Apple Reveals Subscription Podcasts, Latest iPad Pro
April 20 2021 - 2:37PM
Dow Jones News
By Tim Higgins
Apple Inc. revealed a subscription podcast service and small
wireless tags to track gadgets, two new products aimed at rivals
that have complained the iPhone maker uses its strength to compete
unfairly.
The rollout, during Apple's first product event of the year,
also featured a shelf of updated devices, including a further
expansion of the company's in-house-designed processor chips to the
iMac desktop computer. The chip change was part of a full iMac
redesign, the first to Apple's popular desktop in years.
Apple also said it is bringing its new chips to the high-end
iPad, making the tablet 75 times faster than its first iPad. The
iPad Pro also comes with a brighter screen and speedy
fifth-generation, or 5G, connectivity.
The Cupertino, Calif.-based company began offering the faster 5G
technology in its newest iPhones last fall, helping juice sales for
the device. iPad sales rose 41% in the October-to-December quarter
to $8.4 billion, and other Apple products such as its Mac
computers, watches and wireless headphones also saw sales increases
because of the pandemic.
The tech giant topped $100 billion in quarterly sales for the
first time as consumers flocked to new iterations of the iPhone and
other devices.
Analysts surveyed by FactSet, on average, expect iPad sales to
fall in the second half of the fiscal year compared with a year
ago, but still finish 2021 in September better than a year
earlier.
The latest iPad Pro will be available to order April 30. The
device starts at $799, while the larger version with its brighter
screen will begin at $1,099. The iMac, which will be offered in a
variety of colors, begins at $1,299. Apple's new M1 chip will allow
the desktop to be much slimmer, according to the company.
Some are bullish that the more powerful iPad could attract
buyers. Dan Ives, an analyst for Wedbush Securities, told investors
in a note that there could still be room for more growth, saying he
estimates only about 40% of iPad users have upgraded in the past
year.
The rollout of a paid subscription option within Apple's podcast
app comes with a revamp of that app.
It underscores a core strategy that Chief Executive Officer Tim
Cook has been championing before the pandemic, one focused on
building out the company's digital services to fuel growth and keep
consumers even more closely tied with Apple's ecosystem. The tech
giant's services division generated almost $16 billion in sales in
the quarter that ended in December, an almost 25% increase from the
same period the previous year.
Mr. Cook's services-driven strategy will put Apple in closer
competition with partners that have grown more vocal in complaints
about how the company uses its might in ways they say are
anticompetitive.
The European Union has opened formal probes into Apple in part
after Spotify Technology SA accused the tech giant of abusing its
control over how apps appear in its App Store. Apple has denied
wrongdoing. Spotify has complained for years that Apple aimed to
limit competition to benefit its own streaming service.
In 2005, Apple helped make podcasts mainstream by bringing the
medium to iTunes. The format has taken off since then with
listeners and advertisers, and tech companies have been scrambling
recently to beef up their offerings.
Spotify has been adding subscribers thanks to its focus on
podcasts, spending big money to lock in high-profile talent such as
Joe Rogan. Amazon.com Inc. has signaled its expanded interest in
podcasts by purchasing Wondery.
Spotify is set to overtake Apple in terms of U.S. podcast
listeners this year, according to a forecast from research firm
eMarketer. An average of 28.2 million people in the U.S. will
listen to podcasts on Spotify at least monthly, while 28 million
will listen through Apple Podcasts, eMarketer said.
In 2019, Apple's market share was 34% of podcast listeners,
which is set to fall to 23.8% in 2021, according to eMarketer.
The tracking device revealed Tuesday had been expected for a
while. Called AirTag, the devices can be affixed to users' bags or
other items to track with their iPhone, similar to a product by
Tile Inc.
Tile has complained that Apple has made it harder to use its
service in advance of the expected AirTag rollout. The company's
allegations were part of a Congressional report last year on big
tech companies' practices that some have deemed unfair. Apple has
denied wrongdoing.
"We welcome competition, as long as it is fair competition,"
Tile CEO CJ Prober said in a statement. "Unfortunately, given
Apple's well documented history of using its platform advantage to
unfairly limit competition for its products, we're skeptical."
Apple will begin taking orders for AirTag on Friday, with the
products arriving April 30. They are selling for $29 apiece or as a
four-pack for $99.
--Benjamin Mullin contributed to this article.
Write to Tim Higgins at Tim.Higgins@WSJ.com
(END) Dow Jones Newswires
April 20, 2021 14:22 ET (18:22 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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