Did Apple stumble by releasing the iPhone 4S instead of an iPhone5?

Today Apple unveiled its latest version of the iPhone – the iPhone 4S - that will go on sale on October 14th in the US.

But a nagging question surfaced after the big “reveal”:  did Apple take a huge gamble by releasing an upgraded iPhone 4 that runs on a 3G network instead of the much anticipated iPhone 5 for 4G network?

I think so.  So do many others.  Apple’s stock price fell 5% after the unveiling of the latest iPhone (but rebounded slightly by the end of closing today).

An (alleged) innovator Apple brought glamour to the smart-phone category with the initial introduction of the iPhone in January of 2007.  Before then, smart-phones were mostly used by frantic businessmen on the go or by geeks for nerdy multi-tasking, and were seen as functional in a clinical way.

With the release of the iPhone there came the combination of not only a mobile phone and Personal Digital Assistant (PDA), but the dazzle of an MP3 player for your favorite tunes, applications for games, GPS functions, entertainment, etc.  Apple definitely stepped up the game amongst smart-phone manufacturers, and although the battle for the number one spot has been fierce, Apple always ended on top with new releases every 8 months or so.

Then internet juggernaut Google entered the race with their Linux-based Android platform and the market has not been the same since.  And Apple – despite its large number of rabid followers – should be very, very afraid.

Here’s a few reasons why:

• Since its introduction in 2008 Android has fast become the preferred Operating System for mobile phones mainly because Android based phones are fast, user friendly, and, more importantly when compared against the iPhone – very affordable.  While Apple paranoidly clings to its proprietary iOS, other smart-phone manufacturers are cutting production costs by embracing Android technology which is provided to them by Google at the lowest cost possible – FREE.  

• Although the iPhone by itself currently holds the largest share of the smart-phone market, its overall market share drops dramatically (18%) when compared against the market share of all Android based smart-phones (43%).  And Apple’s share of the global mobile phone market is only 5% when matched against global mobile phone giants such as Nokia, Samsung, LG and others – others willing to use Android over Apple’s iOS.  Because of this Android’s market share is growing three times faster than Apple.  

• The yet-to-be-released iPhone 4S is basically a tweaked clunky iPhone 4 with a newer camera and upgraded 3.5 inch screen, a fused battery and available in either 16GB, 32GB and 64G models (the price dramatically increases per gigabyte).  Hold up that iPhone against currently available Android-based slim-body phones with large 4.3 in touch-screens, upgradable memory via flexible MicroSD cards slots and replaceable long-life batteries and the iPhone begins to look like a relic from the last decade - literally.  

The final flaw in the new iPhone is it’s connection speed.  Android phones are have been available for use on the screaming-fast 4G networks since May of this year; Apple stuck to the slower 3G technology with the yet-to-be-released iPhone 4S.

Using a 3G phone versus a 4G phone is similar to watching the race between the tortoise and the hare, but this time the hare wins.  Seriously – what do you think non-rabid Apple consumers are going to go for when shopping for a new phone – a sexy, slim, fast, affordable phone….or a clunky, proprietary-laden, frustratingly slow shiny abacus?

And the best is yet to come.

Remember – Google is purchasing Motorola’s mobile-phone division with plans to produce their own Android-based phones.

Apple – I think you missed the mark on this one.