Analysts lukewarm on Apple's iPhone 4S

The iPhone 4S got a mixed reaction from Wall Street analysts, but that may only mean Apple has low expectations to hurdle.
Written by Larry Dignan, Contributor

Wall Street analysts weighed in on Apple's iPhone 4S launch as a "mildly disappointing," but acknowledged the device will be a big hit.

Like the tech blogs, the reaction to the iPhone 4S was decidedly mixed. The major gripes were that Apple didn't release and iPhone 5 even though few analysts noted what they'd want from such a device. The lack of 4G was an issue for many.

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Here's a roundup of analyst comments:

Sterne Agee analyst Shaw Wu:

Overall, there may be mild disappointment as many were expecting an “iPhone 5” with a slightly larger touchscreen and slimmer form factor. But the reality is that iPhone 4S improves on the already top-selling iPhone 4 with a dual-core processor, much better graphics, more powerful camera, longer battery life, 4G speeds, and Siri voice recognition. The initial negative reaction to iPhone 4S reminds us of the launch of iPhone 4. We want to remind people that very few (if any) predicted the iPhone 4 would be successful.

Atlantic Equities analyst James Cordwell:

It is also worth highlighting how competitive Apple now is at the lower end of the market, with the iPhone 4 now just $99 and the 3GS available for free. We see this as an important incremental growth driver given the potential of smartphone mid-market and the momentum Android has there.

JMP Securities analyst Alex Gauna:

We couldn't help but come away with the impression that the advances, launch forum and presentations lacked much of the panache seen in the past. This could heighten investor anxieties around how the company will operate without visionary leader Steve Jobs at the helm as well as leave the door open for Android to continue gaining worldwide market share at a faster pace.

Jefferies analyst Peter Misek:

Apple took the wraps off of the iPhone 4S, the phone we originally thought was going to launch but then we (like the rest of the Street) got our hopes up for a redesigned iPhone 5. Our view of Apple has not changed and we believe that the changes underneath the surface are sufficient to cause many current iPhone 3 and 3GS owners to upgrade and that the lower-priced 3GS will drive significant volumes in emerging and pre-paid markets.

Morgan Stanley analyst Katy Huberty:

We are buyers on any sell-off post today's iPhone announcement: Investor expectations were high heading into the event and Apple did not meet some of them, e.g., multiple new phones. However, the market tends to forget that software is what differentiates Apple from the competition, and that was the case again today with iOS 5, which featured Siri intelligent assistant and iCloud content management.

Deutsche Bank analyst Chris Whitmore:

Siri is a game changing technology and extends Apple’s software lead. Siri is available only on iPhone 4S and allows users to send messages, schedule meetings, complete internet searches, etc. using simple conversational voice commands. We expect this feature to be a killer app and drive upgrades for many early adopters.

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