Mobile wars: Stakes are high for Apple with iPhone5 launch as rivals catch-up

Apple is set to launch its new phone and it faces a battle to stay ahead of the game with cheaper rivals snapping at its heels

Apple's design guru, Sir Jonathan Ive, confessed recently that the original iPhone almost didn't launch. "There were multiple times where we nearly shelved the phone because we thought there were fundamental problems that we can't solve," recalled Sir Jony in London in a rare interview.

For Sir Jony, design perfection is everything and he has a track record with the Mac, iPod, iPhone and iPad to prove it. So the hype is building for the launch of iPhone5 next Wednesday.

Apple is famed for its secrecy, so few details have emerged, although a bigger, thinner screen is expected, after the success of rival Samsung's Galaxy range. There have also been reports that Apple could be introducing a custom-radio service to rival the US service Pandora.

The stakes are high for Apple because Wall Street expects it to sustain the momentum that meant it sold a record 26 million iPhones in the past three months.

Apple revolutionised the mobile market in 2007, confounding established companies such as Nokia and BlackBerry maker Research In Motion, which are still struggling. But five years on, the technology gap is closing as some other players play catch-up and, crucially, they are undercutting Apple on price.

"The days of the iPhone being miles ahead in terms of innovation are gone," says James Hilton, chief executive of M&C Saatchi Mobile.

What's more, this is a market that offers vast potential. Globally, analysts reckon it could grow to 1.5 billion devices a year by 2015.

In a sign of the intense competition, there is a slew of product launches this autumn. Last week, Samsung, which has overtaken Apple to become the world's biggest smartphone company in volume terms, unveiled a new Galaxy Note 2, dubbed a "phablet" as it is a cross between a phone and tablet.

This week, Nokia launched its Lumia 920 smartphone, with an "augmented reality" camera, to an admittedly lacklustre reception. Then Amazon revealed a big push into "mini-tablets" with its seven-inch Kindle Fire. And Canadian e-reader firm Kobo (which has a deal with WHSmith in the UK) unveiled what it claims is the world's smallest, lightest e-reader, which is five inches long and costs under £60.

In addition to Apple next week, HTC is launching a new mobile in New York the week after. And then there's Google, which has not only got its Nexus tablet but is also behind the "open" Android operating system, which is being used by so many of Apple's main rivals, notably Samsung.

In some ways, Amazon's announcement on Thursday was the most interesting this week even though the online retail giant did not produce a much-rumoured Amazon smartphone. The flagship is the new Kindle Fire HD, a high-definition seven-inch tablet.

Jorrit Van der Meulen, vice president of Kindle Europe, said it is being priced "very, very aggressively" from £159 in the UK. Part of the reason for the low price is because Amazon is keen to encourage consumers to buy content once they have got the device. Without much fanfare, Amazon launched its own app store in the UK last week and Kindle owners can now access apps, music and films from its LoveFilm service more easily, a clear challenge to Apple.

Mr Hilton of M&C Saatchi Mobile says: "With Amazon's host of services including their revolutionary app store (free paid-for app a day) and the announcements about their upgraded tablets and multiple-sized new Kindles, clearly they are taking this market very seriously."

What the new products from Amazon, Samsung, Kobo and others make clear is that with the rise of the "mini-tablet" and "phablet", the phone and tablet market is converging.

For those who wonder whether Apple might be fallible without its founder Steve Jobs, who died almost a year ago, it is worrying that the company has not yet come up with its own mini-iPad, although a launch is rumoured to be on the cards in October, and might even be a surprise next Wednesday.

The dangers for Apple have been underlined by Samsung's decision to launch the Galaxy S3, with a bigger screen and satisfying touchscreen, in May.

Sales have been booming as it has stolen a four-month head start over the iPhone 5.

Moreover, Samsung's range of cheaper phones means it can scoop up some of the wider mass market. Others rivals such as HTC, RIM and Nokia are lagging badly, with profits and revenues under continued pressure. Their challenge is to start producing devices again that consumers want.

Mr Hilton says it is a mistake to write any of them off: "Innovation has to be at the forefront of anything they do but with the smartphone and tablet market being in its infancy clearly anything is possible."

Now Apple is looking to Sir Jony and his design team for some real magic. "We're both excited and nervous around what's new," said Sir Jony in that interview. "Doing anything that's new that's great is very, very hard."

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Experienced Recruitment Consultant

£20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...

Day In a Page

Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones
Theme parks continue to draw in thrill-seekers despite the risks - so why are we so addicted?

Why are we addicted to theme parks?

Now that Banksy has unveiled his own dystopian version, Christopher Beanland considers the ups and downs of our endless quest for amusement
Tourism in Iran: The country will soon be opening up again after years of isolation

Iran is opening up again to tourists

After years of isolation, Iran is reopening its embassies abroad. Soon, there'll be the chance for the adventurous to holiday there
10 best PS4 games

10 best PS4 games

Can’t wait for the new round of blockbusters due out this autumn? We played through last year’s offering
Transfer window: Ten things we learnt

Ten things we learnt from the transfer window

Record-breaking spending shows FFP restraint no longer applies
Migrant crisis: UN official Philippe Douste-Blazy reveals the harrowing sights he encountered among refugees arriving on Lampedusa

‘Can we really just turn away?’

Dead bodies, men drowning, women miscarrying – a senior UN figure on the horrors he has witnessed among migrants arriving on Lampedusa, and urges politicians not to underestimate our caring nature
Nine of Syria and Iraq's 10 world heritage sites are in danger as Isis ravages centuries of history

Nine of Syria and Iraq's 10 world heritage sites are in danger...

... and not just because of Isis vandalism
Girl on a Plane: An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack

Girl on a Plane

An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack
Why Frederick Forsyth's spying days could spell disaster for today's journalists

Why Frederick Forsyth's spying days could spell disaster for today's journalists

The author of 'The Day of the Jackal' has revealed he spied for MI6 while a foreign correspondent