Gus G. Sentementes
10:02 AM EDT, September 21, 2012
Alex Alexiou had the haggard look of a rough night on the streets of Baltimore —red eyes, unkempt hair, casually disheveled clothes.
He spent the night out for what has become an annual ritual: The sale of the latest iPhone. Alexiou stood fourth in a line of more than 100 at the AT&T store in Harbor East. Across Fleet Street, around 60 people waited in line for the Verizon store to sell its latest Apple mobile device, the iPhone 5.
No other smartphone generates such feverish, urgent demand. Even as the iPhone turned five years old this year, the company’s latest version shows the device is far from middle age and can still draw legions of Apple fans out of bed to wait in lines.
“I’m just very brand loyal,” said Alexiou, 26, who previously owned the original iPhone, the 3GS and the 4. A big part of his loyalty to the iPhone is that it’s familiar and reliable. “I guess if I have something that works, I like to stick with it.”
The iPhone helped give birth to a new era of smartphones, surpassing the previous epoch dominated by Nokia, Motorola, Research In Motion's BlackBerry and Microsoft’s Windows-based phones, and less powerful so-called “dumb” phones.
A big reason for the iPhone’s success are the third-party applications, or “apps,” that the company allows users to run on the phones. More than 700,000 apps now populate Apple’s App Store, from games to photo editors. Other smartphones, such as Android, Windows and BlackBerry, also offer apps, but have fewer to choose from.
Analysts who cover Apple, whose stock recently topped $700 for the first time, estimate that the Cupertino, Calif.-based company will sell three to five million iPhone 5’s this weekend.
It’s been a rainmaker for Apple. Since 2007, the company has sold 86 million iPhones, raking in more than $50 billion in revenue, according to figures the company released in a recent patent fight with Samsung.
In terms of smartphone operating systems, Apple not have the most market share. In the second quarter this year, smartphones powered by Google’s Android operating system held 52 percent of the U.S. market, while Apple’s iOS platform had 33 percent.
But there are a multitude of Android phones, from different manufacturers on the market, while Apple goes to battle every year with just one.
And Apple soaks up the vast majority of profits in the smartphone industry — 71 percent as of last quarter, even though it only shipped 6.5 percent of the total mobile handsets sold worldwide, according to a stock research report from Cannacord Genuity, in Minneapolis.
“Once you’re in that Apple ecosystem, you almost never leave it,” said T. Michael Walkley, Cannacord’s managing director and communications technology analyst. “This will be a record launch for any consumer device in history. The sales of this will be much greater than the 4S. Other than Apple, you never see long lines for new product launches. To oversimplify it, Apple has become a status symbol.”
The latest iPhone is a departure from its predecessors in several ways. It is a new design, with a longer screen that can hold an extra row of apps. It has a metal back and new dock connector, for charging and connecting to accessories.
But it’s also familiar: It features the same, but more buffed operating system, iOS 6, with tighter integration with Facebook and Twitter. It still has the circular “home” button at the bottom of the screen, which users use to navigate through the device. And it’s still as wide as previous models, meaning that users of past iPhones will still grip the phone essentially the same.
Another big draw is the phone is available on the major wireless providers' next-generation networks, known as LTE, which offer data download speeds several times faster than 3G networks.
One change hasn’t been well-received by critics: Apple dumped Google as its maps provider on the iPhone and developed its own map application. The latest Internet sport is poking fun at misplaced landmarks in Apple’s Maps.
The starting price is $199 for a phone with 16 gigabytes of storage and a two-year contract with a wireless provider. It’s available on the three major ones: AT&T, Verizon Wireless and Sprint, as well as some smaller companies.
Apple has one of the top brands in the world, and people buy the iPhone not just for what it does, but how it makes them feel, said David Warschawski, CEO of Warschawski Marketing Communications, in Mount Washington.
“Apple’s brand DNA is they always want the consumer to feel a part of the future, and that you're tech chic,” Warschawski said. “You’re fashionable just by having the device.”
While in line at the Verizon store on Fleet Street, Dhakkiyyah Lee, 26, a restaurant worker from Baltimore, said she was switching from T-Mobile to Verizon Wireless to buy the iPhone. (The iPhone is not available on T-Mobile.) Lee had a Samsung MyTouch, an Android-based phone, but she dropped the phone and cracked the screen, so she was ready for a new one.
She gave up her BlackBerry three years ago, because “it just wasn’t keeping up,” she said. A co-worker convinced Lee to buy the iPhone over the new Samsung Galaxy S3.
“I’m a little excited to see how it works,” she added.
At the Mall in Columbia, the line for the Apple store was hundreds long, with the first person saying he had been waiting since 3 p.m. on Thursday.
Meanwhile, about 30 people lined up outside the Verizon Store on Snowden River Parkway in the brisk hours of early morning, with store manager Joe Janusziewicz pumping up the group in the minutes before the store's opening. Janusziewicz said people had started forming a line to buy the new iPhone “early,” and the fifth person in line said he had arrived at 5 a.m.
“Alright, we are good to go,” Janusziewicz said at 8 a.m., opening the doors.
Patuxent Publishing reporter Sara Toth contributed to this report.
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