Broke: iPhone 5 release date sees Apple richer than Treasury, ad blitz

July 29, 2011    

by Timmy Falcon

Apple’s cash machine for the iPhone 5 rollout is so larger that its release date sees the company with more cash on hand than the United States Treasury at the moment. While the U.S. is broke, Apple is positioned as exactly the opposite. that sets up the iPhone 5 release date as an occasion for Apple to blow as much money as it wants on a marketing ad blitz for the launch along with building up advance inventory. Apple has $76 billion cash on hand even as the Treasury only has $74 billion, leading to the inevitable jokes about Apple acquiring the United States in a leveraged buyout. But all kidding aside, Apple is in a unique position to come out swinging with the iPhone 5 when it launches, even as the fifth generation iPhone marks what Apple hopes is an inflection point in iPhone marketshare which will take it to the same dominant heights as its fellow iOS 5 devices like the iPad and iPod. Apple has begun taking some steps in order to take its shot with the iPhone 5, while others will need to wait to release day and still others will come after launch.

Apple’s single biggest move for boosting iPhone 5 exposure is already in place: a deal with Verizon to have the iPhone 5 on the nation’s number one carrier at launch. In fact Verizon wanted the iPhone so badly that it took an aging iPhone 4 to market a few months ago just to try to stop the bleeding after its customers had spent the past four years gradually defecting to AT&T for the iPhone. Verizon’s own internal data showed that the AT&T iPhone 4 was outselling the then-flagship Verizon Droid by a 5 to 2 margin at the time the Verizon iPhone 4 launched. But while a Verizon iPhone 5 will boost iPhone 5 marketshare significantly even while saving Verizon’s growth hopes, the move didn’t cost Apple anything in terms of cash; other moves will require an Apple investment…

The most obvious cash investment will come in the form of advertising. From TV ads to billboards to you name it, the iPhone 5 will be everywhere. Contrast that with the start of the iPhone 4 era, where Apple had so little inventory to go around in comparison to demand that there was little point in an exhaustive ad campaign. instead Apple’s ads focused more on specific features like FaceTime. But with Apple having reportedly made a massive manufacturing investment which will have fifteen million iPhone 5 units on hand by release date, that means Apple can advertise non-stop and will be able to meet as much demand as it can drum up.

But other avenues for iPhone 5 promotion exist. with Verizon and especially AT&T going slow with 4G network rollout, Apple could get into the game itself by subsidizing the tower-building in exchange for carrier concessions. that could in turn pay off in spades, as Apple’s vision for mobile devices involves heavy network data usage and instead the carriers are pushing for limited data plans and data speed throttling. If Apple could gain the upper hand with the carriers, it could attempt to reverse that trend specifically for iPhone users, even as users of other phones bear the brunt of network scale-downs.

Finally, Apple can get into the acquisition game in order to either eliminate iPhone 5 competitors or to envelop others’ technology into its own iOS platform. BlackBerry maker RIM is there for the taking, but it’s not clear what if anything RIM has to offer that Apple doesn’t already have. still, Apple has been known to buy dying companies (Lala for instance) simply to acquire the engineers who work there. But other companies such as smartphone parts suppliers could be acquired in order to ensure Apple has no trouble manufacturing enough iPhone 5 to meet whatever demand is created by Apple’s massive advertising investment. then again, surveys show that anywhere from one third to one half of the general public has already made up their mind to buy an iPhone 5, even before it’s been unveiled. it seems then that the most important thing Apple can do to drive iPhone 5 sales is simply to announce a release date. Here’s more on the iPhone 5.

Broke: iPhone 5 release date sees Apple richer than Treasury, ad blitz

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