BANGALORE, INDIA: Apple on Tuesday announced its latest iPhone, the iPhone 4s, which represents an upgrade in terms of internal hardware but an unchanged exterior. The phone will also run the latest version of the iOS software, which will release as an upgrade for existing iPhone owners shortly as well.

Chief Telecoms Analyst with Ovum Jan Dawson sees this hardware upgrades as incremental rather than revolutionary. The processor gets an upgrade from the Apple A4 chip used in the iPhone 4 to the Apple A5 chip used in the iPad 2, which should result in good speed improvements. The device also uses a dual-mode wireless interface, running both GSM and CDMA, although it only gets a speed bump on the GSM side, with HSPA+ 14.4, he notes.

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According to Dawson these upgrades will be compelling to iPhone 3GS users, but perhaps not so much for iPhone 4 owners, who may prefer to wait for more substantial hardware upgrades in the next iteration of the phone.

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iPhone 4S was always bound to disappoint

The iPhone announced on Tuesday was always going to be a disappointment, simply because of the vast number of false rumors about the device's capabilities, form factor and features which circulated months ahead of the announcement. Most significantly, the device's screen size and other external characteristics remained unchanged, but it also lacks '4G' in the form of LTE, WiMAX or HSPA+ at 21Mbit/s or above, all of which were rumored at various points in the last few months despite Apple's previous statements that it had not been able to incorporate these technologies without significant compromises in size, cost or battery life.

The use of an 'S' echoes the earlier release of the 3GS, which was an incremental internal upgrade to the 3G rather than a major shift, but the difference is that the Apple faithful have been waiting over a year in this case, and may well have to wait at least another year for the next iteration. As a result, the new device will likely mostly appeal to iPhone 4 owners, who will largely make the software upgrade to iOS 5 but not the hardware upgrade to iPhone 4S, partly because for many of them the hardware upgrade will not yet be subsidized under the terms of their carrier contracts.

Apple deliberately doesn't talk hardware specs in terms of processor speeds or RAM when it launches devices, preferring to focus on performance, which also makes a good deal of sense since the iPhone's quasi-multitasking capability is less demanding on the hardware than the true multitasking found on other operating systems. But the dual-core A5 at least brings it up to par with the other dual-core processor based phones launched recently, with an estimated 1GHz processor speed, so that it need not seem inferior even on paper to competing devices.

Apple's mass market strategy

In some ways, the continued sales of the iPhone 4 and 3GS are a bigger story, because they represent the best answer Apple has to its strategy for emerging markets and the low end of the smartphone market. While the iPhone 4 has sold very well - likely over 70 million units since it was launched in mid-2010 - the iPhone 3GS has been a very popular option in certain markets, selling at lower and lower prices over the past year and appealing to first-time smartphone buyers in particular.