Is Apple’s iPhone Still King?

Apple’s (NASDAQ:AAPL) iPhone 5 seems set to repeat the success of its predecessors: the company’s launch event on September 12 drew hype and excitement similar to, if not greater than, past iPhones, and it has already begun setting sales records. But despite Apple’s momentum, the online tech publication, CNET, warns that a lot has changed since the last massive updated iPhone was released more than two years ago.

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Philip Schiller, Apple’s senior vice president of Worldwide Marketing, described the iPhone 5 as “the most beautiful consumer device that we’ve ever created.” That may well be the case, but the smartphone market is much different than when the iPhone was first released. When the iPhone 4 was released in June 2010, it was clearly the phone to own. At that time, Google’s (NASDAQ:GOOG) Android phenomenon had not yet begun, Samsung (SSNLF) had not developed the Galaxy phone, and Nokia (NYSE:NOK) and Research in Motion (NASDAQ:RIMM) were at the beginning of their decline. Now, Apple must prove the superiority of its newest phone against the success Samsung, which has taken more than 32 percent of the market. The rivals have caught up.

Critics have noticed that the iPhone 5 is no longer far ahead of Samsung or Google-owned Motorola. Apple touts the iPhone 5’s improved camera, larger display, and 4G LTE access, but those features are all available on most Android-powered smartphones; Apple does not stand apart from its competitors in its phone’s specifications.

But while Apple’s iPhone 5 may no longer be the obvious choice for a first-time smartphone buyer, the product name still holds a certain cachet and the company commands a large market share.  Pre-order sales of the iPhone prove this; more than 2 million phones were pre-sold during a 24-hour period Friday, which doubled the record of the iPhone 4S.

Consumer demand for the iPhone 5 remains high as well: according to a survey from TechBargains, of those polled, 74% of iPhone 4 owners surveyed said they plan on buying the iPhone 5, along with 71% of 3GS owners, 64% of 4S owners, 38% of Blackberry owners, and 32% of people currently without a smartphone.

“While it lacked the mind-blowing innovation we have come to expect of Apple, [it] is differentiated enough to maintain a sizable product advantage over its competitors,” said FBR Capital markets in a research note.  The brokerage firm forecasts Apple’s shares to hit $1,000 within the next year.

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