Despite months of iPhone 5 rumours, speculative analysis and even a review of a phone that did not exist, Apple confounded many by not launching an iPhone 5 yesterday.

And yet, in hindsight, this should not be a massive surprise. Apple is a business: it sells phones to make money. And the iPhone is continuing to make Apple a very wealthy company indeed.

At yesterday’s iPhone 4S launch event, Apple’s new CEO Tim Cook noted that more than half of all the iPhones it has sold since the company got into the phone-making business back in 2007 have been last year’s model: the iPhone 4.

If it ain’t broke, goes the saying, don’t fix it. Or in Apple’s case, don’t make unnecessarily drastic product revisions and risk derailing what is a very well-oiled money-making machine.

iPhone 4S

The Apple iPhone 4S: it’s new on the insidePhoto: Apple

Once again, Apple is going for evolution, not revolution – just as it did with its iPad to iPad 2 update. And the iPhone 3G to 3GS update.

While Apple marketed the iPhone 4 with the hype-tastic tag line, ‘This changes everything. Again.’, the iPhone 4S gets the much more modest motto – at least by Apple’s adverb-packed standards – ‘It’s the most amazing iPhone yet.’

Apple’s product roadmap dictates it’s simply too soon for an iPhone 5 to ‘change everything once again’. Cupertino’s upgrade cycles are meticulously structured for it to get the most out of its products – and therefore its customers. This means incremental updates are the natural follow-on to more substantial revisions.

Revolution begets evolution begets revolution and so on.

Reporting its third-quarter results this summer, Apple revealed it sold 20.34 million iPhones in the quarter – representing 142 per cent unit growth over the same quarter a year ago. It is selling more iPhones than ever – and making more money than ever.

The iPhone 4S brings a dual-core chip to Apple’s handset and an eight-megapixel camera that can match the specs of the vast majority of high-end smartphones. Sure, it doesn’t have NFC or LTE or 3D or even an all-new teardrop-shaped unibody. But it’s still a compelling handset for a lot of smartphone users.

But what about innovation? Isn’t Apple falling behind its Android-powered competitors on that front? It’s been 16 months since…

…the last iPhone launch event, the iPhone-5-less fanboys cry. Gaps between iPhone launches are getting bigger.

This growing gap indicates Apple is changing its focus. It is becoming less about power users and gadget enthusiasts, and more about the mass market and the average, everyday user. Tellingly, the launch of the iPhone 4S included additional iPhone announcements: Apple will continue to sell the iPhone 4 and the 3GS – broadening its product portfolio from two iPhones to three.

The same shift is evident in Apple’s Mac and Mac software business, where it’s becoming less about pro users and more about consumers. See, for instance, the furore around its overhauled Final Cut Pro X video-editing software.

At the iPhone 4S launch, Cook flagged up that iOS devices account for five per cent of the “overall market” for mobile devices – that is, both smartphones and their less capable cousins, feature phones – describing this as “an enormous opportunity for us”.

In other words, Apple is eyeing volume and emerging markets as well as the high end. Little wonder BlackBerry maker RIM’s share price fell to a new yearly low yesterday. Apple is positioning itself to take a big bite out of the low- and mid-range mobile markets, rather than just sitting pretty at the top end.

Risky business

Going for volume is not without risks, of course. Apple risks alienating its hardcore fans – those technology lovers who will only be satisfied with bleeding-edge updates and cutting-edge kit.

But the truth is that’s a minority market and many of those early-adopter enthusiasts will have already jumped ship to devices running Google’s Android OS – where the pace of software innovation has been outstripping iOS for a while now. As one iPhone-owning Mac app developer told me yesterday: “My next phone will be Android.”

Another risk is that Apple becomes a commodity company. By pumping out cheaper and cheaper iPhones it could erode its own, currently very high, device margins. But again, Apple may not have much choice here. Cheaper Android-powered devices have long been pushing into the mid- and even low-end mobile market. The price and cachet of smartphones is already being eroded.

Apple eyeing the lion’s share of mobile pie – the 95 per cent it doesn’t already own – is ultimately a sign of the times in mobile. Smartphones have evolved to a level where they are now so smart, the standard is so high, that most updates are evolution not revolution. The days of having a choice between Symbian or Windows Mobile are over.

Hardware is not a long-term solution in mobile – software is. And Apple knows this. In the end, people don’t buy Apple because of its shiny hardware. Sure, the shininess helps but people buy Apple because of its ecosystem and infrastructure. Because of apps and all the stuff they can get via iTunes.

That’s the future of mobile. Not a teardrop-shaped, ergonomically pleasing form factor.

So the iPhone 5 can wait a while yet – Apple has plenty of other fish to fry.