Apple's (AAPL) iPhone 5 became officially available today and has already sold out in many of Sprint's stores. Apple's latest device is flying off the shelves, with huge lines reported outside Apple Stores in New York, Boston and Minneapolis.
Piper analyst Gene Munster predicts Apple will sell 8 million units by Sunday. This despite widespread user frustration with a few aspects of Apple's new operating system, iOS 6 -- in particular the company's decisions to dump Google Maps and go with its own flawed Maps implementation, and to pull Youtube out of the preloaded apps.
The Maps situation has been widely reported, and may pose the biggest long term danger to iPhone 5 sales. Google has reportedly already prepared a version of Google Maps for iOS 6 awaiting Apple's approval, but Apple is almost certainly unwilling to say "uncle" and go with it, instead preferring to fix problems with its own Maps application. Apple spokeswoman Trudy Miller told AllThingsD that "we appreciate all of the customer feedback and are working hard to make the customer experience even better. She added that Apple, "...launched this new map service knowing it is a major initiative and that we are just getting started with it. Maps is a cloud-based solution and the more people use it, the better it will get."
But while users are frustrated with Maps in iOS 6, there are features such as Passbook -- an app that lets you store tickets, cards and coupons in a mobile wallet-like interface -- that seem to be an immediate success. According to some early data from Branding Brand -- the company that built the "Beauty Insider" Passbook card for cosmetics and skin care retailer Sephora -- Passbook adoption is flourishing, accounting for 20,000 Passbook cards within two days of the release of iOS 6.
Recent data shows that smartphones have just recently become 50% of the total U.S. cell phone market and are expected to reach 54% of the world's market by the end of next year. This means there still is a massive market for smartphones. With the fanfare associated with the release of the iPhone 5, Apple has shown once again that it has a huge fanbase for its smartphones. But it remains to be seen what percentage of iPhone 5 buyers are new to the iPhone and what percentage are upgrading from earlier models.
In either case, the market data suggests there is still a huge untapped potential for Google's (GOOG) Android and Microsoft's (MSFT) Windows 8 Phone to continue to expand their market share. In the short term, Apple will steal all of the headlines with the lines of people waiting to buy the iPhone 5, but over the longer term, its competitors' platforms may reap the rewards of Apple's embarrassingly poor mapping implementation in iOS 6.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.