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Paulo Santos, Think Finance (372 clicks)
Long/short equity, arbitrage, event-driven, research analyst
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In what has become a yearly event, Apple (AAPL) today unveiled its next iPhone effort, the iPhone 5. As always, I don't need to say how relevant this is for Apple. I've estimated, in the past, that up to 3/4ths of Apple's gross margins come from the iPhone. How the iPhone goes, so goes Apple.

Through continuous leaks in the press, we were able to know mostly every detail about this new iPhone well ahead of its official presentation, including how it would look, how the display would be and the changes to the connector. So, as Apple presented the device today, there was little surprise to be had.

Don't get me wrong. The iPhone 5 is a hugely competent device, with good-enough design and nice specifications including an updated CPU (the A6) and a larger 4", 16:9 display. It should sell in the tens of millions, no, hundreds of millions, during its life.

But, it's not an amazing device. It doesn't show us anything revolutionary. Even the design is just an extrapolation of the iPhone 4S that's a bit thinner and longer. The software upgrades are not amazing either. Nokia (NOK) has better navigation, for instance. And Google's (GOOG) latest "Jelly Bean" Android doesn't seem to lag Apple's iOS 6 in any significant department, either. At this point, it would seem the biggest breakthrough in the entire presentation were the new Apple EarPods.

In the past, Apple brought out the iPhone with an innovative multi-touch interface, and every other player was forced to copy it one way or another. It created an app/digital media market and all others had to do the same. It brought out retina displays and every other player was forced to follow suit. What is there for every other player to copy this time? Seemingly nothing. Indeed, in some areas like navigation, the phone's camera "low light" mode, the larger display and the use of LTE, Apple sounded more like catching up than leading.

Apple no longer set the tune. It left the playing for the Foo Fighters, and did just what it was expected to do, product-wise. There was no "one more thing" to he had this time.

In short, while the new iPhone seems good enough for Apple to carry on with its fundamental performance and produce the huge profits it has accustomed us to, it's perhaps worrisome that these presentations are no longer an event that sets the direction for the whole industry. It makes one think how long will Apple keep its extraordinary market position and margins while no longer being obviously ahead of the pack in the product itself - though in one small detail Apple still seems to be leading, with the product keeping its high end, jewelry-like construction when compared to others - like Samsung - which still seem to be putting out "consumer electronics".

Post Scriptum

One final comment, the pricing on the new iPods seems somewhat weird. Sure, Apple's brand image might sell some of those, but $299 for an iPod touch in the land of $199 7" tablets simply doesn't seem to cut it, and worse still, it makes one wonder where will Apple try to price its own iPad 7" mini when it unveils it (which is rumored to happen in October).

Post-Post Scriptum

This isn't exactly on the serious side, but here's what could be another perspective of today's launch ...

Source: Apple: One More Thing