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

Published Mar 11th, 2013 3:20PM EDT
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 Executive Editor

Zach Epstein has been the Executive Editor at BGR for more than 10 years. He manages BGR’s editorial team and ensures that best practices are adhered to. He also oversees the Ecommerce team and directs the daily flow of all content.

Zach first joined BGR in 2007 as a Staff Writer covering business, technology, and entertainment. His work has been quoted by countless top news organizations, and he was recently named one of the world's top 10 “power mobile influencers” by Forbes. Prior to BGR, Zach worked as an executive in marketing and business development with two private telcos.