IPhone 4S Disappoints Consumers, Investors; Siri App Kicked Out of App Store

A lack of hardware updates leaves customers and investors disappointed in the new iPhone 4S

Through a good portion of 2011, many awaited the big iPhone 5 announcement with the traditional amped-up presentation to show off all the new features an Apple fan could hope for. Instead, what they got was the iPhone 4S and a presentation that lacked the charisma of former CEO Steve Jobs.

The iPhone 4S, which was announced yesterday, does give customers a few changes to look forward to. It's trading in the single-core A4 processor for a dual-core A5 processor. Also, it has 8-megapixel camera with backside illumination (the iPhone 4 had a 5MP camera), the new mobile operating system iOS 5, and it can operate on CDMA and GSM networks.

A main addition to the 4S is the voice assistant called Siri. Siri has been a third-party app that could be downloaded for iOS devices, but now, a more fluid and user-friendly version of the app is integrated into the iPhone 4S. The app was removed from Apple's App Store after presenting the 4S yesterday, and the servers were taken offline. The Siri servers, however, are back online with the following message: "I've been replaced! The new Siri is even smarter and better looking than me, and waiting for you on the iPhone 4S. I'll be leaving for home Oct. 15th. Until then...how can I help you?"

While a newer, better version of Siri voice command is a nice addition to the 4S; it may not be enough to encourage current iPhone 4 users to switch to the latest addition to the iPhone family. Many were disappointed by the lack of external changes, saying they had hoped for a thinner phone with a larger screen. The iPhone's appearance has not changed in over a year, unless you count the release of the white iPhone 4.

"It's been 16 months and all you've got is an A5 processor in the existing iPhone 4," said Colin Gillis, an analyst with BGC Partners. "It's a mild disappointment, but they're still going to be selling millions of units."

The iPhone 4S may sell during the upcoming holiday season due to the expiration of two-year 3GS contracts, but Android-powered smartphones are at the top of their game and Apple really could have used a home run with a new device to intensify competition. Android-powered smartphones had voice command features integrated into their systems already, and the hardware/software is continuously changing. Apple's decision to not update hardware in the 4S may lead to more Android-related purchases, putting the iPhone maker behind by the time it releases the iPhone 5.

According to a Nielsen study, Android-powered smartphones are No. 1 in the U.S. with a 43 percent market share leaving the iPhone at No. 2 with a 28 percent market share.

Consumers and investors are disappointed in the 4S release, but Apple has some other tricks up its sleeve. Along with the 4S announcement came the news of a $99 iPhone 4 and a free iPhone 3GS for those who sign long-term contracts with their wireless carriers. This will appeal to low-end markets and give Apple an edge in a whole new area.

"Apple is hitting Nokia where it's vulnerable," said Michael Yoshikami, CEO of YCMNet Advisors. "How many billions of people in emerging markets would love to have an iPhone? These are a growing demographic."

The iPhone 4S will be available starting at $199 on October 14.