What if They'd Just Called it the iPhone 5?

Unless 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?


Oscar

I had the exact same thought after following the release. I think it makes sense to compare the difference btwn the 4 and 4S to the difference btwn the 3G and 3GS. Look at the specific improvements like processors, cameras, functionality (eg Siri which the regular 4 wont have!) etc. Clearly, the 3GS should not have been named the 4, but calling the latest version a 4S is definitely depriving it of a whole lot of a status.

I personally think the improvements are vast enough to legitimately call it the iPhone 5. On the other hand, I'm planning on buying this phone so the fact that they didn't call it 5 should make the line into the store slightly shorter, so I guess I should be happy!

Scott S

I hate to admit how much i love the Apple marketing machine. As a real tech power user, I hate apple products. Hate. They are overpriced, ridiculously simplistic (honestly so simple i cant use them b/c i overthink the simplest functions), and overly restrictive. To the average power user/IT admin you can;t do half of what you expect to be able to do with anything they product outside of a Mac Book Pro. For instance, with any android phone i can tether my phone to my laptop (for free and with no subscription), send free messages to others using a similar app, record 720p-1080p video, hold a video chat, and play a gorgeous 3D game. Some of these things were just introduced for the iPhone 4Gs yesterday but that i;ve been doing for a year and a half on android for free and with no special technical ability.

However, no one can deny the apple marketing machine for the masses of tech idiots. Apple allows the average tech idiot to do things without requiring any special training or knowledge. They havent really EVER done anything exceptionally awesome, but theyve taken exceptionally awesome ideas and made them easy enough for an idiot to use. They deserve all the credit for this theyve ever been given.

With that back story, this is a marketing fail. This new phone is a marginal update and deserves, technically, the 4s moniker it was given especially considering its cosmetics didnt change at all. However, since every tech, apple, and consumer blog in the world expected this to be an iPhone 5, this is nothing short of a let down and will never be anything else. The World expected a brand new phone and they didnt get it.

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rose

Could it be that Apple knew that Steve would pass away so soon and delayed the "iPhone 5" designation on purpose? It's a bit crass to think it but it makes business sense for them to save it for when it would get maximum attention. Apple has always been very savvy with their product announcements.

Tim

Market fail - have a look at the amount of interest in the iPhone 5 we saw in Australia: http://www.experian.com.au/blogs/marketing-forward/2011/10/05/iphone5-searches-five-times-greater-than-kindle-fire/

KEVIN

4S = For Steve

bla

IMHO you have mistaken the reason for the recovery---it was part of a market-wide rally.

tof

Could it be possible, that we were seeing the effect of Algorithmic trading ? I mean that sales of shares got automatically triggered by a certain announcement, until human correct the trade...

tof

Could it be possible, that we were seeing the effect of Algorithmic trading ? I mean that sales of shares got automatically triggered by a certain announcement, until human correct the trade...

Zakafury

As an iPhone 4 owner, I'm very happy that I'll be able to get an iPhone 5 on release day.

I don't know how this would affect the stock prices, but it seems like a marketing choice to give loyal customers who almost universally have two-year contracts a little less buyers remorse.

People who have a 3GS with contracts that just passed last July can get a 4GS, those of us who skipped the 3GS and got the first of the fours, can wait with great anticipation for the 5 (point oh).

kevinptrainer@gmail.com

In light of Steve Job's death yesterday, maybe the 4S stands for "For Steve". That'd be a nice tribute.

W. Bennett

The iPhone 4s(teve) was named in honor of Steve Jobs.

CWCOST

I've been saying the same thing. All that was missing was the iPhone 5 name.

It has already broken the early sales records. One reason for the 4S name could be that the external form factor didn't change. Next year's external shape will probably be slightly tweaked plus it will probably have 4G LTE, and that would certainly merit a full name change.

Tom

Version numbers actually have a technical meaning. Marketing may ignore that, but "iPhone 4S" is technically right.

Zach Fine

Apple stock drops at pretty much every new product announcement for reasons unknown. I'd love to see an analysis of that phenomenon.