Has the iPhone peaked?

Is this the beginning of the end for Apple: With the death of Steve Jobs two years ago, many predicted the demise of Apple. Jobs' uncanny ability to create innovative products was perhaps only superseded by his ability to create entire markets.

First-gen iPhone from 2007. After 5 years of hot sales, has the iPhone and Apple peaked?
First-gen iPhone from 2007. After 5 years of hot sales, has the iPhone and Apple peaked?
First-gen iPhone from 2007. After 5 years of hot sales, has the iPhone and Apple peaked?

Has the iPhone peaked? Or the more important question: Are Apple’s best days behind it?

Then again, the two questions are one and the same.

According to a report by Nikkei, Apple has halved some iPhone 5 component orders. If true (an anonymous inside source is cited) then this would suggest demand for Apple’s flagship device has cooled after only six months on the market.

The news comes as Apple is rumored to be readying an entry level iPhone – presumably to enter the lower end of the market currently dominated by Android devices priced under $100 (and offered free by some carriers via contract subsidy).

There’s a myriad of reasons why the company reduced orders:

1. Apple is making room for the iPhone 6

Many suspect the move is routine; that Apple is beginning a months long cycle to reduce inventory, and make way for the iPhone 6.

A new iPhone has traditionally launched each fall. Typically older models are discounted and offered as a lower tier model, while marketing (and tech blogs) turn their attention to the latest and greatest.

This could be a likely scenario, save for the timing. It’s unusual to begin prepping the system for a new model this far (6 months) in advance.

2. Samsung continues to steal mobile share from Apple

Samsung continues to thrash the competition. That includes other Android makers such as HTC, and Apple and the previously unassailable iPhone. According to Gartner, in Q3 Samsung — buoyed by the success of the Galaxy S III — sold more than twice as many smartphones (98 million) as Apple (23.6 million), accounting for approximately 50% of the entire market.

The Android bet appears to be paying off handsomely for Samsung who offers handsets across all carriers in the U.S. and at a variety of price points.

3. The mobile market is maturing

The first generation iPhone was released in 2007, and after five years of hot sales many suggest the mobile market as a whole has peaked.

Potential customers, at least here domestically, have already purchased a smartphone of some kind, with many locked into one, two or three year contracts. Because newer models such as the iPhone 5 and Google’s Nexus 4 are so feature rich the impetus to upgrade is also potentially waning.

The Wild Card – Steve Jobs

With the death of Steve Jobs almost two years ago, many predicted the demise of Apple. Jobs’ uncanny ability to create innovative products was perhaps only superseded by his ability to create entire markets. The iPad was his crowning achievement. No competitor has come close to matching its market share or lustability. While Apple too had ups and downs under his leadership, all eyes are on new CEO Tim Cook to see if he can keep churning out the hits. 2013 could be the important year in the company’s storied history.

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