iPhone 5 - why it is crucial to Apple?

Adam Leach, Ovum analyst

AUSTRALIA: It has been widely reported that today, Apple will launch its latest version of the iPhone.

“The launch of the next version of the iPhone is critical for Apple. The company has had phenomenal success with the iPhone 4 and in order to sustain its growth, it needs the next version to be another hit.

“The mobile phone market has witnessed the rise and fall of handset vendors based on the success or failure of a single product. To mitigate against this, most handset vendors have opted for a portfolio approach and launched a range of devices which appeal to a wide variety of consumers across geographies. However, Apple so far has relied on a single model and therefore needs the new version of the iPhone to be even more successful than its predecessor, in order to grow its business.

“Adding more advanced technologies and innovation into the next generation iPhone means it will remain a high-end proposition, and indeed to get iPhone 4 users to upgrade it needs to push the envelope in this regard. However, to achieve a wider market penetration for the iPhone, Apple needs to push down the price range.”