06 Oct 2011

HBS Faculty Make the Call On the New iPhone4S


BOSTON—Under Steve Jobs's leadership, Apple revolutionized telephony with the coming of the iPhone. On Tuesday, the company unveiled its latest version — the iPhone 4S — only one day before Jobs died. Several members of the HBS faculty reacted to the long-anticipated event.

Marco Iansiti, David Sarnoff Professor of Business Administration

Forget the iPhone 5, at least for this fall. The iPhone 5 is just an iPhone 4S... a bunch more features, 1080p video, voice control, but the same old design and basically the same old phone.

The advanced voice recognition is probably the most interesting feature, but I wonder if Apple is losing its emphasis on "insanely great" products just a bit. This is less the showy, glitzy, "blow you away because we are just Apple" kind of way and more of the traditional incrementalism that we have seen in this industry for a long time.

The one exception is Siri. Asking your phone to set the alarm and having the phone do the work sounds nice, but will it really work? This is the high risk technology that will make or break this phone generation. Is it real value added or just another attempt at voice recognition? Is it more like an iPod or more like the first iPhone? We will see, but so far so good. Siri listens and seems to really do what you say. I can't wait to try it. But is Siri going to be enough?

It is worth noting that this feature-- the most interesting thing in this iPhone launch--came through an acquisition, not an internal innovation. Some tweets also noted that Apple compared the performance and features of its new phone to those of competitors, something that seemed unheard of in the past. Apple was just Apple, and that was it.

Apple might unveil an awesome new release next year, but I don't feel this launch was what everyone was waiting for. Maybe this tweet captures it all: "Biggest test for the iPhone 4S: Would its battery last as long as this press conference?"

Terry Kramer, Entrepreneur-in-Residence

Yesterday, the world lost one of its most notable visionaries, innovators, and executives, Steve Jobs. His ability to create entirely new markets and customer experiences is unparalleled in our day. And his legacy should continue at Apple, since he built a powerful team stocked with both creative and technical talent.

Organizations aren't made of just one person. Apple will continue to write the book when it comes to innovation and ease of use. New CEO Tim Cook has inherited a nimble legacy from his extraordinary, and he is well positioned to take the company forward. Apple has woven a loyal customer web around multiple devices and services, and their fans will keep coming back for more. This week's release of the iPhone 4S is no exception. It builds on Apple's relentless quest to refine and simplify the user experience and throws in some enticing new features, including Siri, a virtual assistant with voice recognition that has the intelligence to process both simple requests like "call home" and more complex requests like multilevel, dependent web searches.

What will be Apple's challenges going forward? Cook and his team will need to keep a keen eye on competitors' moves. More players are moving into the mid- to upper-range smartphone market. Consider, for instance, Motorola's Bionic and the Samsung Galaxy, which offer high-resolution, larger screens, faster processors, and 4G data rates. Emerging market competitors such as HTC aren't far behind, with recent 3G launches offering attractive, multifeatured phones with lower price points. What they don't have is Apple's powerful app store and the legions of customers who've signed up for a sleek, seamless iPhone experience.

As far as providers go, contrary to some predictions, I don't think the iPhone 4S will be Sprint's salvation. With its attempts to appeal to both high- and low-end customers, Sprint suffers from diffused focus. It has the highest customer disconnect rate among the major mobile operators and continues to experience poor customer satisfaction perception issues. It's a dangerous gamble to commit to selling such a huge number of new iPhones (30.5 million iPhones over the next four years at a cost of over $20 billion). To drive the volume of sales required, Sprint risks having to offer significant customer subsidies. Wouldn't this resource and focus be better spent driving a more consistent, low-cost strategy in the marketplace? At the end of the day, this iPhone investment makes Sprint significantly more susceptible to failure.

The big question is: Will I go out and buy the new iPhone 4S to replace my Verizon iPhone? Unlikely, this time around. My Verizon iPhone 4 suits me just fine.

Nancy F. Koehn, James E. Robison Professor of Business Administration

At this week's iPhone 5 launch, we have our first official glimpse into Tim Cook's leadership style as he takes the stage as Apple's CEO. Many wonder how Cook will handle running a business handed over by one of greatest leaders and entrepreneurs of our time, Steve Jobs. Jobs is an icon who forever changed the way we connect. However, he was not the first American business leader to exercise tremendous influence over the way people live and think about what is possible. And this is not the first time such a leader has been replaced.

True, Jobs is on a short list of great American entrepreneurs. Along with Henry Ford, Andrew Carnegie, John Rockefeller and Estée Lauder, Jobs has had an exceptional ability to envision what could be: products and services we couldn't have imagined that we now can't live without. These leaders all share an intense passion, a driving persistence, a keen sense of strategy and a relentless focus on the details of executing their respective visions. In the 14 years since he returned to the company he helped found, Jobs has embodied all of these attributes (as Apple's long streak of product homeruns, its $350 billion market capitalization and its powerful brand attest). Given this context, the elephant in the room at the iPhone 5 launch is this: With Jobs gone, can Tim Cook carry the legacy?

Click here to read Nancy Koehn's entire blog, which originally appeared on www.washingtonpost.com on October 3, 2011.

About Harvard Business School

Founded in 1908 as part of Harvard University, Harvard Business School is located on a 40-acre campus in Boston. Its faculty of more than 250 offers full-time programs leading to the MBA and PhD degrees, as well as more than 175 Executive Education programs, and Harvard Business School Online, the School’s digital learning platform. For more than a century, faculty have drawn on their research, their experience in working with organizations worldwide, and their passion for teaching, to educate leaders who make a difference in the world. The School and its curriculum attract the boldest thinkers and the most collaborative learners who will go on to shape the practice of business and entrepreneurship around the globe.