iPhone 4S launch comments from JMP Securities analyst added to this update.

BOSTON ( TheStreet) -- Apple ( AAPL) took 15 months to bring a new iPhone public, longer than usual. Perhaps the company should have waited and saved new CEO Tim Cook from the embarrassment of trying to sell consumers on the underwhelming iPhone 4S.

To escape the shadow of former CEO Steve Jobs, Cook needed to be flawless on stage Tuesday in his first major presentation as head of Apple. While Cook's performance was solid and other key executives shared the spotlight, this wasn't the best time for the newly crowned king of all gadget companies to be thrown to the lions.

Apple CEO Tim Cook speaks at the Oct. 4 event, which introduced the new iPhone 4S.

Make no mistake about it, Apple disappointed consumers Tuesday. Apple's much-ballyhooed "Let's Talk iPhone" event lasted more than 100 minutes and, at the end of that grueling marathon, consumers have little to be excited about. The iPod lineup, which usually receives a complete makeover in September before the holiday season, was left relatively untouched as prices were lowered. The new iOS 5 software was allotted a big chunk of time, although most of the presentation parroted what was introduced at Apple's Worldwide Developers Conference in June.

Instead, the major announcement at Apple's big media event was the iPhone 4S, a handset that looks exactly like the current iPhone 4 that was released in June 2010. The internal guts of the phone are upgraded, but potential iPhone buyers who aren't Apple fanatics will likely have trouble discerning one from the other. The company needed its best salesman to pitch the iPhone 4S to rabid fans. That person was not Tim Cook.

The disappointment over the new iPhone 4S is loud. Apple fans and investors were worked into a fervor over a possible unveiling of an iPhone 5, which was reported to have a different form and operated on faster LTE and WiMax data networks. In TheStreet's live blog of Apple's product announcement, the unveiling of the iPhone 4S was greeted with a smattering of boos:

Wow, such a disappointment ... 15 months it took to come out with 4S

FAIL!!! I'm going to Verizon now and buying 4 droids with 4G and selling my Apple stuff!

I am anticipating riots, gang wars, and much violence because of this lackluster announcement.

Who would NOW want to buy a 4S when we know the 5 will be released sometime later?

For investors, the reaction to the iPhone 4S should be worrisome. To be sure, Apple is going to sell plenty of iPhone 4S handsets. The improved camera, faster processor, and new voice-recognition feature will be enough to persuade consumers to upgrade. Mike Abramsky, an analyst at RBC Capital Markets, says he expects a similar surprising uptake like that of the iPhone 3GS; Abramsky's iPhone forecast remains at 110 million for fiscal 2012, a 48% increase from a year earlier, with 27 million sold in Apple's first fiscal quarter.

But Cook is now in a tougher position than he was before and, as a result, so is Apple. There was concern over how well Cook would come across on stage after consumers have grown accustomed to the way Jobs unveiled products with passion and hyperbole. Jobs famously used adjectives like "magical" and "revolutionary" to introduce the original iPad.

With expectations running high, Cook was forced to go on stage and sell people on essentially the same phone they already have. This was a critical presentation where Cook needed to establish himself as head of the most innovative company in the world. After a three-month delay, he should've come armed to the teeth with surprises from Apple, not a half-step improvement to the iPhone 4.

Channing Smith, portfolio manager of the Capital Advisors Growth Fund ( CIAOX), counts Apple as one of his largest holdings and has been a strong backer of the company. Yet, Smith uses words like "underwhelmed" and "lackluster" when talking about the iPhone 4S unveiling.

"Investors have become accustomed to this new innovative technology every time Apple has an announcement," he says. "We're accustomed to seeing something that knocks your socks off, so it's somewhat disappointing. But expectations may be getting a little unrealistic."

Those expectations exist, though, because of the culture Jobs created. Under Jobs, Apple operated in secrecy, taking the opportunity at big events to promote new products like the iPhone, iPad and iPod. Jobs helped cultivate a cult following that enjoys speculating for weeks and months leading up to product launches. Unfortunately for Cook and the rest of the Apple team, it's an environment they must now operate in.

Smith says investors have become impatient and they lose track of the fact that Apple continues to deliver innovative products. "Their technological lead on everyone else continues to be very wide, so going into the holiday season, we see a real lack of competition," he says. "That's going to create a very good setup for Apple's earnings going into the holiday season."

There's plenty to be excited about over the short-term for Apple investors. As the company noted in its presentation Tuesday, the Mac computer continues to take market share, penetration of the company's products is very low internationally, and Apple continues to sell tons of devices. On a valuation basis, Apple is an attractive growth stock with a forward price-to-earnings ratio of only 11, a big discount to the broader market before Apple's massive cash position is stripped out.

Over the long term, though, there should be worry that Apple can continue its dominance over the competition. While the iPad doesn't look to have a viable competitor yet, pending the release of Amazon's ( AMZN) new Kindle Fire, Apple now appears to have left the door open to competition for the iPhone.

In a research note released Wednesday, JMP Securities analyst Alex Gauna called the iPhone 4S an "incremental improvement" over the iPhone 4, but noted concerns of increasing competition for Apple in the mobile handset market. Gauna has a market perform rating on Apple shares.

"We couldn't help but come away with the impression that the advances, launch forum and presentations lacked much of the panache seen in the past," Gauna wrote in the research note. "This could heighten investor anxieties around how the company will operate without visionary leader Steve Jobs at the helm as well as leave the door open for Android to continue gaining worldwide market share at a faster pace."

Smith notes that, historically in the technology cycle, competition should be able to replicate and catch up. The iPhone has been dominant in the smartphone market since it was originally launched in 2007, but nearly every phone now is capable of much of what the iPhone offers. Some of these newer handsets with Google's ( GOOG) Android platform operate on 4G networks with faster speeds, which frustrates buyers who were hoping for an iPhone 5 announcement.

"If the technological advantages of the iPhone start to diminish, that would be a point of concern for us," Smith says. "It will happen. It's inevitable. You can't keep coming to market and blowing away consumers. When we see signs of that, stocks historically stall out. The same thing will happen to Apple. We realize that. It's a matter of how long they can ride the horse."

In other words, Smith says, now is not the time for Apple investors to panic. "The setup looks good for the next three or four months," he says. "We're looking at a holiday season when the competition hasn't shown up. They'll continue to take market share. It's not that Steve Jobs has left and people around Apple are just twiddling their thumbs."

Next year, though, has gotten cloudier after yesterday's dud of a presentation. "Next year, you have to be more objective and see what the competition is doing," Smith says. "There's a possibility that the technological advantage will diminish somewhat and you might want to pull back on your weightings."

-- Written by Robert Holmes in Boston.

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