EE's 'exclusive' on 4G iPhone 5 catches analysts' eyes

EE's 'exclusive' on 4G iPhone 5 catches analysts' eyes

EE's effective exclusive on the iPhone 5 is the most eye-catching implication of the handset's launch, according to analysts, although Apple has a battle on its hands to slow the surge in demand for Android.

Last night, Apple confirmed the rumours that the iPhone 5 would be the latest handset to support 4G. EE is planning to launch the next generation service in the coming weeks. Matthew Howett, practice leader of Ovum's regulatory telecoms team, said last night's announcement leaves EE with 'an initial monopoly on sales' of the iPhone 5. He added: The question will of course be how many non-EE customers will make the switch. Many will already be in contract with their existing provider, however, with more than two years since the last major release (the iPhone 4), there could be a good number of people in the market for a new mobile provider.'

CCS Insight MD Shaun Collins added: 'The inclusion of LTE1800 in the new iPhone 5 gives EE a de-facto exclusive on the product for 4G in the UK. This will undoubtedly leave EE's marketing departments purring at the possibilities. However, it will do little to ease the war with rival operators and we can expect Vodafone and O2 to be formulating their Plan Bs pretty quickly.'

Strand Consult MD John Strand argued that the iPhone 5 will be bad for operators. He said: 'The new iPhone will negatively stimulate the operators' churn and lead operators' costs for subsidies and dealer commissions to skyrocket. This happens because customers cancel contracts when a new phone comes along. To get new iPhone 5 customers, operators have to pay Apple and its distributor dearly for the privilege to carry the iPhone, a cost that is difficult to recover from new subscriber revenue.'

The device, which had no major surprises amid the flurry of pre-announcement leaks, got a mixed response from critics, although analysts were unanimous in their view that it would be an incredibly strong seller. David McQueen, principal analyst at Informa Telecoms & Media, said: 'While the new hardware may not quite stack up against other products, it is Apple's ability to create stylish, desirable products attached to a rich set of services that it hopes can set it apart to create differentiation. The new optics, an upgrade to Siri, photographic capabilities and mapping functionality also add to the importance of those elements for the competitive landscape, especially in light of recent announcements from Nokia, Samsung and Microsoft.'

Analysts said competition will be rife between the major manufacturers in the months ahead. Francisco Jeronimo, research manager at IDC, argued the features of the iPhone 5 will not be enough to convince consumers who have switched to high-end Android devices to return. He added: 'We will continue to see Samsung investing massively at the point of sale, with higher sales commissions, promotions, and campaigns, not to mention the price cut expected on the Galaxy S III and Galaxy S II. This new device will be a major competitor to BlackBerry and Windows Phones devices, but will not be able to surpass Android volumes driven by lower prices and hundreds of devices available on the market today. It will, however, allow Apple to grow market share again, from a declining trend in the last two quarters.'

Editor: Graeme Neill

Written by Mobile Today
Mobile Today

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