Apple Event: New Watch, iPad Expected as iPhone Seen Coming Later
September 15 2020 - 5:59AM
Dow Jones News
By Tim Higgins
Apple Inc. is expected to show off its latest smartwatch and
iPad Tuesday amid an uptick of interest in such devices by weary,
homebound users looking for help tracking exercise and logging
hours of remote work and learning.
The Cupertino, Calif., tech company will hold its first
virtual-only product reveal at 1 p.m. New York time from its
headquarters, where past events have attracted enthusiastic crowds
of journalists, employees and guests on hand to help hype the
latest offerings.
Chalk up Apple's keynote event to another annual rite changed by
the coronavirus pandemic. Instead of Chief Executive Tim Cook
unveiling the company's latest flagship iPhone as he has done every
September since 2012, Apple is expected to focus on the new Watch
Series 6 and iPad Air. The newest smartphone is expected to be
revealed next month after Covid-19 related delays pushed back
production.
Analysts such as Thomas Husson from Forrester Research Inc. say
not having to tout the iPhone will allow Apple to highlight
products that may get less attention in a normal year. "I think it
will highlight the fact that this is an ecosystem of devices," Mr.
Husson said. "They all fit together."
Analysts are looking for Apple to begin bundling different
services, such as music and videos, as the company works to bolster
its software business beyond the iPhone, which makes up about 50%
of sales.
The new products arrive as demand for such devices has surged
while the pandemic upended daily life and left many people
quarantined at home.
Global shipments of tablets, such as the iPad, surged 26% last
quarter compared with a year earlier, according to research firm
Canalys, which attributed the increased industry demand on remote
work, learning and leisure. Apple doesn't break out unit sales but
said revenue from the device rose 31% during the April-through-June
period compared with a year ago.
An update to Apple's midprice iPad could boost sales further for
the company among buyers seeking a more affordable option, analysts
said. The more expensive iPad Pro was updated earlier this
year.
The new smartwatch could help strengthen Apple's already
dominant position in the market, where research firm Strategy
Analytics estimates it held 53% of the global share of such devices
last quarter.
In general, revenue in the North American wearable market
remained flat during that period despite shipments of devices
rising 10%. The surge was fueled by low-end activity trackers,
according to Canalys.
While Apple doesn't break out sales by unit, Canalys estimates
the company shipped 3.2 million watches in the past quarter in
North America, a 9% rise from a year earlier. The growth was
attributed to a 30% boom in the lower version of Apple's line, the
Watch Series 3.
Mr. Cook has said sales have been hindered by the closure of
stores because customers have been unable to try on watches. Before
today's event, starting prices for the Watch ranged from $499 for
the latest Series 5 version with cellular connection to $199 for
the basic Series 3.
Apple has evolved the smartwatch, which first went on sale in
2015, from a heavily emphasized fashion accessory to a device more
focused on health and fitness -- attributes expected to be beefed
up by the newest version.
The ability to track blood-oxygen, skin temperature and
breathing-rate are among the hot features in smartwatches at the
moment, said Neil Mawston, analyst for Strategy Analytics.
"Health care and fitness are top of mind for consumers right
now, so an updated watch that addresses those features will prove
popular for Apple, " he said in an email. "Consumers are
increasingly looking for devices that can reliably track their
basic health and surface problems as early as possible."
Despite the potential for the watch and iPad, many will be
looking for clues about the next iPhone. The potential for the next
generation of iPhones is enormous, analysts predict.
Almost 40% of the 950 million iPhone customers haven't upgraded
to a new device in the past three-and-a-half years, said Dan Ives,
an analyst for Wedbush Securities. He and others are betting the
anticipated first offering of a 5G-capable iPhone might be the
trigger for getting customers to replace those older devices.
"I believe it translates into a once-in-a-decade type upgrade
opportunity for Apple," Mr. Ives said. He called today's event "the
drum roll to the main event."
Write to Tim Higgins at Tim.Higgins@WSJ.com
(END) Dow Jones Newswires
September 15, 2020 05:44 ET (09:44 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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