Oct. 4 -- Apple Inc., in its first product unveiling since Steve Jobs resigned as chief executive officer, introduced an iPhone with a stronger processor to help it vie with Google Inc.'s Android.

The A5 chip in the iPhone 4S will be seven times faster than the processor in the old model, Apple said today at a press conference at its headquarters in Cupertino, California.

The update of Apple's best-selling product marks an early test for Tim Cook, CEO since Aug. 24, who hasn't yet shown he can match his predecessor's skills at product design and marketing. While the iPhone is the world's most popular smartphone, Google's Android software is more widely used, showing up in devices from Samsung Electronics Co. and HTC Corp.

Apple also demonstrated iCloud, a new service for storing files such as pictures and music on Apple's remote servers. That means they can be accessed through iPads, iPhones and Macs, and mobile devices no longer have to sync up to a computer. Apple will give away advertising-free e-mail as part of the service, which comes out Oct. 12.

Apple showed off other new software features, including an integration with Twitter Inc. that lets users quickly post updates to the social-blogging service. Apple's new iOS operating system, which runs its mobile devices, also will be available for free on Oct. 12.

App Store

The iPhone accounted for almost half Apple's sales in the most recent period. Combined, the iPhone, iPad tablet and iPod Touch touch-screen media player have sold 250 million units in total, Apple said today. There are now more than 500,000 applications in the company's App Store, which has generated $3 billion for developers since its debut in 2008.

“In three years, customers have downloaded 18 billion apps -- and it's accelerating,” Scott Forstall, a senior vice president in charge of iPhone software, said at today's event. The rate is now over 1 billion per month, he said.

The company also is making inroads with corporate users. Ninety-three percent of Fortune 500 companies are testing the iPhone for use by their employees, and 92 percent are trying out the iPad, Apple said today.

At stake is leadership in the market for smartphones, which is projected to double by 2015, when 1 billion of the handsets will be sold, according to research firm IDC. While Apple is the single biggest smartphone maker, the Android coalition leads the market, accounting for 41.7 percent.

It's been 16 months since the last iPhone release -- a longer lag than the usual. The pent-up demand may help Apple sell a record 25 million iPhones during the December quarter, according to estimates by Gene Munster, an analyst at Piper Jaffray Cos.

Stock Gains

The success of the product has helped Apple's stock weather market turmoil and the resignation of the CEO who made Apple the world's most valuable company. The shares had climbed 16 percent this year through yesterday, though they pared those gains today. Apple fell $5.70, or 1.5 percent, to $368.90 at 1:45 p.m. New York time on the Nasdaq Stock Market.

The company is looking to China to fuel a new wave of growth. Apple plans “a lot more” stores for the country, Cook said today. The company's retail outlet in Shanghai had 100,000 visitors on its opening weekend, he said.

Apple also gave updated figures on its Mac computer division. The new OS X Lion operating system has been downloaded 6 million times, and the Mac business has an installed user base of 58 million, Cook said.

Apple's iPod, meanwhile, remains an important business, Cook said -- even as the iPhone cannibalizes some of its sales. The company introduced a new $129 version of the iPod Nano and a range of iPod Touch models starting at $199.

The iPod, which made its debut 10 years ago, has reached sales of 300 million units globally.

“It took Sony 30 years to sell 220 million Walkman cassette players,” Cook said.

Source - [ news.businessweek.com ]