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Apple’s iPhone 4S Opens the Door for Competitors: Analyst


Shares of Apple (AAPL) took a brief nosedive this afternoon, down over 5% after the much-hyped "Let's Talk iPhone" event at the company's headquarters in Cupertino, CA. The world was awaiting an iPhone 5, and instead met the iPhone 4S - a souped up version of the latest model released more than a year ago. Apple shares did recover nearly all losses before the close, but consumers may not snap back as quickly.

"It's certainly a disappointment given the fact that people were looking for a new iteration to be number 5 in this case," says David Garrity, principal at GVA Research. "So much speculation had been built up around this, for us not to get that, in and of itself, would be a disappointment."

In his first product launch as new CEO, Tim Cook used typical Steve Jobs-style spending time (an hour-and-a-half) boasting the success of Apple's products. Cook, rightfully so, bragged about the OSX Lion adoption, mac sales, iCloud, iPods, iPads, and when he finally got to iPhone, hit on three impressive stats:

*Half of all iPhone sales in history are iPhone 4 sales.

*iPhones now account for 5% of all mobile phone sales.

*93% of Fortune 500 companies are testing the iPhone.

And unlike his predecessor we've come know so well, Cook never pulled the anticipated rabbit out of his hat. But "there are, granted, new technologies in the 4S, and the 'S' we can imagine, refers to speed," Garrity says.

The speed indeed can be found inside the new smartphone, which looks exactly like its predecessor, and will be available in black and white models. The iPhone 4S will run on the same A5 chip used in the iPad 2, giving it laptop power in a handheld device. And speaking of power, the battery will enable eight hours of 3G talk time and nine hours of Wi-Fi internet use. It will cost $199 for a 16 gigabyte-version, $299 for 32GB, and $399 for 64GB, all requiring a two-year service contract with AT&T (T), Verizon (VZ), or Sprint (S).

Other user enhancements include a new antenna system maximizing reception quality, GSM and CDMA networks enabling better usage abroad, an 8 megapixel camera and 1080p HD video capture, and new voice-recognition technology, Siri.

So is it enough to draw in new buyers, appease Apple fanatics, and satisfy tech analysts like David Garrity?

"The bottom line for Apple here is the fact that they're taking as long as they are to come out with their new iteration provides an opening, if you will, for other competitors," says Garrity. "Unless we see something come out of Apple within six months, people may start to look at Android as being a more innovation platform than Apple is with respect to the smartphone."

Will you buy an iPhone 4S, or hold onto your current smartphone? Did the Apple product reveal disappoint? Let us know in the comment section below.