This holiday season, Apple Inc would have to prove it’s what’s on the inside that matters most. With its latest iPhone 4S, Apple didn’t tinker with the outside of the device, focusing instead on improving the processor, camera and software interface. The challenge would be persuading shoppers to upgrade to a new product that looks exactly like their old one.
Chief executive officer Tim Cook, in his first major product release since taking over for Steve Jobs, is counting on faster speed, voice recognition and the iCloud storage service to make the iPhone a success. The device, Apple’s best-selling product, will face off against an army of fresh smartphones running Google Inc’s Android, including Samsung Electronics Co’s Galaxy S II and LG Electronics Inc’s Thrill 4G.
Apple “didn’t quite understand how revved up expectations had gotten,” said Frank Gillett, an analyst at Cambridge, Massachusetts-based Forrester Research Inc. Some users were looking for a more revolutionary iPhone 5, rather than just a faster iPhone 4, he said. Instead, “Apple is asking people to appreciate and give them credit for a highly engineered and integrated set of products and services.”
JOBS ABSENT
Cook also has to promote the new iPhone without as much day-to-day assistance from Jobs, whose expertise in marketing and design helped turn Apple into the world’s most valuable technology company. Jobs, who switched from CEO to chairman on August 24, didn’t appear at the unveiling of the iPhone 4S yesterday. The 56-year-old has taken three medical leaves over the past seven years amid a battle with a rare form of cancer.
The success of the iPhone has helped Apple weather market turmoil and the resignation of Jobs, with the shares gaining 15 per cent this year on the Nasdaq Stock Market. In yesterday’s trading, Apple fell $2.10, or less than one per cent, to $372.50. The stock slid 0.5 per cent to the equivalent of $370.57 as of 10:03 am in German trading.
Apple touted the inside changes to the iPhone 4S at yesterday’s event, held at its headquarters in Cupertino, California. The A5 chip would make graphics seven times speedier and deliver twice the processing power. The model will cost $199, $299 and $399, depending on features, and will be available from Sprint Nextel Corp for the first time. Apple already had agreements with AT&T Inc and Verizon Wireless.
MOTOROLA DEAL
“Inside, it is all new,” said Phil Schiller, a senior vice-president in charge of product marketing.
At stake is leadership in the market for smartphones, which is projected to double by 2015, according to IDC. A billion handsets would be sold that year, the research firm estimates. While the iPhone is the world’s most popular smartphone, the Android operating system is more widely used by the industry.
Google aims to bolster that position by purchasing its own mobile-phone manufacturer, Motorola Mobility Holdings Inc. A full redesign under the iPhone 5 banner, along with a revamped iPhone 4, would have given Apple more ammunition to use against Google and its Android partners. Even so, Apple benefits from more efficient manufacturing by keeping the same body design, Gillett said.
“One thing people don’t understand about Apple is they don’t just change the look for the heck of it,” he said. “They think about it for a very long time.”
The iPhone 4S, available from October 14, would have a camera that has 60 per cent more pixels and can shoot high-definition video. The device also relies on an “intelligent antenna system” that’s designed to improve call quality and works with both CDMA and GSM wireless standards. Users would have up to eight hours of talk time on one charge.
