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No iPhone 5: Apple Totally Blows Its Moment

You expect smart things from Apple (AAPL). Products that step ahead in key ways. Apple has pulled it off time and again in the smartphone market. But the company just blew it. Lots of anticipation for the iPhone 5 that Apple didn't announce. Just the new 4S with some impressive features, but still ... talk about major disappointment. This is one of the biggest business flubs Apple has seen since the 1980s.

Did something go wrong in engineering? Was there a last minute hitch in manufacturing? Investors and customers had all expected something new, especially after Apple missed its usual iPhone summer launch schedule. Makes you wonder if Steve Jobs retired when he did to keep the aura around his legacy from fading.

They tried to pump it up
Cook tried to invoke the Steve Jobs Patented Reality Distortion Field early on. (By the end of the event, you would see why.) At times he stretched the truth until you could hear it say "Ouch!" Claiming that Apple had a 23 percent personal computer market share as of August 2011? Please. Even if his figure of the Mac nearing a 60 million worldwide installed base was correct, that doesn't come close to 23 percent market share.

One analytics company, Net Application, just clocked Macs at 6.45 percent global market share. And according to an IDC estimate, global PC shipments in 2011 will be 356.9 million. Even the eventual 60 million installed base figure isn't nearly 25 percent of the PCs that will ship this year alone.

Then Apple tried to turn up the hypno-ray to 11, mentioning that it has sold 250 million iOS devices: iPhones, iPads, and iPod touches. There are 1 billion apps getting downloaded a month, and Apple has paid out $3 billion to developers (although the average app probably loses money for the developer).

But desperation slipped in again in the claim that iOS is the largest mobile operating system, with 43 percent compared to Android's 33 percent. Not only did Apple quote comScore numbers (U.S. only) from July (uh, it's October now, right?), but the number likely looked at installed bases, including all those millions of iPod touches from the music player category, in which Android doesn't compete, and iPads from the tablet market, in which Google really wished it could compete. Apple was trying to create a sense of dominance, because the products weren't going to.

Playing catch-up
Apple has known its front-runner status was in tatters because of the combined set of vendors selling Android. It explains why Apple has tried so hard to use legal tactics to keep back the success of the horde of little green robots. Much of the iOS 5 and iPhone 4S announcement was devoted to playing catch-up.

Apple has activation without connection to a computer? Welcome to Android World. Wireless operating system updates are nothing new -- even Microsoft (MSFT) manages that. Messaging between iOS devices sounds like the BlackBerry service that has been such a hit with RIM's customer base.

Not that the iPhone 4S had nothing to offer. That new voice assistant listens to what you say and then takes the appropriate steps, whether getting a weather forecast or making an appointment. That's an absolutely killer feature. But it's just a feature. And a feature isn't a product.

Speeds and feeds
You started to suspect that Cook and company were in trouble when the major marketing thrust was quoting device specs. Look, our camera takes its first picture this much faster than those over there! iPhone 4S has upload speeds of up to 5.8 Mbps and download speeds of up to14.4 Mbps down speeds! Separate sending and receiving antennas! (OK, any improvement on the antenna was probably a good idea).

But, good heavens, it wasn't just the concentration on speeds and feeds, not user experience, that would have brought derision from Jobs. The company tossed around weasel words like "up to." Management wanted to cover its collective corporate rear just in case the performance was, you know, a whole lot slower.

This was the shell of an Apple event. Many of the comments coming in from people who watched the CNET live blogging coverage were positively scathing:

Look at the bright side, people....hopefully it is a shorter wait for the iPhone 5 (from today to June/July 2012) :)Apple has already started floundering and it hasn't even been a year since Steve stepped down

Hey iPhone users, last year called, they want their 4S back! Really though, join the unlocked future, buy a Android Phone!!!!

get the 4s or wait 6 months for the iphone 5? either way galaxy is sounding better by the minute...

Maybe no one should have been surprised. Apple did go from the 3G to the 3GS and then to the 4. But, come on, there was still only a year between models. The iPhone 4 came out in June 2010. The 4S has the feeling of a polished up placeholder.

So the price of the 8GB 4 is now $99 with a contract. So you can get an 8GB 3GS for free when you get service. So what? Android has already pulled out ahead in market share. The 4S simply isn't going to do what Apple needs -- or what the market wants.


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