Why iPhone 4S, not iPhone 5….

11 Oct

I found this article very interesting….. so I thought I’d share it with my dear readers…

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It explains why Apple launched the iPhone 4S, even though many people were waiting for and expecting the iPhone 5…

And like the author says…”Now I get it!!”

When Apple launched the iPhone 4S instead of the iPhone 5 last week, I initially thought it was a disappointment and a mistake.

But viewing the 4S as disappointing ignores Apple’s likely thinking behind it, which Asymco analyst Horace Dediu explains very clearly here.

The thinking is that most iPhone 4 owners are still bound by the 2-year contracts they had to enter into when they bought the iPhone 4, so they’ll be less likely to now upgrade anyway (barring carriers waving those contracts, which they might have if Apple had released the “5”).

So the 4S isn’t aimed at these folks. It’s aimed at the other three categories of iPhone 4S buyers:

  • Pre-iPhone 4 iPhone users (~70 million of them)
  • Non-smartphone users (1+ billion, who can now get a 3GS for free, if price is an issue)
  • Non-iPhone smartphone users (Blackberry, AndroidNokia)
The release of the forthcoming iPhone 5, meanwhile, which presumably will be a more radical upgrade from the iPhone 4, will likely be timed to appeal directly to the ~70 million iPhone 4 owners who will just then be starting to come off their two-year contracts. The iPhone 4 was released in the early summer of 2010. So the two-year window for these contracts will begin to roll off in the summer of 2012 (next June).

So it wouldn’t be surprising to see Apple launch the phone next June, when the iPhone 4 folks begin to come off their contracts.

In short, Apple’s thinking about the iPhone 4S may have been as follows:

  • It has to be good enough to get iPhone 3G and 3GS users drooling (check)
  • It has to be good enough to get non-smartphone users to want to upgrade to it or the free 3GS instead of an Android phone (check)
  • It has to be good enough to get some Android and Blackberry users to switch (check)
So all you iPhone 4 users…hold your horses….
wait till next year to upgrade….to the much anticipated iPhone 5 🙂
BIG sis

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