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Tim Cook, the chief executive of Apple, unveils the iPhone 5 in San Francisco, California. David Paul Morris / Bloomberg News, NPD Group, Gartner
Tim Cook, the chief executive of Apple, unveils the iPhone 5 in San Francisco, California. David Paul Morris / Bloomberg News, NPD Group, Gartner

Apple stalks glory with iPhone 5

Perhaps the most surprising thing about the unveiling of the US tech giant's latest smartphone is the accuracy of predictions about the look of the device. Less clear is how much longer the company can maintain its breakneck growth.

After all that pre-show hype, it turns out the most surprising aspect of Apple's latest announcement is the company's avid followers were bang on about exactly what the iPhone 5 was going to look like: thinner; lighter; and packed with better-running parts.

But while analysts expect blockbuster sales of Apple's new smartphone worldwide, certain issues are likely to make it harder for the company to keep growing at a rapid clip within its home market of the United States.

"There's only so many new consumers, new adopters, for them to convert - the well is drying up, I think," says Ben Arnold, the director of industry analysis at NPD Group, a market research firm.

"Obviously, there is huge opportunity abroad," he adds, "so we may see the strongest numbers come from outside the US."

The iPhone 5, which will sell for US$199 (Dh730) to $399, is set to start shipping from next Friday in North America, the United Kingdom, France, Germany, Australia, Japan, Hong Kong and Singapore.

It will then later make its way to the Middle East, although middlemen are likely to help local retailers in the UAE find models well in advance to sell at a premium price over here until the official roll-out.

Some have estimated the phone could fetch Dh10,000 to Dh12,000 here initially. While Apple's latest mobile is 18 per cent thinner and 20 per cent lighter than its predecessor, the iPhone 4S, its screen will be slightly stretched to 10.16cm and it will be available in either black or white.

It will also be able to snap photos while shooting video and link to faster 4G LTE networks, making it possible to download digital content faster.

But Apple's unveiling in the US on Wednesday came amid renewed controversy about its manufacturing and labour practices in China and it is just one of a slew of recent smartphone announcements coming from an increasingly crowded industry.

On Tuesday evening, just hours before Tim Cook, Apple's chief executive, took to the stage to announce the iPhone 5, Google decided to release some news of its own about its Android mobile operating software:

"Today is a big day for Android 500 million devices activated globally and over 1.3 million added every single day," wrote Hugo Barra, Android's director of product management, on his Google+ page.

LG and Samsung, as well as Motorola Mobility and Nokia, have also stepped into the spotlight over the past month to show-off new offerings of their own.

Last week, Acer launched two of its new smartphones here, while HTC is expected to make a global announcement about its latest mobile devices on Thursday.

"If a particular gadget survives more than six months, it's a super hit," says Sheriff Rizwan, the chief executive and founder of ALshop.com, an online retailer in the UAE. "The shelf life, or even product life, is in terms of months now."

The dynamics of the smartphone industry are shifting in different parts of the world, particularly as Apple and Samsung increasingly pound out smaller rivals in certain markets.

In the US, Apple and Samsung together now command more than 50 per cent of the market, "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", Stephen Baker, vice president for industry analysis at NPD Group, wrote on the company's blog last week.

In the Middle East, experts say there is still ample opportunity for growth in the mobile sector, although not always for Apple.

The company has long lacked lower-cost feature phones, which has been a popular segment in this region and dominated by other rivals.

Nokia in July released its latest Asha models in the UAE that include touchscreens and apps but only cost about Dh289 to Dh320.

Increasingly, Samsung and lower-cost brands from China such as Huawei and ZTE have also become serious challengers in this space.

But, because so many high-end devices get sold in this region and in particular the UAE, prices of smartphones are unlikely to drop across the board anytime soon, analysts and retailers say.

Brands such as Research in Motion's BlackBerry Porsche and Bold, as well as Samsung's Galaxy SIII and Galaxy Note, have proven to be top sellers among local retailers.

Plenty of people have also paid a premium price whenever Apple releases its latest phone elsewhere and before it officially debuts over here, a trend likely to continue with the iPhone 5. This also means Apple will probably keep the cost of its new models the same here as other markets once they are released, rather than discounting prices.

"In this part of the world, we've seen Apple maintain their price points because there is clearly sufficient demand for the product," says Ashish Panjabi, the chief operating officer for the tech retailer Jacky's Electronics.

"What is also unique in many instances in the Middle East is that many consumers don't choose between Apple, Samsung or BlackBerry," he adds.

"They have multiple devices and you often see consumers with either a BlackBerry and an Apple device or a BlackBerry and a Samsung device."


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