How hot is the iPhone 5 Analysts are now expecting the phone to be the bestselling mobile device of all time.
There is a worry, however, that the device will represent a peak of the smartphone market, particularly in the U.S. The number of American smartphone subscribers is expected to reach nearly 140 million by the end of 2012, equal to 57 percent of wireless customers.
It is expected that the percentage of wireless subscribers with a smartphone is on pace to eclipse the 70 percent threshold next year, or the level at which most telecommunications services, like cable and broadband, have historically begun to slow their rapid rise. Because of this, the iPhone 5 might hold the U.S.’s sales record, possibly forever.
“The smartphone market, and particularly the iPhone market, will slow next year after very strong shipments of the next iPhone through year-end,” predicts Kevin Smithen, analyst at Macquarie Securities.
The U.S. smartphone upgrade rate has already begun to fall, thanks to elements like limited innovation and expensive upgrades from carriers. Activation fees have also been increased, incentivizing more tiered plans and lengthening the contracts.
“These moves should result in fewer total upgrades â€¦ than seen in prior launches,â€ said Mike McCormack, analyst at Nomura Securities.
While iPhone sales nearly doubled in 2011 and is expected to double again in 2012 to roughly 20 million, with two-thirds of the 30 million iPhones sold in the U.S. sold to new customers. Expansion after this year, however, looks flat.
iPhone represented 45 percent of all smartphone sales last year with Verizon, AT&T and Sprint. That figure is expected to to rise significantly this year . . . then level off.
“We do not believe that Apple can grow its market share at the Big Three beyond 70 percent, as we expect several new low-end smartphones from Amazon, Huawei, LG, Nokia, Microsoft and Motorola in the new year as well as a Samsung Galaxy S4 at the high end,â€ said Smithen.
Because of these factors, Macquarie predicts that iPhone sales will top out at 46.3 million next year before falling to 45.5 million in 2014. Of course, if Apple makes the iPhone 6 an innovative, disruptive device then things could change.
“As long as there are Apple fanboys and fangirls, there will always be demand for the iPhone,â€ says Ramon Llamas, analyst at IDC. “There’s so much about the iPhone that people love and lust over, and Apple just kind of ropes you in. There’s a lot to keep Apple’s momentum going.”