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iPhone 5's new design thrills Apple's partners, but will cost users

iPhone 5's new design thrills Apple's partners, but will cost users

By Brian X Chen, The New York Times | Updated: 13 September 2012 15:39 IST

The iPhone 5 has plenty of new features to keep Apple fans happy. But there is one feature Apple unveiled on Wednesday that is likely to annoy many: a new connector on the phone's base.

The Lightning port, as Apple calls it, is smaller and shaped differently from the old one, instantly rendering obsolete the millions of spare charging cords, docks and iPhone-ready clock radios that its customers have accumulated over the years.

While irritating to some, the Lightning connector could be a boon to the hundreds of companies that sell accessories for iPhones and iPads.

"Apple is testing the patience of its fans," said Tero Kuittinen, an independent analyst and a vice president of Alekstra, a company that helps customers manage cellphone costs.

"A lot of Apple fans have a lot of different accessories and use the old systems, so this is going to be a fairly expensive shift for a lot of them," Mr. Kuittinen said. Makers of iPhone accessories are likely to be ecstatic, he added.

Apple, which is selling Lightning cables and $30 adapters that will connect the new phones to many but not all older accessories, is, of course, poised to profit from the design change as well. Apple said the smaller connector allowed it to make the phone thinner and use space inside the device more efficiently.

Accessories for Apple products are already a vast and lucrative business. In the last year,iPad, iPod and iPhone add-ons, including speakers, cases and power chargers, generated $2 billion in sales in the United States alone, according to the NPD Group, a research firm.

To stay on top of the market and avoid building products that will soon be out of date, accessory makers have to watch Apple as attentively as any technology journalist or analyst. Apple, which is known for its culture of secrecy, generally keeps accessory makers in the dark before it unveils its new hardware. The companies rely instead on leaks from Apple's manufacturing partners in Asia, or on rumors about the devices that surface on Apple-focused blogs. On the day of an Apple hardware announcement, they watch reports of the event and wait for data sheets to come from Apple with details on the devices before they crank up manufacturing in China.

Griffin Technology, a company in Nashville that makes Apple accessories, said that moments after Apple introduced the iPhone 5, its employees were making final design tweaks in its prototyping shop, where 3-D printers turn out mock-ups of future products. Many Griffin employees had already traveled to China from the United States to be there when the iPhone 5 was introduced.

"Kind of like everyone else, we're at the same starting line in the race to the peg," said Mark Rowan, Griffin's president.

Similarly, employees of Incase, a maker of iPhone cases based in San Francisco, crowded into a conference room to watch online reports of Apple's presentation, said Dave Gatto, the chief executive. Employees in China were waiting at factories for final design specifications so they could start making cases.

Occasionally a rare few in the business get a peek at an Apple prototype, according to Jeremy Horwitz, editor in chief of iLounge, a Web site that reviews Apple accessories. Much as some software developers get to use a new Apple product in advance so they can have software ready to show off on Apple's stage, he said, some accessory makers have had access to Apple devices before their unveiling. Mr. Horwitz said these devices were typically locked down to prevent theft or leaks.

Some companies take unsanctioned routes to get ahead of the game. Hard Candy Cases, a case maker, sent iPhone 5 cases to journalists before Apple even introduced the phone. Tim Hickman, chief executive of the company, said manufacturers in Shenzhen, where his cases are made, sent around design information for unreleased iPhones to attract case makers like himself.

"The factories have gone from, 'Shhh, hey, buddy, look at what I have for you,' to making it part of their presentation," he said.

Mr. Hickman said he did not buy information from leakers in Asia. Instead, he said, he made a deal with a factory that had told him it could make cases for the iPhone 5 and asked him to send designs that it would then modify to fit the new phone. He said his iPhone 5 cases for sale to customers would arrive in the United States in about three days.

IHome, a New York company that is one of the biggest makers of iPhone clock radios and other Apple audio accessories, tries to plan for Apple's announcements but does not assume anything is fact until the company unveils its new hardware, said Ezra S. Ashkenazi, its chief executive. He called the Lightning change "a unique circumstance" because it was the first time Apple had changed the connector since it was introduced.

There are already iPhone clock radios made by iHome and other companies in hotel rooms around the world. Kathy Duffy, director of public relations for the Marriott hotels in New York, said that if many patrons seemed to be getting the iPhone 5, the company would probably stock up on adapters or buy new accessories. "We'd have to evaluate it and see what the demand is," she said.

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