Dealers claim “warmed-up iPhone 4” will dent Apple’s 25 per cent market share as company reveals pre-orders topped one million in first day
The launch of Apple’s latest iPhone 4S last week was met by disappointment from dealers and analysts, with some saying the manufacturer has given its rivals a chance to claw back market share.
Following the announcement, held at Apple headquarters in California, dealers claimed Apple’s decision to launch an updated version of the iPhone 4 and not, as widely expected, a new model in the iPhone 5, will test the patience of customers.
The iPhone 4S is an improvement on the iPhone 4, sporting an A5 dual-core processor that provides additional features such as face detection, an eight-megapixel camera, HD video capture and offers eight hours of talk time on 3G or 14 hours of 2G talk time.
It also runs Apple’s latest operating system, iOS 5, which can be downloaded to previous models, the iPhone 4 and the iPhone 3GS.
Hope for rivals
As a result, the feeling within the industry is manufacturers such as Samsung, HTC and BlackBerry will be able to win back market share from Apple, which is said to have about 25 per cent in the UK contract market.
Vodafone dealer Next Communications MD Mark Finlayson commented: “My feeling is mild disappointment, because for the first time in a while Apple has failed to do anything revolutionary. But then perhaps there’s nothing left to do.
“This decision by Apple does give BlackBerry, HTC and Samsung the chance to continue to erode Apple’s market share by offering products with comparable services, but with lower prices and lower warranties.”
Edinburgh-based Vodafone platinum partner Veecom Systems managing director Nick Gould said he was “struggling to get excited” about the launch of the new device and described it as “a bit dull” when compared to other devices on offer.
Informa Telecoms and Media principal analyst David McQueen added: “Whilst Apple announced improvements in the hardware performance and on the service layer, it has been let down somewhat by having almost no change in the user experience and in the industrial design.
“Unfortunately for Apple, this is happening at a time when competitors are aggressively bringing new products to market with superior user experience, in the form of wider and better screens, intuitive UIs, and more integrated apps.
“As a result, iPhone 4S could be the first disappointing device since the launch of the brand.”
Too much hype?
Ovum chief analyst Jan Dawson said he felt Apple had become a victim of the hype surrounding its strategy to keep products under wraps until the day of launch.
Dawson said the intensity of the rumours that circulated in the run-up of the launch meant it was unsurprising the iPhone 4S was met by disappointment.
“Though the announcement was relatively meaty in terms of hardware, Apple has been a victim of the hype that surrounds all its announcements. With so many false rumours about what it would announce, it was almost inevitable that the announcement itself would disappoint.
“The hardware upgrades should improve performance considerably and keep the phone competitive with the latest Android and Windows Phone devices, but none will blow users away.”
Apple also announced during the event that previous models, the iPhone 3GS, and iPhone 4, will continue to be sold, but at a lower price.
Prices in the US for the device have been confirmed, with the 3G S now free on a 24-month contract, and the iPhone 4 8GB version $99 (£64) on the same deal.
20:20 Mobile marketing and purchasing director Andrew Peat said the repositioning of the 3GS as a more affordable handset was the main focus of Apple’s latest announcement.
“The real story is not so much about the iPhone 4S, which is largely an upgrade of the existing product with some features, which brings it more in line with devices, such as Samsung and HTC, it’s about the repositioning of 3GS,” Peat said.
“Apple has managed to gain 25 per cent of the contract market with essentially a couple of high-end devices so far. A significant price move on the 3GS will mean that it opens Apple up to a whole new audience, and that will take the market-share battle right into Android and the full RIM portfolio.”
All UK operators have confirmed they will stock the new device at launch on October 14.
However, Apple announced on October 10 that pre-orders for the iPhone 4S had topped one million in 24 hours, surpassing the previous single day pre-order record of 600,000 held by the iPhone 4.
Apple senior vice president of worldwide product marketing Philip Schiller said the company was “blown away with the incredible response to iPhone 4S”.