By Tim Higgins 

Apple Inc. showed off its latest smartwatch with faster computing power and an ability to measure blood oxygen on Tuesday as interest rises in such devices among weary, homebound users looking for help tracking exercise and logging hours of remote work and learning.

The Cupertino, Calif., tech company held its first virtual-only product reveal from its headquarters, where past events have attracted enthusiastic crowds of journalists, employees and guests on hand to help hype the latest offerings. People can watch the event on the company's website or its YouTube channel.

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 showed its Watch Series 6, starting at $399, and a new mid-tier offering called Watch SE, starting at $279.

The company is also expected to reveal an updated iPad Air. The latest 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 let Apple showcase products that might get less attention in a normal year. "I think it will highlight the fact that this is an ecosystem of devices," he said. "They all fit together."

Analysts are looking for Apple to begin bundling different services, such as music and videos, it seeks to bolster its software business beyond the iPhone, which makes up about 50% of sales.

Demand for such devices has surged while the pandemic upended daily life and left many people stuck at home. Global shipments of tablets, such as the iPad, increased 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 its midprice iPad could boost sales further 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 market position, 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 wearables market remained flat during that period despite shipments of devices rising 10%. Low-end activity trackers fueled that increase, according to Canalys, which estimates that Apple 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 store closures have hindered sales because customers haven't been able to try on watches. Before Tuesday'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 in 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 3 1/2 years, said Dan Ives, an analyst for Wedbush Securities. He and others are betting the anticipated first offering of a 5G-capable iPhone might lead 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 13:53 ET (17:53 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
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