New device will push Apple up the leaderboard, while increasing shipments worldwide for smartphones
The arrival of iPhone 5 will trigger renewed growth in Apple's smartphone shipments in the third and fourth quarters following a decline in the second quarter, according to information and analytics provider, IHS. Apple suffered a 26% drop in shipments in the second quarter, to 26 million units, down from 35 million in the first quarter the research company stated. Apple's decline contributed to a 1% contraction in the overall global smartphone market in the second quarter to 135 million units, down from 137 million in the first quarter. However, the arrival of the iPhone 5 will help the global smartphone market return to growth with projected shipments of 346.5 million in the second half of 2012, up from 272.3 million during the first six months of the year.
'Apple's smartphone shipments typically are weak during the quarter preceding the launch of a new iPhone model,' said Wayne Lam, senior analyst, wireless communications, for IHS. 'Buyers historically have delayed their purchases until the newest model is available. Then they rush out to get the latest and greatest version once it's being sold, leading to a spike in demand. IHS predicts the same pattern will occur with the iPhone 5.' With the introduction of iOS 6 for both new and existing iPhone models, Apple is replacing the current Google-based navigation system it hosts on the phone with its own new location and navigation software, called Maps. With support for turn-by-turn spoken directions, a vector-based engine and a tilt-and-rotate interface, Maps improves Apple's offering for drivers. But Apple will need wide support from third party app developers to deliver on its ambitious goals for its new location platform, Ian Fogg, senior principal analyst for mobile at IHS, noted. Conflicting reports have surfaced on whether the iPhone 5 will include a near field communication (NFC) chip for electronic mobile payments. While Apple in the past has eschewed the technology, makers of smartphones based on Google's Android operating system have enthusiastically embraced it, shipping 106 million NFC-enabled mobiles in 2011 alone. 'iOS 6 will include support for Apple's new Passbook app, which will allow users to employ their iPhone 5 to redeem coupons, movie tickets, boarding passes and loyalty cards, and to conduct other financial transactions,' said Jack Kent, senior analyst for mobile at IHS. 'With its capability to tie purchases together, Passbook will be an effective tool for managing mobile transactions, mobile money services and mobile commerce. If Apple combines Passbook with its new location platform, the company will open both a new revenue stream and a new competitive front with Google.' Jagdish Rebello, director for consumer and communications at IHS, said Apple may choose to partner Passbook with new hardware support in the iPhone 5, such as NFC. 'If the iPhone 5 does include NFC, Apple will help the global market for NFC-enabled cellphones expand shipments by 118 percent to reach 233 million units in 2012.' This compares to 94% growth in 2011. Shipments will rise another 81% in 2013 to 420 million units. If the iPhone 5 does not include NFC, the forecast for 2012 and 2013 will be significantly reduced, Rebello noted. Because the new iPad that debuted earlier in 2012 offered 4G LTE technology, IHS expects the new IPhone to also offer LTE for the first time on an iPhone. This will deliver a major boost to global LTE subscriptions, depending on which frequency bands and service providers it supports.
Vinita Jakhanwal, director for small and medium displays at HIS, said that Apple's new iPhone is expected to move to a larger display size at about four inches diagonally, as opposed to 3.5 inches for the previous models, including the iPhone 4S. 'The iPhone 5 likely will employ in-cell touch technology using low temperature polysilicon (LTPS) liquid crystal display (LCD),' added Jakhanwal. 'In-cell touch technology places the touch sensors inside the LCD panel, as opposed to using a separate touch layer altogether attached on top of the LCD panel, an approach previously used by Apple. In-cell touch can help reduce the thickness of the display, which could make the iPhone 5 thinner than previous models, or clear out space to add other features like a larger battery that can help extend operating time.' Said Fogg: 'A larger iPhone screen will be even more suited to video playback than older models if Apple adopts a widescreen 16 by 9 aspect ratio. Apple's new iPhone will again transform the market for mobile content. This time Apple will revive the market for on-demand mobile TV and video.'
The likely display suppliers for Apple's iPhone 5 are LG Display Co, Sharp Corp and Japan Display, which all have in-cell touch technology capability. However, manufacturing rates associated with the new in-cell touch technology are likely to be lower than that for conventional LCD, which may have an impact on suppliers' capability to meet Apple's orders, Jakhanwal said.
