October 5th, 2011

Three reasons Apple launched the iPhone 4S and not the iPhone 5

Apple’s share price briefly dropped by almost 5% in response to the launch of the iPhone 4S – or more specifically the non-appearance of the iPhone 5.

However, even though the iPhone 4S looks no different to the iPhone 4, according to Apple “it is entirely new from the inside”.

It includes the faster A5 processor, a battery with a longer life and a “world phone” chip to make it work on both CDMA, widely used in America, and GSM, which dominates in Europe.  A new antennae design allows file transfers at speeds comparable with 4G, not to mention better voice call reception, and a 8 megapixel camera with 1080p HD video recording capabilities.

But perhaps the biggest selling point of the iPhone 4S is the inclusion of the Siri “personal assistant” – or voice-activated Artificial Intelligence software – which can be used to access information or accomplish tasks such as entering appointments, providing weather reports, reading and sending texts or finding the nearest restaurant in response to a user’s spoken request.

“iPhone 4S plus iOS 5 plus iCloud is a breakthrough combination that makes the iPhone 4S the best iPhone ever. While our competitors try to imitate iPhone with a checklist of features, only iPhone can deliver these breakthrough innovations that work seamlessly together.” Philip Schiller, Apple’s senior vice president of Worldwide Product Marketing


Yet, despite the new features, the initial response was one of disappointment. Given that expectations had been heightened by the delay in launching a successor to the iPhone 4 this was hardly a surprise. So, why did Apple launch the iPhone 4S rather than the iPhone 5?

Here are three reasons worth considering:

 1. Apple focused on the iPhone for ‘the rest of us’

Fact: More people are buying Android-based smartphones than iPhones.

According to recent estimates from comScore, Android’s U.S. market share is 41.8% compared to Apple’s 27%. In Europe, it’s 22.3% for Android and 20.3% for iPhone. Worldwide, some analysts estimate that Android is closing in on 50% of the smartphone market

Whilst the iPhone is way ahead when it comes to profitability – it captured over 65% of mobile phone profits in Q2 2011 – Apple can’t afford to ignore the growth in Android uptake, particularly in countries with enormous potential, such as China and India. And whilst there is more than one challenge for Apple to overcome to compete effectively in these markets – for example, technology in India and carrier relationships in China – perhaps the biggest is price.

It was no coincidence that Tim Cook, Apple’s CEO, started the iPhone 4S launch by talking about the opening of new retail stores in Hong Kong and Shanghai, and explaining that 100,000 people visited the Shanghai store on its opening weekend. It took Apple’s L.A. store a month to reach the same number.

But whilst there appears to be an abundance of eager consumers in China, the iPhone can cost more there than it does in the U.S.

In India – the second largest telecom market after China – Apple accounted for just 2.6% of India’s smartphone shipments in a market with 602 million subscribers, according to a recent Bloomberg report. Currently, Apple ships more iPhones to Norway, Belgium and Israel.

Here too, amongst other issues, price is a concern.

In truth, price is not just an issue in those markets. Apple has been competing in most countries against a range of Android-based devices with a far greater spread of price points, as well as cheaper devices from RIM and Nokia.

Apple’s challenge is to provide broader access to its iPhone through a greater range of price points without diluting its high-end brand caché. Retaining the iPhone 4 and 3GS whilst lowering their price allows Apple to offer more affordable iPhones without creating a sub-standard iPhone. At the same time, Apple hopes, the new iPhone 4S, will do enough to appeal to high-end users who would have upgraded anyway.

2. Apple focused on converting more of us to more of Apple

Apple has long understood the value of capitalising on the interest in iOS devices – first the iPod and now the iPhone and iPad – to attract users away from windows based PCs to Apple Macs. Again, it was no coincidence that Tim Cook spoke about the success of the latest Mac OS, Lion, and the Mac range, during the iPhone 4S launch event.

Apple has been beavering away making ready its cloud-sync service – the iCloud. To some extent Apple is playing catch-up with Google and Microsoft in the cloud-sync space, as well as protecting its position as an entertainment hub against Amazon.

But, part of its appeal surely lies in showing off the benefits of seamless integration between Apple products and in the process selling more Macs – if iCloud is launched successfully.

There will be some nervousness and a great deal of resource and effort focused on getting iCloud right, given that the fiasco that was the launch of Apple’s MobileMe – Apple’s previous foray into this area – is still not yet a dim and distant memory.

3. Apple focused on getting it right

Apple is at its best when bringing high-end products to the mass market. It is rarely first but often delivers the solution that sets the benchmark. And if it feels that dependant technologies aren’t yet ready, it has been known to delay their inclusion – 3G and, if the rumours are correct, NFC being two examples.

It may well be that the iPhone 5 has been in parallel development. But, if Apple lacked confidence in critical technologies coming together to provide a superb user experience, it would true of the culture at Apple to leave them on the lab shelf, irrespective of the expectations of users or the financial analysts. Apple is best at putting best before first.

Perhaps that’s what Tim Cook was referring to in his closing remarks when he said, “Only Apple could make such amazing hardware, software and services and bring them together into this experience. I am so incredibly proud of this company.”


iPhone 4S – The ‘small print’

Processor and battery
• A dual-core A5 chip delivers twice the processing power of the iPhone 4 and crisp graphics
• A battery life of eight hours of talk time on a 3G network or 14 hours on a 2G network.
• It can browse the internet on Wi-Fi for up to nine hours and via 3G for six hours.

• The 8MP sensor has 60% more pixels than iPhone 4
• New custom lens, a larger f/2.4 aperture and an advanced hybrid IR filter
• 1080p HD resolution video recording

iOS 5
• Available to download to existing iPhone 4 and 3GS handsets on 12 October
• More than 200 new features including Notification centre, a way to view and manage notifications in one place
• iMessage, a new messaging service that lets you send text messages, photos and videos between all iOS 5 users
• iCloud, lets users automatically and wirelessly store content (ie music, films, TV shows and photographs) in iCloud and push it to all devices

• iPhone 4S will be available in black and white in three price/memory bands
• $199 (US) for the 16GB model
• $299 (US) for the 32GB model
• $399 (US) for the new 64GB model
• Available from 14 October
• UK and Ireland prices have not been announced
• iPhone 4 (8G) available for $99 (US)
• iPhone 3GS (8G) available for free with two-year contract

• Available 14 October in the US, UK, Canada, Australia, France, Germany and Japan
• In the US, it will be available on Sprint Nextel Corp, as well as the existing carriers AT&T and Verizon Wireless
• All five of the UK’s mobile networks will offer the handsets under contract
• By the end of the year, the 4S will be available in 70 countries on 100 carriers


1 comment to Three reasons Apple launched the iPhone 4S and not the iPhone 5

  • Heb deze pagina gevonden via Google en dit was precies wat ik zocht. Heb het gelijk doorgestuurd naar een vriend, hij was hiernaar opzoek! Mooie site trouwens!

Leave a Reply