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Competition Creates Hype for Apple iPhone 5 Launch

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On July 31, Apple scheduled a media event for September 12.  Most expect announcement and quick release of the iPhone 5 and a likely announcement of a mini iPad by the holiday season.   Interestingly, over the ensuing three weeks, Samsung, Google, Nokia and, just now, Amazon have piled on and have set their own media events right before Apple’s, most likely in hopes of derailing the Apple event.  However, more likely is that these events will simply serve to build even greater anticipation for the Apple products.

On August 2, Samsung announced an August 29 media event in Berlin.  Samsung will introduce a Galaxy Note 2, the update to its successful Galaxy Note, which has sold over 10M units since its launch in October.    The Galaxy Note sported a 5.3” screen and the Galaxy Note is anticipated to have an even larger, 5.5”, screen.  In addition, this smartphone is expected to boast a 13MP rear-facing camera, LTE, and its S-pen.   The Galaxy Note 2 is one of the most anticipated of the Google Android smartphones to be released in 2012.

The other of highly-anticipated Google Android smartphones is the Google-Motorola Droid Razr HD.  Like Samsung, Google hopped on the event schedule as set by Apple and announced on August 17 that they would hold a media event on September 5, a week before Apple’s.  The Droid Razr HD is expected to sport a 8MP camera, which could be a disappointment in comparison to Samsung’s Galaxy Note 2 specs; however, generally, 8 MP will take a sharp photo.  The Droid Razr HD is rumored to have a big battery and NFC (near field communication) capabilities, enabling GoogleWallet.   The phone is not expected to be available until the end of October.

Squeezing on the bandwagon, Nokia announced on August 23 to host a joint media event with Microsoft in New York City on September 5 as well, strangely while their developers conference is underway in Finland.  At this event, Nokia is expected to introduce its successor to the high-end Lumia, which will operate on Microsoft Windows Phone 8.   Nokia and Microsoft are hoping that a successful launch of their new phones will place them in a solid third place behind Apple and Android (Google).  The Lumia released earlier this year, sold 4M units in Q2, compared to 35.1M iPhones in that same period.  It is unlikely that the new phones would be available before the end of October when Microsoft’s Windows Phone 8 will be released.

A day later, Amazon joined the fray and announced its own media event on September 6.  The calendar is getting crowded!  Amazon is anticipated to introduce a Kindle Fire to compete head-on with the iPad by introducing a larger-screen tablet.  Its Kindle Fire is the most popular 7" screen tablet, and it had been successful in its niche.  However, by introducing a larger screen tablet, Amazon is entering into a very competitive and potentially expensive market when it may have its hands full protecting the 7” category from Apple. There is some speculation that Amazon could also introduce a smartphone.  The possible justification is the increasing role of mobile devices in e-commerce; however, all mobile devices offer the Amazon app.  And, to come up with a “cooler” smartphone design will be a challenge, considering that Apple and Samsung, who own 85% of this market, have shockingly similar designs. Either of these strategies in smartphones and tablets  could be risky for Amazon.

The strategy deployed by the collective Apple Competition couldn't be better for Apple.  Once Apple set their stake in the ground for a product announcement, one-by-one, the competition came out to beat Apple to the punch.  Yet, it is unlikely that their respective “wow” factors will turn potential consumers’ heads away from the Apple event.  More likely, Samsung, Google-Motorola, Nokia and Amazon will set the stage and the bar for Apple to beat.   Should any of the competitors come out with features that don’t exist in the new iPhone, which they certainly will (like larger screen size or 13 MP camera), Apple can simply dazzle their audience and describe how those features don’t matter as much as the ones Apple will offer.  Furthermore, the events in sum will certainly point out to consumers that they "need" features that they don't have, and create demand for them.   And, given Apple's past product releases, it is highly probable that a new iPhone will be available within weeks (at the latest) to satisfy that demand.  On the other hand, the competitors do not appear able to bring the product to market until the end of October.   It feels like they could be building demand right into Apple's hands.

For smartphones, it has lined up to be a horse race between Apple and Samsung.  In the past quarter, Samsung earned almost twice the market share as Apple, although many speculate that consumers were waiting for this upcoming iPhone release.  Many attribute the movement around smartphone market share from quarter to quarter to product release dates.  It appears that the Q4 2012 will be the real test with 3 of the top 4 smartphone vendors announcing new advanced products (where is HTC?).

The iPhone 5 announcement and aftermath could be significant. The pent up demand coupled with the number of contracts ready to be upgraded and the approaching holiday season suggest that this product announcement will be a real winner.  If Apple comes out with a mini iPad by Christmas, its challenge will be to meet unprecedented demand by those who covet iPads drawn in by a more affordable price.  (See Four Super-Charged Apple Catalysts Going into Year End…Psst It Is Not Just the Mini iPad.  That article looks at the jump in Apple iPhone sales in the quarter a new iPhone is offered, as well as the potential costumers whose contracts are up for renewal in Q4 2012.)

In tablets, Apple has dominated.  If Apple introduces a 7” mini iPad, it will go head-to-head against Amazon, the leader in that space, and Google.   Apple has an excellent chance of dominating the 7” category as well, given its lead in apps, app developers, and mind share in the tablet space.  (See Five Reasons Why Google Android versus Apple iOS Market Share Numbers Don’t Matter.)

The fourth quarter of 2012 will be exciting.  It will test Apple’s lead in tablets and Apple’s competitors in smartphones.   Judging by this behavior of Apple’s competitors, Apple is still setting the bar in tablets and smartphones.