Challengers mean iPhone must deliver on the hype

Android has 39 per cent of the American market and growing. Apple needs a product that will put it out in front again

It's hard to imagine an event more hyped than last night's announcement by Apple from its California headquarters of the new iPhone.

But the funny thing is that Apple has done none of the hyping, remaining stubbornly silent in the face of increasingly frenzied speculation, alleged leaks and gussied-up fake photos on dozens of websites, all guessing there would be a new phone with a better camera, bigger screen and faster processor.

There is undeniably massive interest in what the next iPhone will be. The current iPhone 4 was hit by a storm of criticism for having poor signal reception thanks to an antenna built into the phone's frame. This didn't stop it from going on to sell in its millions, and it is surely the most successful product the company has ever launched.

But Apple may not have things its own way forever. Remember that Apple makes a large proportion of its profits from the iPhone, and the current model was launched in June 2010.

Last night's unveiling was the first since Steve Jobs stood down for health reasons in August, leaving the new CEO, Tim Cook, to lead the phone to market. Mr Cook, 50, grew up in Alabama, near the city of Mobile, appropriately enough. He has been crucial to Apple's success in recent years by managing inventory, driving down the price of components and delivering the goods. A safe pair of hands, then, but does he have the vision thing? And could he compare with the consummate showman Jobs, with his "reality distortion field" capable of selling ice to Eskimos when it comes to presenting a product? His performance last night will be scrutinised in detail by the markets, alongside the new product.

Apple's share of the smartphone market is not what it was. While the iPhone beats any other single handset, if you measure success in terms of the operating systems that power smartphones, it's a very different story.

A Nielsen survey in July gave Apple's system, iOS, 28 per cent of the US smartphone market. Not bad, and way ahead of BlackBerry (20 per cent) and the new Windows Phone 7 system (6 per cent). But Android, the open-source software from Google, is available for anyone to use. Android has 39 per cent of the US market and growing. Even so, no individual Android maker matches Apple's 28 per cent, HTC coming closest with 20 per cent.

Apple's announcement needs to put the company out in front again. No surprise, then, that the operating system is being updated too, with its biggest changes and improvements yet.

The new version will be launched imminently and features iCloud, a system for storing software, music and videos on Apple's remote computers rather than on your home PC. In fact, the new software means you don't need a computer to make the most of it.

Last night's unveiling and the public response will prove crucial to Apple. It tends to innovate by evolving products rather than radically overhauling them, so a new phone that looks the same as the iPhone 4 could offer huge improvements in a familiar, popular, design.

Whatever the response to the iPhone 4S, one thing seems likely: the rumour mill will start grinding again immediately with hype for next year's model.