Why the iPhone 5 Will Be a Killer Out of the Gate: It's Late

We're in the run-up to the big Apple (AAPL) iPhone 5 announcement next week, and the sales handicapping is well under way. The latest tidbit is from a poll conducted by mobile ad network InMobi. Supposedly, 41 percent of current mobile users in the U.S., Canada, and Mexico will buy the iPhone 5, and half of them plan to do so in the first six months.

Assuming for a moment that the poll was representative and statistically meaningful (never a given these days), this could make for one super hot rollout. Even if the poll is off, the success of the launch seems like a dollars-to-doughnuts bet. There's a simple reason: Apple moved its rollout schedule to the fall from summer. That one simple change in timing can make a huge difference in business -- like millions more units sold.

Sometimes you need great, not good
Not that Apple has done badly in selling updated iPhone versions before. But the company has a lot more at stake now, given the dominant position that Google's (GOOG) Android has taken in the market.

Even though no one else is selling a single hardware line as effectively as Apple, there are bad implications of an Android ascendency:

  • Apple loses public attention, which means it must put more resources into marketing, which has an effect on margin.
  • The more attention Apple has to give its competition, the less attention it has at the top of the company for new strategic initiatives.
  • As more Android phones hit the market, a greater number will use lower price as a marketing tool. That has the long-term effect of lowering the amount the average consumer is willing to spend.
Not that any of these alone are crushing. But taken together, they could wear down Apple. One way of dealing with it is a massively successful product launch to take attention away from Android units.

Late can be better
Enter the launch delay earlier this year. In the past, Apple has been like clockwork, with certain products launching in particular seasons. Early summer has been the traditional time for Apple's iPhone announcements. But not this year.

It was likely the result of the supply chain disruptions from the earthquake and tsunami disaster in Japan. Such problems don't disappear immediately, and given the possible shortage of critical supplies because of the disaster, moving back a new iPhone launch, and the large volume of sales that follows, would make sense. A launch in later summer wouldn't work because you lose too many people to vacation.

Talk about making the best of a bad situation. The launch delay meant another full quarter of people coming to the end of their phone contracts who will make a decision in the middle of the hoopla. If the InMobi survey results are at all accurate, that could mean a big boost, as you can see in this table from the company:

Just to be conservative, discount the numbers by half, as asking people what they will do in the future is one of the least accurate types of market research. That would still be 12.5 percent of the many tens of millions of Android users and a quarter of BlackBerry owners if the iPhone 5 is a major update. Figuring that Apple would sell 50 million iPhones in the first two quarters of availability (it sold 20.3 million in the quarter that ended in June), that could still be a 10 percent to 15 percent bump.

That said, remember the predictions that 56 percent of Verizon (VZ) Android and BlackBerry users would switch to iPhones once the carrier got to sell the device. Verizon never saw anything like that big bump.


Image: morgueFile user chelle, site standard license.