Apple's iPhone 4S vital to keep rivals at bay

Cupertino's newest handset, essentially an iPhone 4 with better components including processor, camera and memory, will help it compete better with Android and Windows Phone but nothing to "blow customers away", analyst notes.
Written by Kevin Kwang, Contributor

Apple on early Wednesday finally introduced its latest handset, called the iPhone 4S, which is an incremental upgrade over its predecessor with better hardware components, such as processor, camera and memory. One analyst said the release will help the company compete better with Google's Android and Microsoft's Windows Phone but its enhancements will not "blow users away".

Cupertino revealed in its press release that iPhone 4S's enhanced features include the addition of its dual-core A5 chip, which promises to speed graphics up by about seven times while the new camera has an eight-megapixel sensor with 60 percent more pixels.

In terms of availability, the device will start shipping to the United States, Australia, Canada, France Germany, Japan and the United Kingdom on Oct. 14. Another 22 countries--Singapore, Austria, Spain and Sweden, among others--can expect to see the device on their shores by end-October, the company stated.

According to Singapore's broadsheet Straits Times, the iPhone 4S will be available on Oct. 28 and all three local telcos will be retailing the device, although prices and availability were not confirmed. Apple did not confirm Singapore's arrival date when contacted.

Its pricing strategy has not changed with the exception of a 64-gigabyte model that will retail for US$399 with a two-year service contract, it added. The iPhone 4 will now retail at US$99 while the iPhone 3GS will be available for free with a two-year contract.

The company also revealed that its iOS 5 operating system comes with over 200 new features, including iMessage and the revamped Notification Center. The new OS will come prepackaged with iPhone 4S while existing iPhone, iPad and iPod users will receive it as a free software update via iTunes on Oct. 12.

Apple's cloud service, iCloud, was also unveiled as a "breakthrough set of free cloud services" including iTunes, Photo Stream and Documents all delivered remotely and touted to work seamlessly on all Apple's devices.

"iPhone 4S plus iOS 5 plus iCloud is a breakthrough combination that makes the device the best iPhone ever," said Philip Schiller, Apple's senior vice president of worldwide product marketing, in a press statement. "While our competitors try to imitate iPhone with a checklist of features, only iPhone can deliver these innovations that work seamlessly together."

Important, but not mind-blowing
Jan Dawson, chief telecoms analyst at Ovum, said the announcements made by Apple were "relatively meaty" in terms of hardware but the launch was bound to disappoint as it has been a "victim of the hype" since an iPhone 5 had been widely expected by the industry and consumers alike.

He added in his event analysis that the hardware upgrades should improve performance considerably and keep the phone competitive with the latest Android and Windows Phone devices, but none of the features "will blow users away".

"This represents a significant upgrade for iPhone 3GS owners, but many iPhone 4 owners will be content to stick with what they've got until something less incremental comes along, especially as many will not yet be eligible for subsidized upgrades from their carriers," Dawson pointed out.

As for the decision to make its iPhone 3GS device available for free with many carriers, the Ovum analyst said this now represents Apple's low-cost strategy for emerging markets and smartphone laggards instead of creating a new lower-functionality, lower-cost device.

"For a company which prides itself on the quality of its products, this strategy has always made more sense than producing a new, sub-standard device for such markets," Dawson said. "This should also keep iPhone shipment numbers growing as ever more first-time iPhone users join the back of the ranks while the vanguard upgrades to the latest and greatest."

YCMNet Advisors CEO Michael Yoshikami also noted in a Reuters report on Tuesday that this move would help expand Apple's share in developing as well as lower-end Asian markets.

"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," he stated.

Gartner had reported in August that Nokia continues to hold the lead in terms of mobile device market share, with 22.8 percent in the second quarter of this year, but it reflected a 7.5 percent dip year-on-year. Comparatively, Apple is fourth with 4.6 percent, an earlier report noted.

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