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Apple unveils thinner, more powerful iPhone 5

PUBLISHED : Thursday, 13 September, 2012, 5:38am
UPDATED : Thursday, 13 September, 2012, 12:27pm

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Apple on Wednesday introduced its new iPhone 5 - a lighter, thinner and more powerful version of its iconic mobile device, staking its claim to leadership in the red-hot smartphone market.

Apple chief executive Tim Cook called the launch "the biggest thing to happen to iPhone since the iPhone."

The company called the iPhone 5 "the thinnest smartphone in the world," with an anodized aluminum body that is 18 percent thinner and 20 percent lighter than iPhone 4S.

It features "diamond cut chamfered edges and glass inlays for a truly incredible fit and finish," an Apple statement said.

At a packed launch event in San Francisco, Apple marketing chief Phil Schiller said of the new iPhone: "It is an absolute jewel. The software and engineering that went into this product is the most challenging our team has ever taken on."

Apple will start taking orders for the phone Friday and begin shipments September 21 in the US, Canada, Britain, France, Germany, Australia, Hong Kong, Singapore and Japan, and the phone will be available in 100 countries by the end of the year.

Pricing for US customers will start at $199 with a two-year contract.

The introduction has been among the most keenly anticipated in the tech world, with rumors and leaks over several months about the new device from the biggest company in the sector.

Schiller said the new, taller iPhone features a new design to nestle in one's palm to naturally align with thumbs and works on the faster mobile Internet networks known as LTE.

"When you carry your phone it should fit beautifully in your hand, that is just how we designed iPhone 5," he said.

"Everything you do looks gorgeous on this beautiful widescreen display," he said, describing the so-called Retina high-definition four-inch (10-centimeter) display used on other Apple devices.

The new device features Apple's own new A6 processor, which according to Schiller doubles the speed for loading Web graphics.

Battery life, a key complaint of smartphone users, is extended to eight hours with mobile phone and browsing and 10 hours if Wi-Fi connections are used.

Apple has also installed its own mapping software, upgraded its voice-activated assistant known as Siri and incorporated Facebook in the iOS software.

Analysts expect Apple to sell tens of millions of the new iPhones in the coming months, luring in smartphone buyers who have been waiting to upgrade.

Morgan Stanley analyst Katy Huberty said it is possible Apple may ship between 48 million and 53 million iPhones in the fourth quarter and "up to 266 million" in 2013.

She said the company could sell eight to 10 million in the third quarter, or in the opening days it becomes available.

A JPMorgan Chase analysis said at least eight million will be sold in the US market this year, enough to give a half-point boost to US economic activity.

But NPD analyst Stephen Baker said the key US market has "very different dynamics" than for previous iPhone launches and that means Apple may not have the same impact.

"The US smartphone market appears to be an increasingly mature one," he said.

Because Apple has already captured a large chunk of the market, Baker said it would be "more difficult for Apple to easily take share from weakened competitors, because many of the easy share gains have already been accomplished."

Apple has fierce customer loyalty and has been rapidly gaining users, but has failed to keep pace with smartphones powered by Google's Android operating system.

Research firm IDC said Apple had 16.9 percent of the global smartphone market, with 68 percent of the market held by makers of Android phones, led by Samsung.

Apple is engaged in litigation with Samsung over patent infringement and is seeking to ban US sales of some Samsung devices after a major court victory in California last month.

Apple shares, which hit record highs this week and extended the company's position as the world's most valuable firm, rose a modest 1.39 percent to $666.79 on the news.

Nicholas Carlson of the website Business Insider said most of the information about the new phone had already leaked.

"The lack of surprise doesn't make the iPhone 5 a bad phone... just kind of boring to learn about," he tweeted.

Ben Reitzes at Barclays said much of the news was already known "but we believe that this launch will be very successful... We believe today's announcement marks the beginning of a distinctive holiday season for Apple that blends today's iPhone launch with the iPad mini launch."

Apple is widely expected to launch a smaller version of its market-leading iPad tablet computer later this year.

Wednesday's launch event also unveiled a new lineup of music players including the iPod touch, which looks like an iPhone without mobile connections, and the iPod nano.