Why there is no iPhone 5: an excellent analysis by Horace Dediu

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Henry Blodget (here) put me onto this excellent analysis by Horace Dediu of Asymco  of why Apple released the iPhone 4S - despitw what it must have known would be tepid reviews - rather than a completely revamped iPhone 5.

The analysis is worth reading in its entirety, both the original and Blodget's short commentary. However, I think two key points are worth considering at the higher level:

  1. Apple is a business. Sure, Steve Jobs' great sense of consumer desire and taste, along with his showmanship and relentless willingness to look to the future, rather than worry about cannibalizing its own markets (see Oracle), characterize its product strategy decisions. But, in the end, it is a successful business, and that means selling products that will generate large amounts of revenue at a high profit margin. That, in turn, means relentless focus on product makret fit. Apple wants to be cool... because that is what generates high demand (which leads to high revenues) and strong "must-have" sense (which leads to higher relative prices and thus higher margins). Dediu reminds us that for Apple, from its own internal analysis viewpoint, the 4S and not the 5 make the most business sense.
  2. Markets change. I know that this analysis makes sense on its own for Apple. But given the change in market - lots of Android alternative options - I do not know if this analysis makes sense given the current market. I think it does, but I can see arguments to the other side.

Either way, Dediu reminds us that Apple is a business, and makes the right decisions for the company and its shareholders, even if the general media doesn't get it.