After weeks of speculation, anticipation and a dose of hype, Apple Inc. is holding an event today at which it's widely expected to announce a new smartphone.
Analysts predict the iPhone 5 may be among the biggest consumer-electronics releases in history. The new device could contribute as much as a half a percentage point to U.S. economic growth in the fourth quarter, according to analysts at JPMorgan Chase & Co.
The iPhone 5 is expected to be introduced by Chief Executive Officer Tim Cook in San Francisco at the Yerba Buena Center for the Arts Theater, where Apple has held many product launches.
The new model will probably go on sale in a week or two.
Apple Inc. also plans to update its phone software this fall and will ditch Google Inc.'s mapping service for its own, as the rivalry between the two companies intensifies.
In a related development, Google said Tuesday that it was releasing a new YouTube app for the iPhone and the iPad. The changes come amid the expiration of a five-year licensing agreement that had established YouTube as one of the built-in applications in Apple's mobile devices.
Apple could sell as many as 10 million iPhones by the end of this month alone, according to Gene Munster, an analyst at Piper Jaffray Cos. By contrast, it took Samsung Electronics Co. about 50 days to sell 10 million of its flagship Galaxy S III smartphones.
Apple's debut of its redesigned iPhone will test anew its high-stakes strategy of once-a-year upgrades for a product that accounts for about 70 percent of the company's profits.
The new phone will probably have a new hardware design, including a bigger screen and thinner body, as well as new mapping software and compatibility with speedier next-generation data networks.
The iPhone 5 is expected to work with fourth-generation, or 4G, cellular networks. That capability is something Samsung's Galaxy S III and many other iPhone rivals already have.
Still unknown is whether Apple will announce today a smaller version of its iPad.
Apple dominates the market for tablet computers, shipping seven out of every 10 tablets in the second quarter, according to research firm IHS iSuppli. Rivals have been trying to compete by producing smaller, cheaper models รข€"such as Amazon's Kindle Fire. A mini iPad would challenge those relative newcomers.
Almost a year removed from the death of Apple co-founder Steve Jobs, the newest iPhone faces a growing army of competitors looking to grab a piece of a smartphone market that Bloomberg Industries estimates was worth $219.1 billion last year. Samsung, Google Inc.'s Motorola Mobility, Nokia Oyj and HTC Corp. are among those taking aim at Apple by introducing dozens of new devices each year.
The new iPhone will be Apple's first change to the handset's hardware design since 2010, raising anticipation among customers who have been holding off on buying a new smartphone.
The company garnered 43 percent of its $108.2 billion in sales last year from the iPhone. And because wireless carriers such as AT&T Inc. and Verizon Wireless subsidize the roughly $620 Apple gets for each iPhone sale, the device accounts for about 70 percent of its profits, according to Sanford C. Bernstein & Co. IPhone sales last quarter alone reached $16.2 billion, 33 percent higher than Google Inc.'s total sales and almost as much as Microsoft Corp.'s $18.1 billion.
"A lot is riding on this," said Chris Jones, an analyst at market research firm Canalys. "They have to make sure it's as good as people expect."
Apple's once-a-year iPhone introduction also helps build anticipation for each upgrade, with news outlets and websites speculating about what new designs and features will be offered. Glyde Corp. and Gazelle Inc., two companies that facilitate the trade-in of older gadgets, said they had seen a surge in business in recent weeks as people look ahead to the newest iPhone.
One of the biggest challenges for Apple may be manufacturing enough devices to keep up with demand. Shortages from screen manufacturers LG Display Co. and Japan Display K.K. may limit how many iPhones Apple can ship, according to Barclays Plc. That may hinder Apple's ability to sell about 50 million iPhones by December, as many analysts have predicted.
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