Apple unveils faster, more powerful iPhone 4S

Oct 04, 2011 By RACHEL METZ and JORDAN ROBERTSON , AP Technology Writers
Apple CEO Tim Cook gestures during the announcement at Apple headquarters in Cupertino, Calif., Tuesday, Oct. 4, 2011. (AP Photo/Paul Sakuma)

The most closely kept secret about the iPhone 5? There isn't one - yet. Apple unveiled a faster, more powerful version of its sleek iPhone on Tuesday and named it the 4S. It includes a futuristic, voice-activated personal assistant service and an app that will send greeting cards for $2.99 each. Sprint customers will now be able to use one.

Pre-orders will begin Friday with availability on Oct. 14.

But the new iPhone was not named the iPhone 5 or reimagined to the degree that many tech bloggers and Apple fans had hoped it would be. Wall Street seemed disappointed, too: Apple stock lost more than 5 percent before bouncing back to close down less than 1 percent.

Read: At a Glance: The iPhone 4S vs. older iPhones

Still, Apple stock has nearly quadrupled since the first iPhone was announced in 2007. The device has been the cornerstone of one of the most remarkable runs in technology history. Apple is now one of the world's most richly valued companies, holding its own against oil companies and international conglomerates.

If Tuesday's unveiling seemed like a letdown, it was because Apple didn't do a good job of managing expectations. That's a familiar problem for Apple, whose penchant for secrecy invites hyperbolic speculation between its product announcements. Given that it had been 16 months since the last iPhone hit the market, imaginations had even more time to run wild this time.

Apple CEO Tim Cook speaks at the event introducing the new iPhone 4s at the company's headquarters in Cupertino, California. The announcement marks the first time Cook introduces a new product since Apple co-founder Steve Jobs resigned in August.

"This is the typical Apple scenario: People keep wanting it to do the impossible," said Tim Bajarin, an analyst who has been following the company for decades.

Apple's approach to the event didn't do any favors for Tim Cook in his first major public appearance since he succeeded Steve Jobs as CEO six weeks ago. Jobs, the Apple visionary and co-founder, relinquished the reins to focus on his health problems.

As many people expected, Cook handled his presentation in a pedestrian fashion that lacked Jobs' flair. The format and stage setting were similar to the presentations that Jobs had orchestrated so masterfully, giving Cook little opportunity to make his own mark, said Adam Hanft, a marketing consultant who runs his own firm in New York.

"It wasn't fair to Tim in his inaugural because there he didn't have any product to show off that was a real barnburner," Hanft said.

"This allowed him to get his sea legs, but he still needs to find his voice and style. They need to come up with a new setting that is equally Apple-like aesthetically, but not the same that they had while Steve was there."

Even though the iPhone 4S is an improvement over its predecessor, it isn't being perceived as a breakthrough partly because it's not being branded as an iPhone 5 as most people had been expecting, said Prashant Malaviya, a marketing professor at Georgetown University.

Not all investors were disappointed.

Stephen Coleman, chief investment officer for Daedalus Capital and an Apple investor since 2004, calls his Apple stock "the safest investment that I own." He said Tuesday's upgrades were "incremental" - and praised Apple for not messing too much with a model that's working.

"To those who say they're underwhelmed, I'd say they've been fast asleep," Coleman said. "Anyone who's been paying attention at all would have to be dazzled by the product, and earnings."

He cited the run-up in Apple's stock price.

"What is there to lament? For people like me, it's peace on earth. This is one of the great economic stories of our time."

The new iPhone has an improved camera with a higher-resolution sensor. The processor is faster, which helps run smoother, more realistic action games. It's also a "world phone," which means that Verizon iPhones will be able to useable overseas, just as AT&T iPhones already are.

The fact that a more radical revision of the phone was a no-show leaves room for speculation that Apple will reveal a new model in less than a year, perhaps one equipped to take advantage of Verizon's and AT&T's new high-speed data networks.

There had also been speculation that Apple would include a chip that could talk to payment terminals at retail stores, turning the iPhone into a "mobile wallet." Competitors are starting to include this capability in their phones, though the payment systems are still immature. The iPhone 4S doesn't have this.

Apple is including a "personal assistant" application called Siri in the iPhone 4S. It responds to spoken questions and commands such as "Do I need an umbrella today?" It's an advanced version of speech-recognition apps found on other phones.

The new iPhone also comes with new mobile software that includes such features as the ability to sync content wirelessly, without having to plug the device to a Mac or Windows machine.

Cook said the latest iPhone, which came out in June 2010, sold more quickly than previous models, but the iPhone still has just 5 percent of the worldwide handset market. Apple is hoping to grow that with the new model.

Apple's new mobile software, iOS 5, will also be available on Oct. 12 for existing devices - the iPhone 4 and 3GS, both iPad models and later versions of the iPod Touch.

Apple said Oct. 12 will also mark the launch of its new iCloud service, which will store content such as music, documents, apps and photos on Apple's servers and let people access them wirelessly on numerous devices.

The new phone will come in black or white. It will cost $199 for a 16 gigabyte-version, $299 for 32 GB and $399 for 64 GB - all with a two-year service contract requirement. It will now be available through Sprint Nextel Corp., besides the existing carriers, AT&T Inc. and Verizon Wireless.

The previous version, iPhone 4, will now cost $99 for 8 GB. The 2009 model, the iPhone 3GS, will be given away for free with 8 GB. Both also require a two-year service contract.

