Apple rolled out its much-anticipated iPhone 4 this week, with company CEO Steve Jobs taking the stage June 7 at the company's 2010 Worldwide Developers Conference (WWDC) in San Francisco to show off the next-generation device. Despite the iPhone 4's advanced features, however, Apple finds itself embroiled in an intensifying battle against Google in the smartphone space, as Android-based devices continue to proliferate.
Jobs' presentation at the WWDC highlighted Apple's strategic emphasis on its mobile business. In addition to touting new applications such as Netflix for the iPhone and high sales for the company's iBooks, Jobs also cited the 2-million-plus sales of the iPad. But the iPhone 4 dominated both his speech and the day's tech news cycle; the task for Apple was to generate as much excitement for the device as possible, despite having lost the vital element of surprise after early prototypes leaked to tech blog Gizmodo and a Vietnamese online forum.
As those prototypes detailed, and Jobs confirmed during the speech, the iPhone 4 includes a larger battery, thinner body, a proprietary A4 processor under the hood, a front-facing camera for video conferencing, and a 5-megapixel camera paired with a rear-illuminated sensor. Jobs described the new smartphone as "the biggest leap since the original iPhone," according to a live transcript of the event, adding: "This is beyond doubt one of the most precise, beautiful things we've ever done."
Analysts were more measured in their reviews for the device, but overall seemed positive.
"While the iPhone 4 isn't the leap forward that Apple paints it as, it is an exceptionally beautiful device and is a substantial upgrade that will succeed in maintaining Apple's mind and market-share growth," Charles Golvin, an analyst with Forrester, wrote in a June 7 research note. "Apple's carrier partners will benefit more in renewed loyalty as existing customers upgrade than in new customer acquisitions, although we expect AT&T's new introductory pricing tier will lure in family plan additions as well."
Golvin cited Apple's new FaceTime feature, which allows users to make video calls via WiFi, as having the potential for mass-market appeal.
"With its FaceTime video calling app, the company demonstrated what it does best: make technology usable by mainstream consumers," Golvin wrote. "If Apple succeeds in convincing the industry to adopt FaceTime as a standard, the New York World's Fair of 1964 will finally realize one of its visions: video telephony."
Other analysts seemed more ambivalent.
"We see the iPhone 4 announcement meeting expectations and the lack of other announcements slightly disappointing," wrote analysts from Macquarie, according to The Wall Street Journal.
The iPhone 4 will be available in either white or black, starting June 24. The 16GB version will retail for $199, and the 32GB version for $299, with a two-year contract through AT&T. In an inevitable move, Apple also lowered the price of the iPhone 3GS, to $99 for the 8GB model.
Despite its iPhone push, Apple finds itself under fire-at least in the popular imagination, if not in actual market share-by the slowly increasing prevalence of smartphones running Google Android, which are seen as a direct competitor in the consumer smartphone space. Many of the new aspects of Apple's new iOS4 operating system, previously dubbed "iPhone OS 4," seem designed to blunt the competitive advantage of certain Android features, notably multitasking. Others-such as the iAd platform that lets developers bake advertisements into mobile applications-appear more of a direct attack on Google's business model.
The latter in particular has drawn some controversy.
"Apple proposed new developer terms on Monday that, if enforced as written, would prohibit app developers from using AdMob and Google's advertising solutions on the iPhone," Omar Hamoui, CEO of AdMob, wrote in a June 9 posting on "The Life and Times of AdMob" blog. "The terms hurt both large and small developers by severely limiting their choice of how to best make money. And because advertising funds a huge number of free and low-cost apps, these terms are bad for consumers, as well."
Whether such concerns matter to Apple, considering its pitched battle against Google, remains to be seen; in any case, the iPhone and Android devices seem prepped for a Cold War of sorts, particularly when it comes to their steadily escalating technical specs.
"Apple is really setting itself apart from the Google Android phones with the use of the 3.5-inch retina display on the iPhone 4," Vinita Jakhanwal, an analyst with iSuppli, wrote in a June 10 research note. "The Nexus One smartphone, introduced in January, upped the ante in handset displays with its 3.7-inch AM-OLED to deliver stunning images. However, Apple raised the bar even further by offering an LCD display with advanced In-Plane Switch (IPS) technology," which is also incorporated into the iPad.
Jobs used his keynote address to position the retina display as the wave of the future, at least when it comes to smartphone displays. However, iSuppli anticipates that a number of smartphone manufacturers will follow Google's AM-OLED adoption when it comes to their devices.
Apple made at least one new friend this week, though: At the WWDC, Jobs announced that Microsoft's search engine, Bing, had been added to the iPhone, joining Google and Yahoo.
"Microsoft has done a real nice job on this," Jobs told the audience. Google, however, will remain the smartphone's default search engine.