The biggest problem I see is that it looks completely uninspiring unless they've left major things out of the prototype. Given the specs and possible services, they could have a winner, but the execution just looks half assed again.

-The material needs to be more attractive.
-The bezel needs to lose the crack.
-The theme needs prettier icons, colors and widget backgrounds.
-The screen needs to come just a bit closer to the edge.

I'm willing to take Eldar's opinion of the UI with a grain of salt, but the smartphone market is so fashion-conscious nowadays that offering ten different case colours isn't enough.

Relying on S^4 for the real UI update is good enough, but not if the rest of the design has progressed this little.