Apple also touted the popularity of its products and unveiled a new line of iPods, including a Nano model with a multi-touch display that promises to be easier to navigate. Apple made no mention of its Classic model, which many people had speculated the company might discontinue.

The event took place in Apple's Town Hall room, where the first iPod was launched a decade ago. Cook said Apple has sold more than 300 million iPods worldwide so far, including 45 million in the 12 months through June.

The iPhone came six years later and has gained millions of fans, thanks to its slick looks, high-resolution screen and intuitive software. There were 39 million iPhones sold in the first six months of this year.

Bajarin, the longtime Apple watcher, is confident that Apple will quickly overcome the perception problem once technology reviewers get a better handle on all the new bells and whistles. He believes that the improved camera and speech-recognition technology are compelling enough additions to make the iPhone 4S another hit for Apple.

"People are going to get over their initial disappointment and want this phone," he said.

Apple's stock fell $2.10, or 0.6 percent, to close Tuesday at $372.50 after dropping earlier to $354.24.

Explore further: Chinese buyers lead charge in iPhone 6 global debut

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User comments : 16

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Nikola
2.8 / 5 (9) Oct 04, 2011
Yeah! New toys to put us further in debt! How did we ever live without it?
Nuffigus
4 / 5 (4) Oct 04, 2011
settle down.
physpuppy
3 / 5 (6) Oct 04, 2011
@Nikola: Simple word of advice:

If you can't afford it, don't buy it.

If you can't resist the temptation, get rid of your credit cards.
grosyhpgrosyhpgrosyhp
not rated yet Oct 04, 2011
I can afford it, but this fact don't change anything. Its a middling hi-tech toy with extremely good brand. Just like all other Apple products.
Baseline
4.2 / 5 (5) Oct 04, 2011
LoL sorry but you live in a country with a consumption based economy. The only way to make the economy grow is to spend money on things you don't really need.
emsquared
3.9 / 5 (7) Oct 04, 2011
iphone1 - 6/'07, iphone5 - 10/'11, a new "generation" every 11 months.

Who would have thought anything could have outpaced (or blown away) PCs for most rapid rate of planned-obsolescence?

It's as disgusting as it is amazing that people just continue to lap up this incremental improvement crap.

Do the people who buy these really not understand that they've been had (over and over)? That apple could have easily went from 1 to 5 (at least) in 1 developmental step, but knew they could get people to spend twice as much by releasing several minimally improved products in between? Or do they just not care?
tigger
1 / 5 (1) Oct 04, 2011
"F*** perpetual economic growth on a finite planet... this is the only F****** planet we have."

As said by Mark Esterhuysen who was sacked a week ago for speaking out http://www.youtub...9OO34Ld8
Graeme
not rated yet Oct 05, 2011
Well this story is being marked down, I hope it just represents Apple fan disappointment rather than a bad story.
Thex1138
2.3 / 5 (6) Oct 05, 2011
Do the people who buy these really not understand that they've been had (over and over)? That apple could have easily went from 1 to 5 (at least) in 1 developmental step, but knew they could get people to spend twice as much by releasing several minimally improved products in between? Or do they just not care?


I guess you missed the point that technology evolves and improves over time... that's how it works dude...
You think duel/quad core CPU's just get magically created from silicon?
It takes research, testing, factory tooling, testing... just to get a prototype!...

The failure was the PC manufactures stopped being creative, stopped consolidating, integrating, researching... all they did was make a faster CPU, board, ram... etc,. No innovation there kid.
Husky
5 / 5 (1) Oct 05, 2011
got the milk the cow slowly or it will go sour
Ricochet
not rated yet Oct 05, 2011
Yes, especially with Apple, who doesn't have anyone to compete with. That's why they're so expensive. They have no competition. They've seen to that, unlike the PC and Android market, where competitive prices drive the technology forward and allow free enterprise to prove its point over and over again.
emsquared
not rated yet Oct 05, 2011
I guess you missed the point that technology evolves and improves over time... that's how it works dude...
...
The failure was the PC manufactures stopped being creative, stopped consolidating, integrating, researching... all they did was make a faster CPU, board, ram... etc,. No innovation there kid.

I'm not convinced you know what I (or you) was talking about.

What I am saying is: they had the technology to do what they have done with the 4S at the time they made the 3G (yes, 4G technology has been around since 2006). Technology must evolve, yes. But everything was there, the platform hasn't changed there just putting on a new bell or whistle and getting you to cough up another $300 for it. They know our consumer society always must have the latest and greatest, so if they roll out a new model year after year, despite it being no great improvement, people will keep spending year after year.

You've been trolled by Apple.
Noumenon
4.9 / 5 (47) Oct 05, 2011
RIP Steve. :(
nayTall
5 / 5 (2) Oct 06, 2011
you guys are missing the point: the high majority of people wait until their contracts are up before getting any 'update' to the iPhone - whatever iteration happens to be around at that time. you're argument lies in a false, imaginary scenario. of the hundreds of people i know with apple products, not ONE of them buy the latest version. you spend too much time on comment threads.
Ricochet
not rated yet Oct 07, 2011
It doesn't matter that 4G technology has been around since 2006... the problem is that the carriers have to upgrade their infrastructure to supply the service, usually, and that's what takes so long to implement new consumer technologies.
kochevnik
not rated yet Oct 08, 2011
Connecting like minds interactively regardless of distance was priceless. The post, the telegraph, the phone and photon sharing were revolutions. The iPhone is an obsession pursued by the very same people the aforementioned technologies were envisioned to circumvent: The holes in the Swiss cheese.