Apple’s decision to switch to a smaller dock connector for the iPhone 5 may frustrate consumers whose old cables and accessories are essentially rendered obsolete, but it should give Apple and other iPhone accessories manufacturers a nice little revenue boost.
Apple will generate about $40 million in revenue in the next fiscal quarter from customers worldwide paying for cables that work with the iPhone 5′s new dock connector and at least $100 million in revenue from the new cables over the course of the next year, according to an estimate provided to Mashable by Michael Morgan, a senior analyst with ABI Research covering mobile devices.
Morgan predicts that Apple will ship 47 million iPhone 5s globally in the fourth quarter of this year — a conservative estimate by some standards — but he expects that only 5-10% of those customers who get the latest iPhone will end up purchasing a new cable for it. The rest will just use the free cable that comes in the box. Based on this, he predicts that some 2 million cables will be sold at $20, generating around $40 million in revenue in the next quarter.
This is only one part of the accessories sales that will be driven by changes to the latest iPhone. Apple and other companies also stand to benefit from sales of new docking stations designed to fit the iPhone’s smaller connector. Morgan estimates that there will be 5 million to 10 million iPhone docking stations sold in the next year, with prices averaging $150-$175 a pop, potentially generating more than $1 billion in revenue for the accessories industry.
In particular, Morgan expects that the hospitality industry will drive sales of new iPhone 5 docking stations. “A lot of hotels buy iPhone docking radios, a fairly expensive unit that can be hundreds of dollars depending on the quality,” he said. “That’s not going to work now.”
What’s more, anyone with a car charger will need to purchase a $30 adapter in order to connect it with the iPhone 5.
For Apple, all of this extra income amounts to little more than a drop in the bucket considering that the company generates more than $100 billion in revenue on an annual basis. But for Apple’s customers, it can quickly add up to a significant expense.
Cables, adapters and docking stations aren’t the only accessories whose sales will be driven by the latest iPhone. Case makers also stand to make a pretty penny from the iPhone 5, which is longer and thinner than the iPhone 4 and iPhone 4S, and so won’t work with previous generation cases.
According to ABI, 75% of those who purchase an iPhone buy a protective case, and the average selling price for a case is $18. If we assume that Apple will sell 58 million iPhone 5s by the end of this year, as analysts surveyed by Bloomberg predict, then sales of iPhone 5 cases will bring in $783 million in revenue for 2012.
Verizon has confirmed that its version of the iPhone 5 will not support simultaneous use of voice and data over its LTE network — and that means Sprint’s model won’t, either.
SEE ALSO: 4G Explained – What is LTE?
According to Apple, both Verizon and Sprint will offer the same version of the iPhone 5, so Sprint’s phone will not support simultaneous use either.
Verizon’s first iPhone did not allow for simultaneous talking and data usage, a limitation of the company’s CDMA network. There had been hope that an upgrade to LTE would fix the problem.
An Apple spokesperson told Mashable that the “iPhone 5 supports simultaneous voice and data on GSM-based 3G and LTE networks. It is not yet possible to do simultaneous voice and data on networks that use CDMA for voice and LTE for data in a single radio design.”
Verizon’s other LTE phones all offer simultaneous voice and data use over LTE.
AT&T’s iPhone — which uses GSM technology rather than CDMA — does allow for simultaneous talking and web surfing.
Sprint did not return a request for comment.
Planning to get an iPhone 5? Which carrier will you choose? Let us know in the comments.
Even though the iPhone 5 has not yet entered the wild, Jimmy Kimmel gave random people on the street the opportunity to test the gadget out to see how it compares to its predecessor.
The catch? The supposed iPhone 5 he asked people to review was actually the 4S, and no one had a clue.
Reviewers decided the iPhone 4S was brighter, lighter, heavier, thinner, and faster…than the iPhone 4S.
BONUS: Hands-on With the (Real) iPhone 5
The media gets a first look at the iPhone 5
Black and white iPhone 5
Black and white iPhone 5s
The new iPhone 5 next to the iPhone 4S (Left)
New charging port
Apple's new earbuds
New charging connector
Lightning charging cable
Before you get all jazzed to show off your new iPhone 5, take a look at the gadget you’ll be flaunting in a few years: the iPhone 10.
Bonus: The iPhone 20, as envisioned by Alessio Biancalana. It might be large, but at least it’s Jedi-approved.
Something truly astonishing happened in San Francisco Wednesday. And it had nothing to do with the iPhone 5 launch.
In the blue above the city, three skywriting jets hired by an artist and a design company wrote the first 10,000 numbers of Pi — yes, 3.14159 and 9,994 more — in dot-matrix numerals a quarter-mile high.
Carefully coordinating each plane to write every third character, they looped the number-string 150 miles around the Bay Area, a feat that made geeks everywhere gasp and think of three more characters: O, M and G.
Meanwhile, down on the ground, a technology company released a phone that was a little bit taller.
I don’t mean to begrudge Apple‘s big day. The launch event was a lot of fun. The iPhone 5 is a superior gadget with plenty of under-the-hood incremental innovations, and seems certain to become the world’s bestselling smartphone. The LTE battery life thing is a cool achievement. We get it. If I were on the iPhone 4 two-year upgrade cycle, rather than being halfway through my 4S contract, I’d probably be lining up for one come Sept. 21.
