Apple (AAPL) on Tuesday introduced two new iPhones, its long-awaited Apple Watch and a mobile payment system as part of a marketing blitz aimed at drumming up consumer excitement. Now the question is whether the new gear will live up to the hype.
Speaking from the Flint Performing Arts Center in Apple’s hometown of Cupertino, Calif., Apple marketing chief Philip Schiller kept the audience waiting beyond the scheduled 1 p.m. ET start of the marketing extravaganza, a fitting delay for a company that has kept its fans waiting for a new product.
First up was the company’s new larger, thinner iPhone 6, which features an aluminum body and glass front that curves around the sides. The base model comes with a 4.7-inch screen and the other, dubbed the iPhone 6 Plus, has a 5.5 inch-screen. The iPhone 6 screen has over 1 million pixels, while the iPhone 6 Plus has over 2 million pixels, Schiller said, emphasizing what he called the the devices’ “stunning display.”
Gesturing toward giant photos of a lizard and a butterfly projected on-stage, Schiller also highlighted the new iPhone’s enhanced camera, which he said includes image-stabilization functionality.
With a two-year contract, the iPhone 6 will cost $199 for a model with 16 gigabytes of memory, $299 for the 64GB phone and $399 for 128GB. The iPhone 6 Plus is priced at $299 (16GB), $399 (64GB) and $499 (128GB).
The technology giant has much riding on the popular reception to its new iPhone, sales of which drive most of the company’s profits and which account for more than half of its revenue. But any new offerings from Apple may be even more important, as the company seeks to entice customers with an expanded lineup of products and services.
To that end, Apple CEO Tim Cook introduced the company’s new mobile payments tool, called Apple Pay, which aims to let users make purchases from their iPhones. He noted that Americans make roughly 200 million payments per day, but called the process “antiquated.” With Apple Pay, consumers can pay for goods without sharing credit card, address and other personal information with a merchant, Cook said.
Cook also presented Apple’s new wearable computer, the Apple Watch, describing it as the “next chapter” in the company’s history and a “breakthrough.” The watch, which is available with six interchangeable bands, comes in stainless steel or 18K gold. Users navigate by tapping and swiping the watch face, as well as through a crown on the right side of the watch that brings up apps.
Although Apple has posted solid financial results this year, investors and even some of the company’s famously rabid fans have seemed underwhelmed by Apple’s recent product launches. Its latest iPhones and iPads, while commercially successful, have been deemed only incremental advances — pleasing refinements that remain well short of the great leaps forward Apple has made in the course of growing into the most valuable company in the world.
That’s of particular concern for a company that, under co-founder and CEO Steve Jobs, was vaunted for its design prowess and ability to discern consumer tastes even before those were fully formed. Apple is also eager to reclaim market share taken in recent years by Samsung and other makers of mobile phones based on Google’s (GOOG) Android platform.
Who are those people lining up for the iPhone 6?
For Cook, a move into wearable devices could prove either a canny move into a lucrative new product segment, or a dead end. The gadget is not only the first developed entirely under his watch since he succeeded Jobs as CEO in 2011, but also a key test when it comes to fostering consumer interest in a technology that to date has failed to dazzle customers.
A critical challenge for Apple, experts say: Building a device that — like the iPod, iPhone and iPad before it — compellingly fills a need users may not know they have. To that end, Apple is touting HealthKit, a software development tool that integrates health and fitness apps while giving consumers control over what health data they choose to share.
Seeking to diversify its business, meanwhile, Apple has also reportedly teamed with financial industry heavyweights including American Express (AXP), Mastercard (MA) and Visa (V) to develop a new mobile payment system for the iPhone 6. According to a recent report by Re/code, the system would used a short-distance wireless technology called near-field communication, or NFC, to enable users to make purchases.
Apple announces new products, software updates
Yet even that foray into mobile commerce amounts to playing catch-up for Apple, with NFC capabilities already offered on many Android phones. Although the company could benefit from expanding into new product segments, in the short-term it remains highly dependent on rolling out devices that push the design envelope and capture the public’s imagination. Indeed, Apple hasn’t developed a new product since launching the iPad four year ago.
Meanwhile, Apple’s top competitors have stormed into a range of areas ripe for innovation, with Google working to develop driverless cars and Facebook (FB) pushing the envelop on virtual reality. That has raised concerns that, without Jobs, Apple risks losing the vision that powered its rise.
Perhaps more than any tech provider, Apple is under the gun to innovate. And to be sure it is trying mightily to do that. Along with expanding into the wearable computing segment, Apple is developing Internet-enabled tools people can use to control lights, thermostats and other parts of their home. For enterprises, meanwhile, the company wants to let employers harness the power of “Big Data” from their Apple devices.
“A lot of other companies don’t need to be as bold on a frequent basis as Apple,” Soumen Ganguly, a director at consulting firm Altman Vilandrie & Co., told CNET News ahead of Apple’s latest commercial launch. “But people have come to expect it from Apple. They’re only as good as their last great product, and we’re four years away from that.”
A sense that Apple may be losing its bite hasn’t kept investors from bidding up its shares, it’s worth noting — the company’s stock has risen nearly 26 percent this year. The shares edged up $1.65, topping $100, shortly after Schiller began the presentation.
By CBS News, September 9, 2014, 1:00 PM