5 ways to assess how well the new iPhone 5 may sell

After the launch of the iPhone 5, analyst firm Strand Consult published a rather detailed research note, which provides some interesting clues on how to examine its sales.

The memo came to life after we learnt that the iPhone 5 is fractionally more expensive than the previous iPhone 4GS, that it smashes the £500 psychological barrier and that Apple sold more than two million units in the 24 hours immediately after its latest smartphone went on sale.

The five points laid down by Strand Consult are:

  • How different is the new iPhone 5 from previous iPhone models? It is £30 more expensive than the iPhone 4S and the gap between the two has increased to £80, making the latter comparatively more enticing. As Strand Consult puts it, the iPhone 5 doesn’t expand the market of people who can afford the iPhone, but that was never Apple’s aim.
  • Does the new iPhone have a new form factor that makes it attractive to new customer segments that did not purchase it before? As for the differences in specification, they are numerous and although each individually wouldn’t be a compelling purchase factor, taken together, they could make of the iPhone 5 an attractive product although the research firm believes that the phone is a minor facelift of old models.
  • Which customers will purchase the new iPhone 5? Are they new customers or existing iPhone customers who want to upgrade? Strand Consult says that existing iPhone users will likely constitute the bulk of iPhone 5 buyers. This we agree with, although some existing customers are going to baulk at the £529 SIM Free price of the phone, which perhaps explains why we have witnessed a genuine effort from mobile phone operators to offer the best possible iPhone 5 contracts. That goes as far as including unlimited calls, unlimited texts and unlimited internet.
  • The analyst firm also reckons that an increase in the number of iPhone 5 smartphones being sold on contract will negatively stimulate operators’ churn and inflate the cost of subsidies and dealer commissions, which will in turn affect their net profit margin and their share prices. To make matters worse, rival networks will have to invest heavily to catch up with EE, which will make the most of its 4G network in the UK.
  • As for iPhone smartphones sold or recycled after the launch of the iPhone 5, Strand Consult reckons that they will end up being used either with SIM only contracts or on PAYG, which may favour smaller MVNOs (Virgin Media, Tesco Mobile and ethnic MVNOs).

You can win an iPhone 5 in our iPhone 5 competition by answering a simple question about what generation the Phone 5 is. Check the ITProPortal live report on Apple’s announcement. Other than the iPhone 5, we saw new iPod devices but no cheaper version of the iPhone 4S, an iPad mini and potentially a 13in Macbook Pro with Retina Display. You can also check out our list of iPhone 5 contracts available in the UK - all 86 of them.