iPhone 5 release: What does it mean?

by Kevin Zettel, Universtity student

Sept. 12 brought us the release of what has easily been the most anticipated product of 2012. Tim Cook, CEO of Apple Inc., revealed the iPhone 5, and while the phone was not available for purchase until Sept. 21, preorders for the device from the event had practically flooded the company. But the release will have more than just a basic consumer impact. What exactly is the deeper meaning and impact of the iPhone 5 release?

For starters, the iPhone 5 will obviously affect Apple Inc. itself. As of Sept. 11 of this year, Apple Inc. shares are worth $666.85 each, easily making it the most valuable public company in the U.S. market to date. Over the past two quarters, around the time photo leaks of the device appeared, businesses and consumers began to anticipate the release knowing its potential effect on Apple’s value: iPhone 4S purchases slowed. Rival phones, like the Samsung Galaxy S III and Nokia Lumia 920, pushed forward their releases in expectancy of their competitor’s “and one more thing” moment. If this is any indication of the magnitude of the iPhone 5, the company could eventually increase its share worth by $50 to $100 after its release on Sept. 21.

Apple may be using this event for signaling other things to come, such as a smaller version of the iPad — due to the popularity of smaller tablets, such as the Samsung Nexus — a 13-inch MacBook Pro with Retina Display, updated iMacs, operating system iOS 6, and a new generation of iPods and iPod Touches. The iPhone 5 signals more products and, therefore, more opportunities for increases in Apple Inc.’s value. The release would also smash concerns of Apple Inc.’s falling from grace after the passing of former CEO and technology visionary Steve Jobs, as well as reinforce faith in current CEO and Jobs’ second-in-command, Cook.

The second impact will of course be on the entire phone industry. Remember, Apple Inc. is already on a near-impossibly high pedestal, now even higher thanks to the victory against competitor Samsung. The grueling lawsuit, in which Apple Inc. claimed Samsung intentionally stole patents and infringed property rights from their iPhone line to create the Galaxy S III, resulted in a landslide victory for Apple Inc.; not only did Apple Inc. win unanimously, but it was rewarded over $3 billion in damages. The devastating blow not only crippled the South Korean phone maker but sent a clear message to other tech rivals, Microsoft Corp. and Google, that any attempt to try and replicate Apple devices can and will lead to damaging consequences.

Google, in particular, was the main recipient of this message, after its release of Google phones in the market. The increase in Google’s share of the market consequently delivered a blow to their share in the software market, when Apple Inc. ultimately eliminated Google-integration from both its current and upcoming operating system. If the new iPhone becomes a monumental success, as indicated by the hype leading up to Sept. 12 and an assumed blowout record of preorders, Google could end up paying dearly for trying to take advantage of the phone market, and the punishment would be not receiving a greater profit from what could’ve been its awesome edge in the software market.

Finally, Apple Inc.’s iPhone 5 could potentially be a turning point in the American economy. According to an analysis conducted by JPMorgan Chase, the gross domestic product of the U.S. could actually increase by half of a point with just the purchase of 8 million iPhone 5s alone. But let’s remember, this is only an analysis; the iPhone 4S release back in October 2011 significantly exceeded expectations, so maybe 8 million seems a little humble compared to what could be the actual number sold.

The release is more than just a revolution in Apple Inc.’s iPhone line, it is a signal of further things to come from Apple Inc. And while many companies will try and attempt to create a device that comes close to being on par with the iPhone 5, the overall meaning of the release brings new hope to a company without a pariah and a country looking for an edge in a fumbling economy.