iPhone 4S Cheered by Analysts, Despite iPhone 5 Unicorn

Apple's iPhone 4S may not be the mythical iPhone 5, but it's still impressive, according to analysts who like the specifications the company offered Tuesday.

After perusing the canon of coverage for Apple's (NASDAQ:AAPL) iPhone 4S launch, it's safe to say that never has there been an Apple product unveiled that conjured so much cognitive dissonance.

On the one hand, some folks were disappointed by the lack of an iPhone 5, which was the longest-running rumor going in high-tech after Amazon's (NASDAQ:AMZN) Kindle Fire tablet was introduced last week.

On the other, analysts roundly praised the iPhone 4S, which is launching Oct. 14 in the U.S. on AT&T (NYSE:T), Verizon Wireless (NYSE:VZW) and Sprint (NYSE:S). Yes, even the beleaguered Sprint hopes to find salvation in the iPhone, for which it is reportedly paying millions to offer to consumers.

For images of the iPhone 4S, click here.

Aesthetically, the new handset is the same as the iPhone 4, albeit with some cosmetic changes attributed to the new antenna and radios. It's on the inside where the iPhone 4S shines brighter than its predecessor, the popular iPhone 4.

The iPhone 4S has a faster A5 processor, the new iOS 5 platform, boasting over 200 feature improvements, including a Find Me Friend location-based social application. On Oct. 12, the phone will work with iCloud, Apple's new service for syncing music, movies and more content across Apple iPhones, iPads, iPods and Macs. iCloud stores content and wirelessly pushes it to all of a user's devices.

There is an 8-megapixel camera that, judging from its demonstration during the event, looks to rival the best in the market, paired with 1,080p high-definition video recording.

The software highlight for many who attended the event was Siri, an artificial intelligence-based personal assistant application that lets users ask questions and receive highly contextual answers, such as "What is the weather like?" and "Should I bring an umbrella?"

This application also does things like enable users to call taxis, book restaurant tables, make calls, send text messages and do some other things that a personal assistant might do.

Analysts, who find it hard to find fault with Apple these days, were impressed for the most part.

"While the form factor does not have a bigger screen or thinner body, the processor improvements, HSPA+ [Evolved High-Speed Packet Access] speeds [particularly beneficial for AT&T and European subscribers] should drive a large number of upgrades, especially as outside the U.S. LTE [Long-Term Evolution] deployments are not being rushed," said Jefferies & Co. analyst Peter Misek.

Noting that 64 percent of 216 mobile phone users surveyed said they would purchase an iPhone without knowing anything about the new phone, Piper Jaffray analyst Gene Munster said he expects the iPhone 4S will help the company sell 25 million iPhones in the December quarter.

JP Morgan's Mark Moskowitz took a more skeptical view of the unveiling, if only because there was no iPhone 5 to be seen. "We had expected the company to announce two new devices, an iPhone 5 and a 4-plus," Moskowitz wrote in a research note Oct. 5. "We are disappointed that Apple did not introduce a thinner form factor, but we see the feature set improvements in the iPhone 4S and the broader pricing strategy as positives."

Indeed, the analyst appears to warm to the iPhone 4S, noting that iOS 5 and iCloud "elevate the Apple smartphone above the rest of the pack." Apple's tight integration between its hardware portfolio and iCloud is a key differentiating factor versus the competition, he added.

By the "competition" one could assume Moskowitz is referring to current high-end Android smartphones, such as the Google (NASDAQ:GOOG) Android-based Motorola Droid Bionic, or the new Microsoft Windows phones.

But the best analogy between the iPhone 4S and Android devices is to the Samsung Galaxy S II Android 2.3 Gingerbread 4G handsets, which have sold over 10 million units worldwide.

After all, just as the iPhone 4S is physically much like its iPhone 4 predecessor, the Galaxy S II resembles its Galaxy S forebears, albeit with a thinner, lighter shell, a new processor and snazzier software. It will be interesting to watch how these phones fare pitted against one another for the holiday season.

Apple may have the advantage here, trucking with the top three carriers in the U.S. Unless T-Mobile carries its weight versus the competition, and unless there is a budding interest in the Galaxy S II in the U.S., the iPhone 4S may well whip its Android rival in sales.

So far, there is no evidence to suggest the S IIs are flying off the shelves in the U.S. as they have in Korea, Japan and Europe.

And then there is this: Apple has just opened a new front in the smartphone wars, lashing out at the area where Android has excelled overseas: low-cost smartphones.

Sure, the iPhone 4S is the standard $199.99 price point for an Apple phone with a contract, but the $99 price point of the feature-rich iPhone 4 will accelerate sales of that 16-month-old device, and the free iPhone 3GS (on contract) will help the company expand its footprint even further versus the low-cost iPhone set in Europe and especially Asia.

"We believe Apple's strategy to cover the spectrum of smartphone price points positions the company well in further penetrating emerging markets, including China and other parts of the world," Moskowitz noted.