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Apple iPhone 5: 'A Rolex Among A Sea Of Timexes,' Analyst Says

This article is more than 10 years old.

There's a weird thing going on with the Apple iPhone 5.

On the one hand, the very early indications are that consumers desperately want them. As the Wall Street Journal notes, pre-ordering this morning, on the first day of sale, appears to be so high that Apple's online store already is advising consumers that there will be a two-week wait for delivery, a week beyond next week's expected arrival in retail stores. Wall Street analysts likewise are falling all over themselves in joy, upping EPS estimates and price targets as they start factoring in iPhone 5 sales into their numbers.

But a lot of the media coverage has been less enthusiastic, asserting that the phone is less revolutionary than evolutionary, and that Apple in some ways has fallen behind some rival Android phones. There is grumbling about the new connector on the bottom of the phone, which immediately obsoletes old power cords and accessories, and there is dismay about the $29 price tag for the adapter Apple is selling so you can use those old peripherals with the new phone. There's also some disappointment over the revelation that apps written for the dimensions of the old iPhone will effectively be letter-boxed until they can be re-written for the larger screen included in the new phone. The mixed reception in the press for the new phone has attracted the attention of Piper Jaffray analyst Gene Munster, who asserted in a research note this morning that the phone is actually a lot more impressive than some of my ink-stained (and pixel-stained) peers in the media have been suggesting.

"We believe that while the media bubble around the iPhone 5 has met the phone launch with mixed opinion, the reality is that when actual consumers have the product in hand, we believe they will be impressed," he writes, in a research note headlined "Believe The iPhone 5 Is A Rolex Among a Sea Of Timexes." He thinks the iPhone 5 has Rolex-like quality, "while the majority of other phones are dominated by lesser quality plastic and feel more like Timexes."

And he asks this question: "Why would someone by a Timex when they can have a Rolex for the same price?"

Munster also notes that "consumer sentiment around the iPhone 5 is significantly better than it was for iPhone 4S despite the lack of excitement by the tech media" He is sticking to his view that Apple will sell 6-10 million units before the end of the September, with 49 million iPhones overall in December.

Munster contends that when it comes to the new iPhone, you need to get your hands on one to fairly evaluate it.

"We believe that pictures and video of the new iPhone 5 do not sufficiently convey the level of upgrade the product represents," he writes. "We were able to see and hold the device following the launch and believe there are two aspects that will pleasantly surprise consumers. First, we believe the actual feel and build of the phone is beyond that of any prior iPhone iteration. Second, we believe the weight difference between the iPhone 5 and the 4S is meaningful and consumers will notice the difference in their pocket, despite the larger screen size."

Munster also notes that according to Investing Analytics, tweets about the iPhone for launch day were up 460% from the iPhone 4S launch a year ago. Blog posts on the phone were up 100% from a year ago. "Most importantly, we believe the sentiment around iPhone 5 was significantly better than that of the iPhone 4S," he writes. "Based on the same study by Investing Analytics, we believe that 73% of tweets about the iPhone 5 during launch day were positive compared to 51% for the iPhone 4S launch. We believe this is to be expected given the phone is redesigned while the iPhone 4S was not. More importantly the positive reception of the phone gives us greater confidence that Apple can not only meet our 6-10 million iPhone 5 unit estimate for the rest of September, but also hit our 49 million unit estimate for the December quarter, which assumes 32% year-over-year growth."

While there may be doubters in the media, the Street continues to be dominated by true believers.

Apple yesterday had a new record close at $682.98, for a market cap of $640 billion. And this morning? The stock is up another $5.81, or 0.9%, to $688.79.