By Tim Higgins
Apple Inc. showed off its latest smartwatch with faster
computing power and an ability to measure blood oxygen as well as
updated iPads on Tuesday as interest rises in such devices among
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, with fewer
abilities than the high-end version and starting at $279.
"It's been gratifying to see the important role our products
have played in helping people come together, carry on and move
forward," Mr. Cook said as the one-hour event began, with Apple
Park's lush background behind him. "We know that life won't always
be like this, and we're all looking forward to better days."
The company also revealed an updated iPad Air, starting at $599,
with a new touch-ID button on the side that unlocks the screen and
faster computing power. The latest smartphone is expected to be
revealed next month after Covid-19-related delays pushed back
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."
Illustrating how Apple is working to expand further into digital
services, the company announced a streaming fitness service called
Fitness+. The $9.99-a-month service is connected to the company's
watch, aiming to help users track and improve their performance.
Fitness+ also offers virtual workout classes with videos on the
iPhone or television.
The company also detailed a new bundling of digital
subscriptions dubbed Apple One as it works to bolster its software
business beyond the iPhone, which makes up about 50% of sales. The
new bundle starts at $14.95 a month and includes Apple Music, TV,
Arcade and iCloud storage.
The new products arrive as 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
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
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 14:39 ET (18:39 GMT)
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