After a prolonged wait,
) finally unveiled its iPhone 5 yesterday. The latest version of
iPhone is much thinner and lighter than its predecessors. The
iPhone 5 is powered by Apple's new A6 processor chips and runs on
iOS 6, ensuring faster processing speeds.
As expected, iPhone 5 supports 4GLTE and DC-HSDPA wireless
connectivity that provides faster speeds for browsing, downloading
and streaming content over the Internet. The iPhone 5 will be
Sprint Nextel Corp.
Verizon Communications Inc.
With a weight of 3.95 oz, iPhone 5 is much lighter than its
predecessors - iPhone 4S (4.9 oz) and iPhone 4 (4.8 oz). Moreover,
the new iPhone is 18% slimmer than the earlier version with its 7.9
mm anodized aluminum body. In terms of screen size, iPhone 5 has a
4-inch 1136-by-640 Retina display, which is bigger and has a better
resolution than iPhone 4S and iPhone 4, which had a 3.5-inch
960-by-640 Retina display.
Though Apple has not altered the 8 mega pixel rear camera in
iPhone 5, the front camera is upgraded from VGA to much improved
1.2 mega pixel with 720p video. iPhone 5's Siri has new features
and supports more languages.
Apart from these, iPhone 5 has a new connector called Lightning,
an upgraded version from the earlier 30-pin connector. However,
customers would have to buy new accessories to use the iPhone 5.
Moreover, Apple has upgraded its standard Apple Earphones to Apple
EarPods. EarPods are small earbuds with built-in remote and
iPhone 5 is available in white and sliver or black and slate
colors. Customers can preorder their iPhone 5 from September 14,
2012 and will have to shell out $199 for the 16GB model, $299 for
the 32GB model and $399 for the 64GB model in the U.S. The phone
will be available in the U.S., Australia, Canada, France, Germany,
Hong Kong, Japan, Singapore and the U.K. starting September 21,
2012. iPhone 5 will be available in 22 more countries from
September 28, 2012.
We note that several new features of iPhone 5 are already
present in some of the smartphones available in the market.
However, considering the loyal customer base and international
expansion plans, we remain optimistic about Apple's long-term
growth. iPhones constitute a significant portion of Apple's
revenues and we believe that the performance of iPhone 5 will act
as a major catalyst for the company's forthcoming quarters.
We believe that the new iPhone could strengthen Apple's position
in the smartphone market. According to IDC, in the second quarter
of 2012, Apple's share in the smartphone market slid to 16.9% from
18.8% in the year-ago quarter. Over the same period, Samsung almost
doubled its market share to 32.6% from 17.0%. The new iPhone 5 will
definitely increase the Apple's chances to regain some lost
However, the impending lawsuits and stiff competition from
Samsung with its wide range of products in the smartphone and
tablet markets will remain an overhang on the stock going
We have a Neutral recommendation over the long term (6-12
months). Currently, Apple has a Zacks #3 Rank, which implies a Hold
rating in the near term.
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