iPhone 5: the "biggest" thing to happen to iPhone

Krystin Li

science editor

The iPhone 5 finally made its official presence in stores on Sept. 21 with huge overnight lineups. Just like all other places with numerous Apple fans, the rumours of the upcoming iPhone have lingered around the UW campus for quite a while.

“I have been purchasing Apple products for seven years since I bought my first iPod Classic,” said Olivia Cheng, a fourth year student in biomedical science. “I like Apple’s designs very much. I think they are very simple and elegant. Their products are always equipped with the newest technology and are very user friendly.”

The new iPhone was designed to be thinner, lighter, and with a larger screen, compared to iPhone 4S. On top of that, the iPhone 5 has ultrafast wireless and an A6 chip, allowing faster downloads and operating speed. It has eight hours of battery life on 3G, one hour increase from iPhone 4S. The operating system is the upgraded iOS 6, although you can upgrade to it with older versions of the phone.

Although Apple claims the iPhone 5 is “the biggest thing to happen to iPhone since iPhone,” the statement encounters a lot of challenges when the real product is brought out to the market.

Many iPhone fans are disappointed to see that there is no significant change in the iPhone 5 from its previous version. The only thing it has is a little bit of improvement of every aspect.

“iPhone 5 disappoints me a little as I do not see big improvements on iPhone 5 from iPhone 4S,” said Cheng. “The big highlight of the 3D map turned out to be a mess, and I cannot even locate different buildings on campus on the new map. The ‘lighter and thinner’ is just not good enough for the Apple fans who have waited so long for this first iPhone after Steve Jobs passed away.”

The judgments on the successfulness of the iPhone 5 are quite extreme. Some people are totally disappointed in the new iPhone, while others claim that the iPhone 5 is the best phone in the era.

Since 2007, when Jobs first brought the iPhone to the market, it has been rapidly growing in popularity all over the world. People’s expectations of the new iPhone are huge. Although the iPhone 5 is equipped with all the features you would expect from a normal smartphone, it has not been built “outside the box.”

According to Kevin Hood, president of Market Access Corporation and economics professor at University of Waterloo, from economic point of view, the iPhone 5 is a success just for holding its position.

“Anybody in the smartphone world, who can hold their grounds and increase market shares, is doing a great job because it is extremely competitive,” said Hood. “I don’t know if you would call it a great success, because it depends on how you measure things. In some quarters it was not meeting their sales forecasts, while in others they the uptakes were so fast and amazing that they were not able to meet the demands.”

The iPhone is statistically the most purchased phone in the international market. The latest sales number was 26 million for the third quarter of 2012, a drop of 35.1 million from the previous quarter. As university students, we are by no means one of their most prioritized target market.

“When you are already the top, everybody is trying to undermine you, and just to hold your ground is a big win,” said Hood.

The retail price of the new iPhone is $699 before tax, and even with a three-year contract it costs about $200 depending on the service provider. The price of an iPhone is significally higher than any other choice of cellphone. However, a survey done in an ECON 344 lecture at the University of Waterloo showed about one third of the class was using an iPhone.

“We thought people would be living in their budgets. But when you love a brand, the brand loyalty is so amazing that people would actually work three extra shifts to buy the phone,” said Hood. “It is the same reason why people are lining up overnight to get the new iPhone. This purchase is a destination, and that type of brand loyalty is absolutely amazing. ”

So what has Apple done to its target generations to gain the solid brand loyalty? A few years ago when BlackBerry was still winning big, the iPhone was just emerging.

“I think the biggest advantage is that iPhone has the Apple app store,” said Cheng. “The quantity and quality of iPhone apps are extraordinary that no other phones in the market can compete. And it has so many apps that are very useful for university studies. The one that I especially like is iAnnotate PDF, it is very handy when it comes to take notes on the PDF in class. ”

Having an amazing app store is a great strategy to keep customers, but that is just one of its secret marketing plans.

According to Hood, the iPhone has built up a following by differentiating itself from what BlackBerry was all about. “BlackBerry was more seen as a business device,” said Hood, “with not a lot of apps, wasn’t really cool, but it was a good device. It was a perfect phone for my business because I don’t really need a thousand or five thousand apps.”

However, Blackberry failed to capture the target market that began to emerge with the consumers that just love more. With the iPhone, you get bigger screen, more apps, better camera… everything was more, and better.

For consumers in the smartphone market, who are restlessly looking for more apps and better phones, iPhone has constantly satisfied their needs by adding more to a phone and making things fancier.

“If you want to play in the consumer’s sandbox then you have to be giving more because consumers are excited when more comes out because they want more,” said Hood.

So, the iPhone has played the gave beautifully. It is not an erratically different phone, but it makes its presence in the eyes of consumers just by adding more utilities. Today, a cellphone has become much more than just a phone; it is everything you need at the tip of your finger.

As for BlackBerry, RIM was not really adding more. For quite a few years their phones were more or less the same. If they are positioning themselves in a business market, they are still very solid. But for the majority of consumers’ market, they are not meeting the needs and their expectations. That leaves a huge gap for the iPhone, who emerges and grows crazily in the smartphone industry.

Although amazed by Apple’s marketing strategy, according to Hood, he does not encourage UW students to purchase an iPhone, not because of the technology, but the community.

“The jobs are here for BlackBerry, and I don’t want to send jobs to California,” said Hood. “I called my daughter a ‘job killer’ because she went out to get an iPhone. To students I would say if you want to live here and become part of the community, buy BlackBerry. If you want to live somewhere else, still buy BlackBerry.”

For app builders who are looking into the opportunity of making money within the mobile industry, Hood emphasized the importance of making them cross multiple platforms. Which means that any mobile application should be built compatible with all major systems: Androids, iPhones, and BlackBerrys, because they all have market shares in the smartphone industry.

There are new technologies that help app builders to create multi-platform apps from one set of programming tools.

As an app developer, you want to become a board player in the market instead of a niche player. Otherwise, if your niche market declines and you are tied up in it, then you might have a long term problem.

“Think about the benefits to the consumers and think about the value that you bring to them,” said Hood. “There are a lot of app builders that don’t really think about what the market wants before they build the apps, and that’s why there are thousands of apps out there that were not well used; they are built before understanding the requirements.”