But the “Pi in the Sky” project served as a timely reminder of how much technology can awe and inspire, and that technology companies should try hard to make new things that push the boundaries of that. In fact, it put me in mind of Sergey Brin’s fantastic aerial display at Google I/O.
At that launch event, the Google co-founder bounded on to stage, in an unscripted moment that would make Tim Cook blanche, and asked us if we would like to see a demonstration of his mysterious experimental glasses-with-a-tiny-screen project, Google Glass. Why yes, Sergey, yes we would.
We were rewarded with a jaw-dropping live stream from the glasses of skydivers in a Zeppelin, one of the world’s only three Zeppelins, which happened to be flying right over our heads. The skydivers parachuted onto our roof, jumped on bikes, did tricks, then zoomed into the hall to deliver the glasses. And the crowd went wild.
A stunt? Certainly. But it spoke of the daring risk that Google is taking with Project Glass, an entirely new kind of user interface. The kind of roll of the innovation dice that it’s unfortunately hard to imagine Apple making under its current leadership.
The world’s most valuable company has chosen to play it very safe indeed, throwing all its engineering know-how into microscopic levels of innovation in a handful of hardware products. What’s the only new Apple gadget on the horizon for sure right now? A smaller iPad.
And that’s great. More power to them. I can’t wait to see the iPad Mini either. But at some point soon, Apple might have to look around and admit it has ceded the title of Silicon Valley’s most innovative and inspiring company to Google.
As a loyal Apple user who can’t bear to imagine Android fans getting that smug, I implore Tim Cook: Please don’t let that happen.
Tim Cook’s Walter White Moment
If you’re a Breaking Bad fan, you know this recent and resonant scene (spoiler alert) where Skylar White drags her husband to a storage locker. Here she’s been keeping his surplus cash, spraying it for silverfish, unable to count it because each bundle is stuffed with too many denominations. Skylar turns to Walt and asks: Is this, finally, enough?
(Not quite a spoiler alert:) It does the trick.
I’d like to think that at some point Tim Cook will be taken to a storage locker, or rather an aircraft hangar, and shown the entire pile of Apple’s cash on hand. The company had $100 billion just sitting around in early 2012, and that could grow to $200 billion in 2013.
Apple has grudgingly announced it will start to give $45 billion of that to shareholders, in the form of dividends and stock buybacks (the latter is more an investment for Apple than a giveaway). For the rest, it won’t account.
You can look at this all sorts of ways, but economists tend to get very frustrated at the fact that Apple simply refuses to reinvest this money in the economy — take chances, grow the company, design lots of new things, hire lots and lots of people to make and sell them.
That’s the way money is supposed to work. That’s the way it has worked, historically, in America. And when the world’s most valuable corporations choose to sit on their hoards like feudal lords — especially at a time of high unemployment — the economy suffers. People suffer. And Apple itself suffers, because it’s leaving even greater growth on the table.
It makes sense that Tim Cook would want to keep a healthy hedge against the future, a rainy day fund. Like Walter White, he’s been burned. The scars of 1997 and ’98, when the company was teetering on the edge of going out of business, are still there.
Cook was the inventory guy Steve Jobs hired to fix that problem, and he became the master of delivering just a few products in massive quantities very quickly. This was what part of what took Apple from zero to $100 billion in 14 years.
But the other half was innovation. Specifically, a leader who worshipped it. Who invented entirely new product categories. Who would constantly pepper Jonathan Ive, Apple’s design chief, with product proposals that began: “Hey Jony, here’s a dumb idea.”
Jobs was a restless innovator. Toward the end of his life, he was not only coming up with supposed breakthrough ideas for a television — the still-rumored iTV — he was sketching out designs for planes and boats that outshone those of his billionaire pal Larry Ellison.
The “just a few products” limitation was something Jobs imposed on the company reluctantly, as a way to make it focus, to get out of its rut. But he always wanted to stretch the limits of what technology could do — such as saving the music industry from itself.
Cook has earned the right to run the company the way he wants. And for all we know, Jobs-like innovations at the macro level continue quietly in the most secret bowels of Apple. (They’d have to be a whole lot more secret than the iPhone 5 features.)
But the signs don’t point to that. They point to a company that is spending just 2% of its revenue on R&D, is focused on exquisite tiny details (those shiny diamond-cut edges!) at the expense of big ideas, and is satisfied with being ever more dominant in a few categories with reiterated products.
Jobs’s comeback was Apple’s second act. Now comes its third, in which the old rules and careful constraints don’t apply. An act in which the company has to decide in what way to expand, now that it has so much cash it could build more than 50 Space Shuttles.
So here’s hoping we’ll see some moonshot product launches, ones that surprise and even risk making us laugh (remember how we joked about the iPad name?). Here’s hoping Apple gets what SpaceShipOne builder Burt Rutan once told me. “If you don’t have a consensus that it’s nonsense, you don’t have a breakthrough.”
Here’s hoping, even though — especially when — it’s pie in the sky.
1. Nano rainbow
2. Nano size compared to iPhone 4S
3. Lightweight design
4. Thin design
5. Back design