While I view the iPhone 5 from Apple (AAPL) as more evolutionary than revolutionary, I have no doubt that initial sales will be very strong. Why? US carriers make it almost a no-brainer for many US customers to upgrade. I can currently sell my 2 year old 16GB iPhone 4 for anywhere from $150 to $200 on various websites (eBay, Gazelle, cashforiphones, etc.). A 16GB iPhone 4S can be sold for over $260. This means that if you have an iPhone 4s and you qualify for a subsidy from your carrier, you actually can make money by upgrading! Alternatively, if you are happy with the iPhone 4, you can still cash in your old smartphone for over $150 and get a brand new iPhone 4 for just 99 cents! Some carriers have become a little stricter with requirements for upgrade eligibility. Nevertheless, given these economics, it may even make sense for you to break your existing contract and move to a new carrier. You can always qualify for the subsidy if you change carriers.
The US market is somewhat unique in the fact that most US wireless subscribers are on "post-pay" plans. Most of us have two year contracts and pay a flat rate plus any overage costs at the end of the billing period. Because US carriers get a relatively predictable source of cash flow from you, they can afford to heavily subsidize your iPhone purchase. Subscribers in many other countries are on "pre-pay" plans. They pay for talk-time and bandwidth consumption up-front and then buy more as needed. The lack of a contract and variability in usage from month to month makes it uneconomical for many foreign carriers to subsidize the purchase of new hardware much, if at all. In fact, some foreign telecom companies actually try to make a profit from selling iPhones.
The regional difference in business models has created an interesting dynamic. US consumers, who qualify for subsidized upgrades, pay very little to upgrade and, in some cases, can make money to do so. This is because they have willing buyers for their older generation phones in foreign markets, where phone subsidization is not the norm. Consequently, US telecom companies are not only subsidizing US consumers, they are also indirectly helping foreign consumers to buy older generation iPhones in the secondary market.
The biggest variable regarding short term iPhone unit sales will be whether Apple will have enough supply to meet demand. Given CEO Tim Cook's key strength and background is in operations, I would be surprised if Apple disappoints here. The company has significantly improved its ability to scale after each successive generation of the iPhone. Furthermore, the attractive subsidized pricing for the iPhone 4S and the practically free iPhone 4 will ensure a healthy mix of older generation iPhones going forward. These older generation phones have practically no capacity constraints.
In summary, while I still am keeping an eye on any signals that Apple may have made the wrong long-term strategic bets, I have no doubt that short-term sales of the iPhone 5, 4S and 4 will be strong. The large subsidies from US telecommunications companies essentially ensure success.