By Tim Higgins
Apple Inc. showed off its latest smartwatch with an ability to
measure blood oxygen as well as a new virtual fitness service and
updated iPads in an online event Tuesday that lacked the pizazz of
the company's standard September product unveilings.
The Cupertino, Calif., tech company held its first virtual-only
product reveal from its headquarters, where past events have
attracted crowds of journalists, employees and guests 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 showed its Watch Series 6, starting at
$399, and a new midtier 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, highly produced event
began. "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
Investor reaction suggested some disappointment with the muted
event as Apple's shares fell during intraday trading before closing
slightly up on the day.
"It was just an OK presentation -- it lacked the normal iPhone
buzz," said Keith Gangl, a portfolio manager for Gradient
Investments, which has more than $2.6 billion in assets under
management, including Apple. "Not disappointed, but I certainly
The expanded digital services Apple unveiled Tuesday will help
bolster the idea that it can drive more revenue from
subscription-based products, Mr. Gangl said.
Those include a streaming fitness offering called Fitness+. The
$9.99-a-month service is connected to the company's watch and aims
to help users track and improve their performance. Fitness+ also
offers virtual workout classes with videos on the iPhone or
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
bundle starts at $14.95 a month and includes Apple Music, TV,
Arcade and iCloud storage.
The new bundling service drew almost immediately renewed
criticism that Apple was unfairly using its power over its platform
against competitors -- claims that Apple has pushed back against as
they intensified this summer.
"Once again, Apple is using its dominant position and unfair
practices to disadvantage competitors and deprive consumers by
favoring its own services," streaming-music service Spotify
Technology SA -- which offers its own bundled packages that include
Hulu -- said in a statement.
Apple defended its new bundle, saying in a statement it would
recommend a plan to customers "that saves you the most money based
on the subscriptions you already have" and highlighted how it could
Family plans were a theme of the day. Apple offered bundled
services for households as well as a new scheme allowing parents to
use their own iPhones to set up smartwatches for children, giving
them access to incoming phone calls while their parents can track
The new products arrive as demand for tablets like the iPad has
surged while the pandemic has upended daily life and left many
people stuck at home. Global shipments of such devices 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 iPad rose 31% during the
April-through-June period compared with a year ago.
Its new smartwatch could help Apple strengthen its already
dominant position in that market, where research firm Strategy
Analytics estimates it held 53% of the global share of such devices
last quarter. Apple has evolved its smartwatch, which first went on
sale in 2015, from a heavily emphasized fashion accessory to a
device more focused on health and fitness.
The ability to track blood oxygen has become a hot feature in
the latest smartwatches, 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.
Blood oxygen data has emerged as a useful tool for people to
gauge the effects of a Covid-19 infection on the lungs' ability to
oxygenate blood. The data has helped some people assess whether to
seek hospital treatment if blood-oxygen readings fall too much.
Normally measured with a device called a pulse oximeter, wearables
manufacturers including Alphabet Inc.'s Google, which owns Fitbit,
have sought to incorporate blood oxygen readings into the latest
Apple said Tuesday that its new top-of-the-line watch uses a
sensor to shine light on blood vessels in the wrist and, combined
with algorithms, calculates the color of blood to enable a reading
of oxygen levels. The data can be produced in 15 seconds, the
Despite the potential for the watch and iPad, the market remains
focused on the next generation of iPhones, for which analysts
predict enormous growth opportunities.
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 17:21 ET (21:21 GMT)
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