Most people looked at the release of the iPhone 4S (4 Steve) as being a disappointment. There were no WOW features to impress the analysts but after looking deeper the wow factor becomes much more apparent.
First we start with Siri, the newest revolutionary feature from Apple (NASDAQ:AAPL) to follow in the footsteps of the iPod, iPhone, and iPad. Why is Siri revolutionary? Think back to the launch of the iPhone and iPad. Both had the wow factor but we never realized just how the products would be utilized by the general public and how deeply imbedded they would become in our daily lives.
Siri will change all that by becoming our personal assistant. By using and responding in natural language Siri will automate a significant number of our daily tasks. Dare I say Siri may take a significant amount of time away from our smart phone usage? Wondering about a movie time? Let Siri do the search instead of Googling the movie times at our favorite theater. Siri can access Yelp to search for a restaurant or tell us the weather for a particular day. Siri will read back our messages and update our calendars.
The key here is the transition of technology on our phones from a numeric keypad to a fixed keypad to a touchscreen and now no keypad at all. Finally, voice recognition technology like it was supposed to be simplifying our increasingly complex lives available in English, French, and German.
If that is not reason enough to upgrade here are some other reasons:
- Under the hood the iPhone 4S will sport an A5 CPU alongside dual antennas, and an 8-megapixel camera.
- The camera itself uses five elements to detect incoming light along with an advanced hybrid infrared filter for more vibrant colors. The new face detection will determine a portrait or group shot with up to exposures balanced across 10 faces while focusing on the most prominent face.
- Video is shot with 1080p recording, image stabilization, and temporal noise reduction.
- But most importantly for investors who have been clamoring for Apple to move outside of the high end market they got their wish.
- The 8GB iPhone 3GS will be available for free with a new two year contract and the iPhone 4 will cost $99 with a two year contract.
- According to the NPD Group the two bestselling smart phone models are the iPhone 3GS and the iPhone 4 and now the price is being reduced to attack the mid to low end smart phone market.
What should investors take away from the iPhone 4S announcement? Apple is aggressively going after the mid to low tier of the smart phone market ahead of the release of Nokia’s (NYSE:NOK) new Windows phones. By locking new customers up at the low end for two years there is a strong possibility that demand will shift away from the new Windows phones towards the iPhone. At the high end, consumers will take advantage of Siri’s voice recognition features allowing for increased efficiency and time management on top of the improved battery power, camera, and processor.
Analysts will likely underestimate phone sales in the fourth quarter as Apple pushes forward into the mid to low end smart phone market further imbedding Apple products into the general consumer base. As we have seen with Mac sales this year the iPhone are increasing consumer awareness and acceptance of Apple products.
In these uncertain times Apple’s stock looks like one of the safer technology plays as the iPhone 4S becomes the newest game changing product from Apple.
Disclosure: I am long AAPL.