Apple (NASDAQ:AAPL) took the wraps off the iPhone 4S, the fifth incarnation of its popular smartphone, and added Sprint Nextel (NYSE:S) to its list of U.S. carrier partners, potentially giving a leg up to the nation's No. 3 carrier. Verizon Wireless (NYSE:VZ) and AT&T Mobility (NYSE:T) will also launch the iPhone 4S.
Click here for a photo tour through the iPhone 4S.
Apple CEO Tim Cook made the announcement as part of the unveiling of the iPhone 4S at a media event at the company's headquarters in Cupertino, Calif. The iPhone 4S will support both GSM and CDMA networks (but not LTE or WiMAX networks) and will be available Oct. 14 in the United States. The device will come in three variants, a 16 GB model for $199, a 32 GB model for $299 and, for the first time, a 64 GB model for $399, all with two-year contracts.
The announcement means that T-Mobile USA, which AT&T is trying to acquire, is the only Tier 1 U.S. carrier that will not carry the iPhone. Apple also said an 8 GB iPhone 4 will be available for $99 with a two-year contract to Verizon, AT&T and Sprint subscribers and that the iPhone 3GS will be free with a two-year contract to AT&T customers.
In conjunction with the iPhone 4S, Apple also unveiled its new voice-recognition software, Siri, which it acquired in 2010. The Siri technology enables iOS device users to employ natural spoken language to access and perform device tasks like mobile search, messaging and contacts. Phil Schiller, Apple's senior vice president of worldwide product marketing, described Siri as an "intelligent assistant that helps you get things done just by asking," while Scott Forstall, senior vice president of iOS software, demonstrated the service by asking Siri about the weather, to which a computer-generated voice replied "Here is the weather for today." Siri also supplied information about the current time in Paris, today's Nasdaq performance and recommended Greek restaurants in the Palo Alto area. (Click here for details on Siri.)
Apple also said it will release an iOS app that will allow users to find other users who opt-in to the service. The offering stands as an alternative to similar friend- and family-tracking services from the likes of Google (NASDAQ:GOOG), Sprint and AT&T. (Click here for details on Find My Friends).
Apple also unveiled Cards, a free iOS application enabling users to design personalized greeting cards via iPhone. Once the card is completed, Apple will print it, address it and mail it, even offering USPS delivery tracking on cards mailed within the U.S. Apple also will send users a push notification when their card arrives at its destination. (Click here for details on Cards)
While some analysts and observers had been expecting a wholesale makeover for the iPhone, others were less surprised by the modest hardware changes, and the announcement was akin to when Apple introduced the iPhone 3GS in 2009 to replace the iPhone 3G. The iPhone 4S sports a dual-core Apple A5 processor, an 8-megapixel camera with advanced optics and full 1080p HD resolution video recording. (Click here to see how the iPhone 4S stacks up against the competition.) Additionally, in a bid to try and avoid the "antenna-gate" issues that plagued the iPhone 4 last year, Apple said that the device will be able to now intelligently switch between the antennas for even better call quality.
Click here to see how the iPhone 4S stacks up against the competition.
Analysts were divided over what the impact of the new device would be. CCS Insight analyst John Jackson said the device is essentially a refresh, but that a more important factor could be Apple's decision to lower the prices of the iPhone 3GS and iPhone 4. "They have put themselves in a position to grow the base of iOS users without incurring all of the massive nonrecurring engineering costs associated with developing a fundamentally new product," he said.
According to data from The Nielsen Company, in August Google's Android platform captured 43 percent of the U.S. smartphone market and iOS captured 28 percent, while Research In Motion's (NASDAQ:RIMM) BlackBerry had 18 percent.
Some analysts thought that Sprint getting the iPhone would be a boon to the carrier, which has struggled with postpaid subscriber losses. Sprint, unlike AT&T and Verizon, still offers unlimited smartphone data plans. ABI Research analyst Kevin Burden said in the near term he expects Sprint to hammer AT&T and Verizon on that point in marketing to attract subscribers, but said Sprint will eventually have to drop unlimited data plans.
"Is it six months, a year?" he said. "Most likely it will happen because it's kind of the way things are going to go."
Gartner analyst Michael Gartenberg said getting the iPhone 4S is "a great deal" for Sprint and that the most obvious losers are T-Mobile and all other carriers still without the iPhone.
However, he noted that "there are still customers for whom the carrier is the most important choice who won't switch on the basis of any particular phone."
- see this release
- see this Apple site
- see this WSJ article (sub. req.)
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