Why Apple Needs an iPhone 5 not an iPhone 4S

Posted by Jeff Scott on October 1st, 2011

[caption id="attachment_92702" align="alignright" width="372" caption="Is this the next iPhone? I hope so. (photo credit: This is my next...)"]

[/caption]Earlier this week, Apple announced their next major media event entitled "Let's Talk About the iPhone." Nearly 18 months after the announcement of the iPhone 4, Apple is expected to unveil the successor. The rumors this time around have been all over the place. From speculation that the next iPhone will be a device very similar to the iPhone 4, simply a spec bump of the current version called and iPhone 4S, to a full blown larger screen iPhone 5, to even seeing both.

I believe that Apple needs an all new iPhone 5, failure to release that would imply, to many, a lack of innovation on a platform that they re-invented. And failure to see an iPhone 5 on Tuesday would look bad for the new Apple CEO and the stock price.

There have been rumors going around since the spring of an iPhone 5 with a larger screen, tapered back, and faster processor. First reported by This is my next, the device looks strikingly like the current iPod touch. But more recent rumors have pointed to that much less innovative iPhone 4S as the next iPhone.

Now let's play devil's advocate for a moment and think of how the lack of an all new design iPhone 5 being revealed on Tuesday would be received by the media and public. While the following can be seen as a bit overblown and even preposterous, I think we're used to that from some segments, and I did say I was playing devil's advocate.

For Apple to wait nearly 18 months to release an iPhone that is basically the same as the iPhone 4 would be thought of as a triple mistake. It would look bad for Tim Cook, new CEO of Apple, it would impact the stock price, and would give Android a further foothold in the smartphone market.

Tim Cook took over for Steve Jobs as CEO of Apple in August. This will be his first big product reveal and in the worlds eyes, his first big test. For Apple to continue to be thought of as a leader in the smartphone area, they need to continue to innovate. Without a new iPhone, it will appear, at least on the surface, that Apple has stopped innovating and that Tim Cook has failed in his new role. In other words, we waited 18 months for this?

Let's end devil's advocate mode for a moment. This is of course preposterous. A little truth that many won't think about is that products like the iPhone are developed over a 24-36 month period. Meaning we won't really see what Tim Cook is capable of for another two plus years. The iPhone that will be announced Tuesday has likely been in development since at least 2009, perhaps earlier.

Without a new iPhone, and the perceived lack of innovation in the smartphone market, Apple should be prepared to take a rather large stock hit. Though it will likely recover, it may take some time and a couple product launches to get back to it's stellar highs.

In this same time period since the iPhone 4 launch, the high end segment of the Android market has been taken over by large screen, dual core processor, 8MP cameras, beasts of devices. The iPhone 4 is really closer to a small screen these days compared to the current crop of large candy bar phones with beefy processors, huge amounts of memory, and large lens cameras. And Android has already surpassed the iPhone in smartphone sales. I now see more Android handsets in use in San Francisco than I do iPhones. While the iPhone 4 is still the most common single device, the number of Android devices I see easily outnumber the iPhone two to one.

More pragmatically, people crave new devices. They want the hot new thing in their hand to look cool, stylish. If you see someone with an iPhone 4S, one that looks just like the last model, you won't know they have the cool new phone as it looks like the used to be cool old phone. So products like the iPhone need to look different frequently to cause people to want them and to sell.

Ok, enough of devil's advocate, let me put the record straight. I think we will see the iPhone 5 on Tuesday. My sources say it is done and ready and is pretty much what we see above. But there are still possible hiccups. There could be production delays, supply problems, or any of a number of contractual and legal reasons that it won't be announced on Tuesday. The chances of that at this point late in the game, are I believe fairly slim. I do believe those reasons are why we didn't see the iPhone 5 in June, the usual iPhone launch timeframe.