Tuesday, October 11, 2011

Ultimate Smart Money By APPLE For Releasing iPhone 4S

Last week Apple launched iPhone 4S, which was a big disappointment by many people and I was one of those people.  I was confident  that Apple would release iPhone 5, but instead I heard about iPhone 4S.  I was very disappointed because I was going to get one.   Instead, I will have to wait until iPhone 5 eventually gets released probably sometime next year.  I am currently a Blackberry Torch owner so it would have been a nice upgrade if I had switched to iPhone 5.  So, why did Apple take this risk and not release iPhone 5 knowing full well that there will be many disappointments? 

I think it was the ultimate smart move by Apple for releasing iPhone 4S.  You would think they would have sold more iPhones if they had released iPhone 5 (I know at least one more because I would have bought one…).  However, if you think about their strategy, it totally makes sense at least to me. Plus, iPhone 4S were sold more than 1 million on the first day of pre-ordering.

Apple also sold many millions of iPhone 4 when it was released last Spring/Summer of 2010.  When these people bought iPhone 4, they had to sign a two year contract.  Their two year contract ends in Spring/Summer 2012.  If Apple had released iPhone 5 last week, these people who are already iPhone 4 owners cannot upgrade until next year.  Now we know that Apple’s vision for this year did not include current iPhone 4 users.

Then what was their vision for this year?  Apple wanted to target people like me who currently do not own or never previously owned an iPhone.  For these people, iPhone 4S would be a decent upgrade and will most likely to upgrade despite it not being an iPhone 5.

But the main reason why Apple did not release iPhone 5 was because they wanted to target iPhone 3 version owners.  There are at least 60 millions of iPhone 3 owners in the world and Apple wanted these people to upgrade now.  And Apple is probably right that they will upgrade because the features and capability are much better with iPhone 4S compared to iPhone 3 versions.  

Of course there will be many people who will wait out for iPhone 5 but I guess it was worth the risk that Apple ended up taking. I think it was very smart for Apple to take advantage of the opportunity by releasing iPhone 4S.

These are the reasons why I think Apple made my ultimate smart money list!  Although Steve Job is no longer with Apple, I think they are still making the right business decisions and I’m sure they will continue their recent success into next decade.

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