Photo: marc.floresUnless you’re living under a rock, you’re probably aware that Apple unveiled a new iPhone yesterday. At what turned out to be a relatively muted Apple product launch, it was new CEO Tim Cook‘s first chance at replacing Steve Jobs as product pitchman. It seems he did just fine.
The new iPhone is loaded with cool new features that the market was anticipating, with one exception: it’s not called the iPhone 5, it’s called the iPhone 4S.
By the time it became obvious that Cook wasn’t going to introduce anything called an iPhone 5, (about 1:50 pm EST yesterday), the stock price began to plummet pretty quickly, as you can see in the chart below. From 12:15 pm to 3:15 pm, the price dropped more than 6%. Also, note the spike in volume at the bottom.
So the question is: what if they’d just named it the iPhone 5? Would the stock have dropped so much, if at all? My guess is no, especially when you look at the recovery the price had late in the day, and the gains it’s made today. Once people actually had a chance to see all the new stuff the phone had, and stopped simply trading off the name itself, they realized that Apple had in fact introduced a new product. So, Apple marketing fail? Or knee-jerk market fail?
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Think about the volume of people that are trading AAPL. There are way too many irrational people that are trading in and out of that a day.
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I suspect they’re holding the “5″ moniker back until they can release a 4G-LTE phone with good battery life (good enough for Apple that is, which prides itself on battery life). The 4S is more like a super-improved “4,” whereas a 4G-LTE phone would be a genuine “5.”
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Many iPhone 4 owners think they own a 4G phone already. They of course would be all wrong.
Or knee-jerk analysis fail?
The iPhone 4S has some hardware upgrades over the iPhone 4, but it’s not a revolutionary new phone. Most of the new features are related to the soon-to-be-released iOS 5, which will run on both models.
Calling it the iPhone 4S instead of the iPhone 5 is, I think, a remarkably honest description of a product that, while an upgrade over the current model, is hardly a great leap forward.
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This is market fail, with investors expecting something that was not promised and being disappointed when unrealistic expectations go unfulfilled. c.f. every other iPhone announcement. Ever.
While I agree that the 4S moniker is an honest description, I don’t agree that the 4S isn’t a great leap forward: Hardware-wise, it *is* a significant upgrade in that it has 2x processors and, if marketing specs are to be believed, 7x graphics performance as well as 2x cellular data speed of the previous model. These are non-trivial upgrades, especially considering that these will directly affect end-user experience.
Also, it ought to be noted that not all of iOS 5′s new features will run on both the 4S and previous models. e.g. Siri, arguably a flagship feature, will not run on older hardware. 4S users will have access to more of iOS 5′s features and a better UI experience than users with older phones, plain and simple.
Knee-jerk fail. Even if you’re only going off the name, you should realize that the 3GS was (and still is) a huge success. Apple doesn’t need to change form factors to offer a greatly improved product.
Doesn’t Apple’s stock price normally take a tumble after every announcement?
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OK, lets say they launch the iPhone 5 which people see as ‘just an upgraded iPhone 4′: whats the Market/media response? That Tim Cook is a fail and the company is doomed without Jobs. (Which I believe is not true btw). However, they called it as it is (iPhone 4S), and whats the Market/media response?Yes, mild disappointment, but general agreement that Cook did well under the circumstances. Next year, the new iP5 will be epic, and by then questions will be muted about Cook vs. Jobs. And all the while AAPL continue to sell MILLIONS of handsets around the globe.
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I think it was the right decision not to over-hype the new phone–better and more honest to position it as an improved iPhone4 vs. a new generation iPhone5.
It’s a shame that the first announcement of the Tim Cook era happened to be one where there wasn’t as much news as people have come to expect from Apple. But good for them that they didn’t try to compensate by making too a big a deal of what they had, even if it meant a short-term dip in share price.
Apple marketing win and market fail. Apple was just testing the waters and when they do launch the iPhone 5 everyone will go nuts.