Can't sync contacts from iMac Address Book to an iPhone 5 - please help

I'm trying to help a friend who got a new iPhone 5 sync his contacts from his iMac's Address Book to his iPhone 5. He is running Lion, and has lots of contacts in his Address Book app on his iMac.

I watched him doing this via screenshare on Skype (we can't get iMessages/iChat screenshare to work anymore, but that's another issue).

Anyway, he connected his iPhone 5 to his iMac running the latest iTunes, and after connecting we can see his iPhone 5 show up under devices in the sidebar of iTunes. In the iPhone 5 settings we even changed the name of the device to make sure it was the correct device and the new name is showing up in iTunes. So we are sure it is the right device connected.

In iTunes, under the device settings for his iPhone 5, in the Info tab, at the bottom, under Advance settings, we checked the box for Contacts and then Apply.

iTunes said it was syncing contacts and then finished.

However on the iPhone 5, under the Contacts app, there are "no contacts" after the sync is complete. We tried this several times.

This seems like it should be simple, but we can't get the contacts synced over.

What are we doing wrong?

Thanks,

doug