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From Newsweek

Biting Into Apple’s iPhone Lead

After muddling through a few technical glitches, Steve Jobs debuts the sleek, sexy, and more powerful iPhone 4. So why is it playing catch-up to Sprint’s HTC EVO 4G?

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Apple CEO Steve Jobs just introduced the new iPhone 4, and as expected, it’s a beauty—sleek, slim, and more squared-off than the iPhone 3GS, with a forward-facing camera for doing video chats, a better back-side camera that can take flash pictures and shoot HD video, a better screen, and longer battery life. 

The biggest new feature is a program called FaceTime that lets you make video calls to other owners of the new iPhone. Jobs & Co. acted as if they’d put a man on the moon, saying things like “FaceTime is changing the way we communicate, forever,” and “I can’t believe this is real, that it’s really happening.”

Jobs also called iPhone 4 the biggest leap since the original iPhone when in fact it seems more like a cool, but not earth-shattering, incremental update.

And when Jobs, on stage at Apple’s World Wide Developers Conference in San Francisco, found himself unable to connect his new toy to the Internet, the screwup seemed more than embarrassing—it seemed emblematic. 

A company that for the past few years has seemed invincible now suddenly seems rattled—and for good reason. 

For one thing, if you buy an iPhone, you’re still stuck with AT&T as your carrier, which is an awful experience. Apple fans were hoping Jobs might announce plans to put the iPhone on other carrier networks—but no.

Then there’s the new phone itself. To be sure, it’s a gorgeous device, and Apple will sell a zillion of them. But I’m not sure Apple’s new product ($299 for a 32-gig model, $199 for 16-gig, on sale June 24) can still be considered the most advanced smart phone on the market.

For example, is the new iPhone better than the HTC EVO 4G, which geeks have been raving about? The EVO 4G runs Google’s open-source Android operating system, and has been breaking sales records at Sprint, its exclusive carrier.

I’ve been using an EVO 4G since last week, and I’ve been really impressed. It’s very fast, for one thing. And it can do things the current iPhone 3GS can’t do, like turn itself into a mobile Wi-Fi hotspot, and run more than one application at a time.

To be sure, the new iPhone 4 will support multitasking. But how is it that Apple—mighty Apple, which invented this market space—now races to catch up with some obscure manufacturer in Taiwan?

Also, a lot of what Apple is focusing on in the new phone seems to be kind of cosmetic. (I wanted to say “foofy,” but I guess that’s not an actual word.) 

For example, Jobs touted the new phone’s “retina display,” which uses greater pixel density to make letters and icons look prettier. He showed off a new version of Apple’s iMovie software that lets you edit and create movies on your phone. But seriously, who does this? He showed off a new gyroscope that will let you play cool games, which is fine, except I’m a grown man and don’t really sit around playing games on my phone.

Jobs also showed off Apple’s new ad program, and we were all supposed to be very excited, but honestly I don’t see how my life will be improved by having my phone crammed with ads from car makers, insurance companies, and department stores.

Meanwhile, Android is already outselling Apple, according to market researcher NPD.

And Google has already shown off the next version of Android, which will leapfrog Apple yet again and will run on dozens of devices.

To be sure, Apple still has many huge advantages. For one thing, there are 225,000 apps available for iOS, versus 50,000 for Android. Today Apple announced that it has delivered 5 billion downloads of apps to its customers.

Apple also still has a better user interface. The HTC EVO 4G is a nice-looking phone and I really like the interface, but Apple’s devices still feel more intuitive.

Yet that too may change, since Google recently lured a Web user-interface guru away from Palm.

My sense is that today’s Apple event marks an important tipping point—the point where Android starts to surge past Apple the way Windows surged past Apple in personal computers back in the 1990s.

Moreover, I also believe that Jobs knows this, and doesn’t care. I think he’d rather have a small share of the market where he can exert complete control and create beautiful products that look exactly the way he wants them to look.

Thus we have the new iPhone 4, which will cost a little more but will have pretty icons, pretty ads, and a cool video-chat feature that works only if the person you’re talking to has the same Apple phone you do. If you want to buy into Apple’s world, and you can deal with AT&T as your carrier, you’ll probably be very happy.

But most of the world is headed elsewhere, I think.

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