At his first major product launch since being crowned CEO, Tim cock ceded the critical iPhone presentation to another executive, and failed to generate the same level of excitement and buzz that predecessor Steve jobs was famous for.The new iPhone 4S is identical in form to the previous model, disappointing fans who had hoped for a thinner, bigger-screened design. Apple's shares fell as much as 5 percent, before recovering with the broader market to close down 0.6 percent.But analysts say the new device sported some new features, such as voice commands, to draw in consumers and is still going to be a big draw this holiday season, particularly as the phone is now available on Sprint's network in addition to AT&T and Verizon wireless.
The focus at Tuesday's iPhone 4S launch was on price. The oldest iPhone not to be discontinued, the 3GS, will now be free with a two-year contract. The iPhone 4 range will be reduced to just one model, with a mere 8GB of storage – the biggest 4S has 64GB – but will cost just $99 on a two year tie-in.
The changes to Apple's European smartphone market share for the first half of the year show why Cook needs a wider economic catchment. Samsung is gaining ground and fast. As Nokia committed hara-kiri by abandoning its Symbian operating system and letting its market share fall from over 40% in the first quarter of 2010 to 11% in the second quarter of 2011, research by analyst IDC shows that Apple did not benefit.its share of sales fell from 25% to 21%. Samsung's rose from 2.5% to overtake Apple, with 22%. HTC gained too, rising from 8% to 14%.The east Asia contenders have allied their manufacturing expertise with Google's programming power, using the Californian company's Android operating system in an alliance that has dominated sales of mid range smart phones.
While the iPhone 4S sports many of the features leaked in tech blogs before Tuesday, it lacked the "wow" factor that some were hoping for to sustain the popularity of the brand. In some ways, Apple may have been a victim of past success. Product launches by Jobs, now chairman, had been some of the hottest events on the tech calendar. The iPhone, which accounts for more than 40 percent of Apple's sales, has been a success since it came out in 2007, making Apple one of the world's top electronics companies. Cook said Apple has made significant inroads into the corporate market, with more than 90 percent of Fortune 500 companies testing or using its iPhones and iPads. The news sent shares of Blackberry maker RIM down nearly 3 percent at one point. Google shares finished 1.3 percent higher.
The iPhone 4S will cost $199 with pre-orders starting October 7. Apple also cut the price of the older iPhone 4 to $99, and said an even older "3GS" model will be available for free to customers who sign a long-term contract. That could help Apple expand into developing markets such as Asia, Samsung's backyard. And it might allow Apple to take a bite out of a low-end market it had eschewed. "Apple is hitting Nokia when it's vulnerable. How many billions of people in emerging markets would love to have an iPhone? These are a growing demographic," said YCMNet Advisors CEO Michael Yoshikami. Tuesday's iPhone event took place at Apple Central -- the same venue where the iPod was introduced years ago -- versus the larger, splashier venues of more recent choice, such as downtown San Francisco's Moscone center.
The event, though as usual choreographed to a tee, lacked the oomph and pizzazz of Apple events in years past and sorely missed the star power that Jobs brought to the unveilings. Heading into the event, many on Wall Street had questioned Cook's ability to lead the company as Jobs had. In terms of stage presence, Jobs was a tough act to follow. While it did little to alleviate concerns about whether the company would stay a creative force to be reckoned with without its founder and visionary at the helm, analysts say Tuesday's proceedings hinted at Apple's new team-based approach."What he did is let the team shine through," said Forrester Research analyst Frank Gillett. "What we may see is a somewhat different style, and frankly a healthy style that says: Look, this is a team that works together, there's a deep bench, it's not just one person."
Differences in the quality of the products are beginning to melt away. Microsoft has yet to launch its updated phone operating system, dubbed Mango, in a big way. It is awaiting new handsets from Nokia on which to show it off.
But as an early user, on an HTC handset, I believe it will raise the bar. Jobs used to rightly deride Microsoft products for poor aesthetics and clunky usability. Mango's graphic design, the deep integration of popular tools such as Facebook and Twitter, and its ease of navigation make the iPhone 4 look out of date.Sales of the iPod have already begun a double-digit decline. It is nearing the beginning of the end of its life cycle. Apple sold 20% fewer in its third quarter than in the same period last year.Cannibalising iPod Touch sales with a cheaper smartphone is a risk that must now be taken. While hardcore Apple addicts may be disappointed at the lack of a handset called iPhone 5, Cook has picked the right time to address a wider audience.
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