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Report claims iPhone 5, the best-selling smartphone in the world, will ultimately disappoint

Zach Epstein
March 11th, 2013 at 3:20 PM
iPhone 5 Lifetime Sales

As analysts continue to hit Apple (AAPL) hard, a new report claims the postmortem ultimately written on the iPhone 5 will reveal disappointing sales relative to initial expectations. Market research firm Strategy Analytics recently released a report claiming that Apple’s latest iPhone was the best-selling smartphone in the world during the holiday quarter last year, allowing Apple to reclaim the No.1 spot after Samsung’s (005930) Galaxy S III stole the crown earlier in 2012. Despite the phone’s current popularity, however, Raymond James analyst Tavis McCourt believes the phone will ultimately disappoint.

In a research note covered by ValueWalk on Monday, McCourt remained bullish on Apple but covered several short-term challenges facing the company. Among the issues facing Apple is the faster than expected descent of its latest smartphone, the iPhone 5. The analyst believes that lifetime sales of the handset will likely be respectable, but he outlines three reasons why iPhone 5 sales will ultimately be disappointing relative to initial expectations.

First, demand for the iPhone 4S has remained strong much longer than expected. According to Strategy Analytics, Apple shipped 17.4 million iPhone 4S handsets last quarter, making it the second most popular smartphone in the world behind the iPhone 5 (27.4 million units) and ahead of the Galaxy S III (15.4 million units).

McCourt also believes the iPhone 5 lacked a big selling point in many markets where LTE is not yet a factor. The iPhone 4S had Siri to drive upgrades when it launched, but the analyst doesn’t see anything new on the iPhone 5 that would draw a crowd like Siri did.

Finally, McCourt says Apple “whiffed” on launching a phone with a bigger screen. While the iPhone 5 sports a display that is taller than the screens on earlier iPhone models, it offers few meaningful advantages over the old 3.5-inch panel since the size difference is minimal.

McCourt says that iPhone 5 sales in the U.S. currently remain strong while sales in a number of key international markets are significantly slower.

Zach Epstein

Zach Epstein has worked in and around ICT for more than 15 years, first in marketing and business development with two private telcos, then as a writer and editor covering business news, consumer electronics and telecommunications. Zach’s work has been quoted by countless top news publications in the US and around the world. He was also recently named one of the world's top-10 “power mobile influencers” by Forbes, as well as one of Inc. Magazine's top-30 Internet of Things experts.

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