of a much smaller base of previously unavailable consumers, based on their carrier preferences." In other words, many Verizon and Sprint customers who had wanted an iPhone have already bought the 4S within the past 12 months and are unlikely to be upgrading to the new model.
That isn't stopping T-Mobile USA. Though the carrier apparently will not be formally carrying the new iPhone, T-Mobile is stepping up efforts to attract customers with unlocked iPhones to its network, stressing its lower-cost data plans.