deg.io | blog

Why the iPhone 5 Never Arrived - Time to question BIG media?

Every single news media outlet was talking about the iPhone 5 last night. Even our local news here in L.A. (ABC7) proclaimed with certainty, that the new iPhone 5 was coming. Bigger Screen. Slimmer. New Design. WRONG!

My tweet from July 22, 2011 calling out the 60 day window.

Turns out my research was right. My timing was off by 12 days but that could have been solved with price tracking behavior. Big resellers change their prices on high end phones for short periods a little bit before something big happens. Unfortunately, that usually only works 30 days out.

Even the “chief whiner” herself was convinced there was a 5 coming: Calling Kara Swisher out on her “spin.”

Of course she ridiculed me for that tweet and said I was “parsing apple news like it’s a secret code and worldwide conspiracy.” And what happened? The leaked production numbers came out as expected within 30 days of launch. So why no iPhone 5? Economics for one and branding is the other reason: Apple knows branding is EVERYTHING!

Why no 4G/LTE now?

For that you have to understand a bit about semiconductor life cycles. Production of LTE chipsets by Qualcomm just isn’t mature enough. Low yields. Power hogs. Examples of this include the much delayed Droid Bionic. And the whole Motorola XOOM 4G upgrade fiasco. Apple is smart enough not to commit such embarrassing failures. The yield and power problems will be solved by next year as well as an increase in 4G saturation in all major cities.

So how did we know it would be a 4+ phone as opposed to a newly designed 5?

ECONOMICS! Apple either has some really smart economists or their executives paid attention in their Econ classes. In February, the Verizon iPhone 4 was released with a newer chipset inside made by Qualcomm (MDM6600). The MDM6600 is capable of working on both AT&T’s network and Verizon’s network. Why would you pay extra for that chip if it’s only going to work on Verizon’s network? Simple. They were planning for the future. A universal “World Phone” that can work on any network but with such functionality disabled at the software level. This also means a single production line for most of the components and lower production costs.

Why go through all that trouble and just end the design 8 months later?

They didn’t! Hence today’s iPhone 4S. Parts of the 4S actually started leaking all the way back in January! Also, why make a whole new phone when Apple can extract more consumer surplus by releasing the SAME phone with a new name? Apple can now produce the same phone with a lower production cost because of the design similarities.

The name: 4S instead of 5

The internals: Unified design, the same SoC as the iPad.

This sets everything up perfectly for a 2012 iPhone 4G. The media had all of these clues right in front of them and they did nothing. Instead, they jumped on the iPhone 5 bandwagon and CTRL+C their sources from Twitter for the evening news. If all they do is pass rumors as fact and never validate their sources, then what’s the point of having them? It scares me to think what other rumors have been passed on as fact and we never knew the difference…