Apple Unveils iPhone 5 As World Falls to Knees in Worship

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Hail your new god. Photo: Justin Sullivan/Getty Images

Today, Apple announced the iPhone 5, putting an end to months of leaks and rumors and giving those who enjoy live-blogs about inanimate chunks of metal and glass a cornucopia of choices.

The new iPhone, which will feature a bigger screen, a thinner body, LTE wireless, and a fifth row of icons on the home screen, matched up almost exactly with prerelease leaks — proof that Apple's much-vaunted secrecy can no longer ensure the element of surprise. CEO Tim Cook and his onstage phalanx of denim- and khaki-clad Apple execs don't engender the same "One More Thing" panache of the late Steve Jobs, but they desperately need new iPhones to keep ahead of Apple's competitors. The company depends on the phone segment for about half its revenue and more than half its profits. 

The phones, which feature a new "Lightning" connector and an improved camera with panorama mode, come at a time when Apple, the corporation, is at a crossroads. For the first time in its history, its most dangerous competitor for the disposable income and mindshare of the world's gadget-lovers may not be Microsoft or Google or even Samsung, but Amazon. Last week, while announcing the new Kindle Fire, Amazon CEO Jeff Bezos's poised delivery drew raves from the Silicon Valley peanut gallery, who crowned him — not Apple CEO Tim Cook — the heir to Steve Jobs's throne.

"Amazon has done what no other company apart from Apple does: have a singular voice, a singular pitch man, simple product line-up, release/shipping time table and products priced to move," wrote Om Malik.

Despite the splash its new tablet made, Amazon still has no phone and may never develop one. But there's no doubt that the iPhone 5 is entering a very different world than iPhones 1, 2, 3, and 4 did and that Amazon — with its massive distribution network, cloud computing platform, economies of scale, and rabid attention to process and cost efficiencies — is a long-term threat to Apple's dominance.

Apple, after all, is reaching a size that was once unthinkable for a tech company, with patent battles that make front-page news and product launches that affect our entire U.S. economy. (Analyst Michael Feroli of JPMorgan Chase expects that the new iPhone could lift GDP by between 0.25 percent and 0.5 percent in the fourth quarter.)

As Stephen Baker of the NPD Group observed, the iPhone's dominance in the U.S. smartphone market means that it has mostly weeded out weaker contenders (like Nokia and RIM) and is now battling the strongest of the survivors.

"[M]any of the easy share gains have already been accomplished," Baker wrote. "Blowing away all weakened competition, as Apple has done to this point, makes it infinitely harder to continue to blow away the remainder."

Baker's right to point out that overall growth in the smartphone sector has slowed to just 9 percent, meaning that, even if Apple continues to eat the vast majority of the smartphone pie, it's now a smaller pie, with fewer and more hardened competitors angling for pieces. As Business Insider's Jay Yarow put it: "The low-hanging fruits are all but gone."

So, if there was a note of trepidation in Cook's voice this morning, here's why: For the first time in several years, Apple has real competition. And if Amazon does decide to introduce a smartphone, Tim Cook may need more than a modestly improved iPhone to stay on top.