Wednesday, March 9, 2011

The iPhone 5 Surprise: No Intel Inside


In this article, Ross of Fiscal Times discusses the much awaited arrival of the iPhone 5. This new innovative device will be released in the summer of this year which is Apple's prime time of sales. The iPhone is already making waves because of its sleek design and news of new software. All iPhones produced last fall came equipped with software from Intel. The only downfall of this software was that in order to make the jump to Verizon in February, Intel had to create a brand new chip that would support the data in the Verizon iPhones that was different than the data in the AT&T iPhones. The new iPhone 5's will come standard with new chipsets from Qualcomm which is able to support both Verizon and AT&T's data networks. This loss for Intel was one of great magnitude and drove the sale of those iPhones down. But for Qualcomm it was a great benefit. The predicted sales will be very high for the new iPhone being released this summer. Also, the new iPad 2's being released will also contain this new Qualcomm chip and they have already seen great sales. With the release of the new iPhone 5, earlier generations of the iPhone will see a drop in price as they already have.
http://www.thefiscaltimes.com/Articles/2011/03/07/The-iPhone-5-Surprise-No-Intel-Inside.aspx

13 comments:

Alison said...

That is a very big hit to Intel, but maybe not immediately. While the demand for the iPhone 5 will be much higher than that for the 4, the price will also be higher since it's a new product. The price for the 4 will go down, and that might be what some people are waiting for. Maybe Intel can still make money off of the old iPhones for a while, at least until the 6 comes out.

Cara Sheffer said...

I think that this will not impact Intel as much, only because they do have the new iPad coming as well. The demand for both of these products will be extremely high and therefore that will take a slight blow but not too drastic. They have plenty of revenue coming in from all of the MacBooks as well as the iPad and other iPhones. It will be interesting to see where this takes Intel in the future though.

Lindsay said...

I agree with Cara, I think it will be harmful to Intel just because they are losing money from this, but they still have a big income coming in from other products. I would imagine that Qualcomm would eventually take over since they are using them. It might be easier for Apple to stick with one company. If this were to happen, Intel would seriously be in trouble then.

taylor said...

This won't be too much of an impact towards Intel because, like stated above, they do have other products that will still need their business. Verizon will probably have a vast demand for the Iphone 5 since it will be a new product with new qualities. As Lindsay stated, it will probably be easier for Apple to stick with one company instead of two competitive ones. The only bonus of having two competitive companies will mean that they will constantly be pushing to be better than the other.

Elianah Gorin said...

I do think this will be a benefit for Apple... although this phone will be coming out so shortly after the IPhone 4 and the prices for that will fall as well as the demand, the stock for apple will go up a lot. No matter when the new phone comes up apple constantly will go through the rise and fall of their high end phones. Every time a new phone comes out the oldest models price will go down as well as the demand. The IPhone 3 G isn’t even sold anymore and the 3Gs is now at $50 where it started at the normal 200. For those of us willing to wait for the demand of the hot new thing to go down this works but if apple ever want to keep a price up and the demand they should stop leaking info of new products. This only cause people to wait for the new one instead of by the current one, or worst wait for the new product to get the old one at a lower price. The question then becomes what will apple chose? Will they stop making new product so rapidly and releasing them to the public? They are at the point that they no long pay attention to the idea of supply and demand and only listen to the demand of a new product will better “things”. On top of new products there are constant new updates and apps forever product they own. Apple is on top of the idea of supply demand and quantity supply.

Katherine Diamond said...

Apple has been one of the most successful companies because it always has something a new product on its way. With the iPhone 5 coming out this summer the apple stock will rise in their sales. I agree with Elianah the apple stock is like a roller coaster it rises than falls than goes straight back up again, and then does the same cycle all over again. The constant drop and rise of the stock is because apple is always coming out with an upgrade, but between the leaking information and the release of the new product the stock tends to fall. The stock falls because people are waiting for the new product and don’t want go and buy the iPhone 4 when everyone knows that the new iPhone will be out soon. If apple stopped leaking the information of a new product it may solve their stock problem, but it would not be good for many of us. I also agree with Lindsay, Intel will lose some money but it will not ultimately bankrupt them. Intel has many other products on the market and losing the iPhone 5 to Qualcomm should not be to harmful for Intel. Ultimately Qualcomm will become very profitable from the release of the chip inside the iPhone 5.

Zach said...

I don't see this as a real issue for Apple. They will continue to make money as long as they are creating innovative products. Whether its an Intel chip, a Qualcomm chip or a Lay's potato chip inside the iPhone 5, Apple will get their money.

Haley said...

I agree with Zack, Apple really doesn't have muh to worry about. They are such a strong company will so many loyal consumers that trust whatever apple makes that they wont worry much about changing from Intel to Quelcomm. Maybe I don't see the big difference because I'm not a computor guru or anything. Or did apple have to pay more to get the new Intel chip for verizon? That part is a little confusing for me. And you also have to think that intel does more than just produce chips for iPhones,the are such a huge company I'm sure in the end them creating two different chips want make a huge dent in their revenues.

Connor said...

So Intel doesnt make the chips for the new iPhones, but will they still be making chips for the old ones?

Tyler said...

I need a new iphone, but don't want to buy one that is almost old so I am waiting until summer to buy the new iphone 5. I don't really even know how different it will be from the 4, but there seems to be no reason to buy the 4 when the 5 will be available so soon. Unless it is alot cheaper then maybe I will get the 4. But, it is only a couple of months to wait to see the differences in the phone and the price so I will wait.

Eric Edwards said...

With Apple producing the new iPhones with chips from Qualcomm, Intel will be taking a huge hit. Not only iPhones, but iPads are also using the new Qualcomm chips to support the data used by the device. With the use of these chips, Qualcomm will see big profits. With the iPhone being recently released to Verizon, Intel has all the right to blame Verizon for their drop in profit. On to the subject of the new iPhone 5, of course many people are looking forward to the release of it. I don't see how Apple can keep coming out with new versions of iPhones every year. It is pretty difficult to come up with new groundbreaking ideas everytime a new iPhone comes out. But, even if it is just a new design, people will always be compelled to buy it just because its the newest version.

Upper School Government and Economics said...

You would think that with the iPhone 5 coming out with the new Qualcomm chip, Intel would take a big hit economically. But, for intel it might not be as big of a hit as you would think. With the iPhone 5 coming out, it means that the prices of the iPhone 4 (intel) will go down, and some people could be waiting for that rather then wanting to purchase the iPhone 5. You have to weigh the costs and benefits of buying the iPhone 5 over the iPhone 4. The iPhone 5 may be new and pretty but is more expensive then the iPhone 4. Do u want to have the new updated version for more money, or be fine with the old version but pay less. In my opinion, I would rather purchase the iPhone 4.

Daniel K.

Sam Kimichik said...

Daniel is absolutely correct. Even with the loss of the intel chip in the iPhone 5, more people will buy the iPhone 4 because of the decrease in price. The decrease in price will cause a shift in demand for the iPhone 4 and the iPhone 3. People who cant afford the new and improved iPhone 5, might conisder buying the iPhone 3 or maybe even a droid from verizon. A lot of people might even consider waiting for the iPhone 5 inorder to see what the iPhone is like without intel, also when a new iphone comes out,there are continuous software updates inorder to fix bugs in the software. So even though the new iPhone will have qualcomm instead of intel, intel's loss will be elastic in that its loss wont be imidate.