Market Overview

iPhone 5 Won't Help 4G Market Soar

Apple (NASDAQ: AAPL) is expected to accomplish a lot of things with the newly announced iPhone 5, but expanding the 4G LTE market may not be one of them.

According to Ronan de Renesse, a Principal Analyst at Analysys Mason, the iPhone 5 will have a "less than expected" impact on the 4G market, particularly in Europe.

"[The iPhone 5] is not compatible with 800MHz and 2.6GHz LTE bands used by many operators across Europe," de Renesse wrote in an e-mail this morning. "The LTE mobile tariff mark-up will be a deterrent for many user and non-LTE operators will price the iPhone 5 more competitively."

de Renesse indicated that Apple could have a difficult time convincing users to buy an iPhone 5 for 4G coverage.

"Our research indicates that 46% of iPhone 4 users believe that they already have 4G," de Renesse explained. "The question is how do you convince those customers to buy an LTE contract?"

The analyst added that iOS 6 could actually prove to be more disruptive than the release of the iPhone 5. "Google (NASDAQ: GOOG) Maps will lose up to a third of its mobile users in Western markets because of Apple's alternative map service," said de Renesse. "According to our recent study in partnership with Arbitron Mobile Trends Panels, 28% of Google Maps users in France, Germany, Spain, UK and the US are on iOS. Three out of four iOS users used Google Maps at least once over two months."

Further, de Renesse said that location information and mapping "are at the forefront of application innovation."

"By offering its own map service, Apple will not only gain control over one of the most popular applications on its devices but it will also offer developers better and more integrated location-based tools for iOS," he said.

"Apple's Passbook will take mobile couponing to the next level. We estimate that one-third of smartphone owners use mobile coupons. With 435 million iTunes accounts, Apple could easily extend Passbook into a mobile payment application. This is something Google Wallet lacks."

Finally, de Renesse said that the iPhone 4 -- which is now free with a two-year contract -- could make a "serious dent" in the mid-end smartphone segment, "despite still being rated as a high-end smartphone."

"iPhone 4 will come free on a two year contract in the US, making it much more affordable for the mid-end segment," he said. "According to our forecast, there will be more prepay than contract customers converting to a smartphone in 2013 in Europe. This means that most of the smartphone sales growth will come from low/mid-end customer segments. The iPhone 4 now retails at €400, which is a similar price point as Samsung's Galaxy S2."

Follow me @LouisBedigianBZ

Posted-In: Analysys Mason Apple iPhone 5 Ronan de RenesseAnalyst Color Analyst Ratings Tech Best of Benzinga

 

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