The launch of the new iPhone disappointed Wall St. But Apple’s (NASDAQ: AAPL) decision not to significantly upgrade the smartphone is a signal that it believes the first half of 2012 will be the time to make big changes to the product. Apple may regret that decision.
Most observers expected Apple to release an iPhone 5 with features well beyond those of the iPhone 4. Instead the iPhone 4S included very modest changes to its predecessor.
Apple still has not said when it will launch a 4G phone made to operate on the Sprint-Nextel (NYSE: S) Wimax 4G network and LTE-based products from Verizon Wireless and AT&T (NYSE: T). Rivals such as Samsung and HTC already have smartphones that work with ultrafast wireless systems.
Apple has to hope that its timing will be impeccable. That means that it can sell millions of the iPhone 4S as its loyal customers buy a handset with little change from the previous generation. As 4G reaches the tipping point at which most consumers decide to opt for it over 3G, Apple’s iPhone 5 will launch with a radical upgrade of features and 4G capability as well.
Many more people have 3G smartphones than 4G ones. Apple thinks it can catch demand for 4G as it begins to crest. That will work so long as that crest does not begin before mid-year 2012.
Douglas A. McIntyre
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