Skip to main content

Sabrina Lemire-Rodger wants to see the iPhone 5, expected in the fall, before she replaces her cracked iPhone 3Gs.Peter Power/The Globe and Mail

When Sabrina Lemire-Rodger accidentally broke the screen on her iPhone for the third time recently, she decided not to bother paying to have it fixed.

Instead, she's doing what a lot of Apple Inc. customers seem to be doing these days: waiting to buy a brand-new one.

"If I get a new phone in the fall it'll either be an iPhone 5, or the 4 will become a lot cheaper and I'll just get that," said Ms. Lemire-Rodger, who has used an iPhone for more than two years.

"I figure it's worth the wait to see what'll be in the new one."

Even before it hits store shelves, Apple's new phone is cannibalizing its old one. The world's most valuable technology company reported a rare quarterly earnings miss this week, in large part because many of its regular customers aren't buying its current line of iPhones. They're opting instead to wait for the iPhone 5, which is widely expected to be released this fall. Until then, Apple's iPhone sales are slumping.

Fueling the frenzy of anticipation for the iPhone 5 are myriad rumours about its possible new features. Apple fans and observers expect everything from a sharper screen to better battery life, support for next-generation cellular networks – and the ability to use the phone as a digital wallet.

Apple has not even formally confirmed the existence of the iPhone 5 (or that the new phone, whenever it comes out, will even be called the iPhone 5). But it's clear many consumers aren't going to buy another Apple phone until they see the new one.

This isn't the first time consumers have stopped buying Apple products because they are waiting for newer, better iterations just around the corner. Indeed, Apple's near-clockwork schedule of upgrading its hardware lines – especially the iPhone and the iPad – has habituated consumers to expect new models around the same times every year.

But there are several factors exacerbating this year's pre-upgrade sales drought. Even though the last iPhone upgrade – the iPhone 4S, released in October as an upgrade to the iPhone 4 – featured myriad improvements, some Apple fans were expecting more. As such, they decided to wait to upgrade to the iPhone 5, rather than buy the current model and break their contracts.

"There was no feature that would make the excess fees worth it," said Colin Rogers, who owns two Apple phones, an iPhone 4 for use in Canada, and an unlocked third generation iPhone for when he's out of the country. He plans to replace both with a single iPhone 5 once the new device comes out.

One of the key determinants of the newest iPhone's success will be the extent to which it appears to be a significant upgrade over previous versions. Among the many rumours swirling around the new phone is the possibility it will look considerably different than older iPhones. It is also widely expected the new iPhone will feature a brawnier processor, allowing it to run memory-intensive software applications more smoothly.

But as consumers wait for the new iPhone, a number of new, competing high-end phones, most notably from Samsung and Motorola, have siphoned away some Apple customers. Unlike in previous years, Apple's newest smartphone will launch at a time when competitors have finally started to make inroads in the top end of the market.

Nonetheless, the same customer anticipation that's hurting Apple's sales right now may prove beneficial in the long run.

As Mr. Rogers points out, it would be difficult for him to switch to an Apple competitor because he has already spent so much on apps that run on Apple devices. He also owns an iPad, which syncs seamlessly with the iPhone. "I'm not an Apple guy for the sake of being an Apple guy."