Apple stumble seen as open door for rivals

iPhone 4S fails to impress investors, fans; "Apple no longer has a leading edge, its cloud service is even behind," says analyst.

By REUTERS
October 5, 2011 14:07
2 minute read.
A woman uses her iPhone 4 for Web surfing

iPhone 4 311 R. (photo credit: REUTERS/Truth Leem)

 
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TAIPEI/SEOUL, Oct 5 (Reuters) - Rival smartphone makers could exploit a rare letdown by Apple in the launch of its new iPhone 4S model, which failed to wow fans, and grab a bigger share of the most lucrative part of the phone market.

However, analysts also noted that Apple has decided to keep older iPhone models and slash their prices, potentially helping the company to expand sales in lower-end and developing markets, where Nokia and Samsung have dominated.

"Apple no longer has a leading edge, its cloud service is even behind (Google's mobile operating system) Android; it can only sell on brand loyalty now," said Gartner analyst C.K. Lu in Taipei.

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"Users may wait to buy the next iPhone; if they can't wait, they may shift to brands with more advanced specs."

The iPhone - introduced in 2007 with the touchscreen template since adopted by rivals - has proved to be the gold standard in the booming smartphone market, and its surging sales have hit the ambitious plans of many competitors.

But shares in Samsung Electronics , HTC and LG Electronics, which all make phones using Google's Android operating system, ended higher after Apple unveiled the iPhone 4S at its Cupertino, California headquarters overnight.

The new iPhone 4S is identical in form to the previous model, disappointing fans who had hoped for a thinner, bigger-screened design of a product that had not been updated for more than a year.

While the device's high-tech wizardry such as voice commands - for sending messages, searching for stock prices and other applications - caught the attention of many analysts, it might not be enough to make it a must-have for consumers.

"Major concerns for Samsung had been that its smartphone momentum will decelerate with Apple's new iPhone, but that is now less of a concern as the new iPhone failed to excite many," said Kim Young-chan, an analyst at Shinhan Investment Corp in Seoul.

On Wednesday Samsung also said it would file for a sales ban on the new iPhone with courts in France and Italy, alleging that the phone infringed its mobile technology patents, widening an already extensive legal battle with its arch rival.

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