Apple’s long awaited device launch event last week was met with a powerful wave of disappointment as it turned out that the new release was the iPhone 4S, and not the expected iPhone 5.
Though many people believe that Apple had made an important mistake in this decision, there was actually a reason that the iPhone 4S hit the markets first.
Indeed, it is likely that if the iPhone 5 was released at the event, more devices would have been sold than with the iPhone 4S, as current iPhone 4 owners would have wanted to upgrade. However, the iPhone 4S is being geared toward individuals who still have feature phones instead of smartphones – or people who have a device other than an iPhone.
That said, calling the iPhone 4S a disappointment may be a bit premature, as there is a great deal of strategy behind it from Apple. Horace Dediu, an analyst with Asymco, provided the following explanation for the move.
As many of the current owners of the iPhone 4, which was released 16 months ago, are still held by the 2-year contracts into which they entered when they purchased their devices, the likelihood that they would upgrade before the contracts come to a close is rather slim. This may have meant a significant number of missed opportunities if this release had been the iPhone 5.
Instead, the release of the iPhone 4S opens the door to buyers who are:
• Individuals who do not yet have a mobile phone (approximately 70 million people in the United States)
• Feature phone users who do not yet have smartphones ( over 1 billion people, all of whom would be able to receive a 3GS for free)
• People who have smartphones that are not iPhones (ex, Android, Blackberry, and Nokia users)
