Apple today announced new Apple Watches, a new Apple TV, and new iPhones. The comments below may be attributed to Jan Dawson, Chief Analyst, Jackdaw Research. Jan can also be reached for further comment at jan@jackdawresearch.com or in person at the Apple launch event.
The new Apple Watches with cellular options announced today will further expand the addressable market, as will the further price reductions on the older Series 1 watches, while watchOS 4 will add quite a bit of additional value for existing owners. The cellular connection will mostly appeal to those who frequently exercise without their phones, as did the GPS feature Apple added last year. That’s likely a subset of users, but fixes a big issue for runners and others who feel the need to stay connected while exercising without their phones. Apple Watch should continue to sell well, with shipments growing steadily if not spectacularly over the coming year.
The new Apple TV adds 4K and HDR support in partnership with some but apparently not all the major studios, suggesting that price may have been a sticking point for some of them. 4K and HDR support catches Apple up on this front with other popular streaming boxes. The TV app has also evolved to provide better support for live TV, with the live sports features likely to be more popular. Apple continues to pursue a strategy of becoming the best aggregator for an increasingly fragmented set of TV viewing experiences rather than creating its own video service, at least for now. With Amazon Video coming later this year, Apple will offer the broadest range of video services on the market and will offer aggregation of many of them through the Apple TV.
Apple announced three new iPhones today, but much of the attention will one on the new iPhone X. However, since the majority of iPhone buyers will be buying the iPhone 8 and 8 Plus, it’s worth talking about those quickly. By themselves, the iPhone 8 and 8 Plus would be comparable or even better upgrades than the iPhone 7 range was last year, with bigger hardware design changes and some other big improvements in features and functionality. Apple is raising the prices of these devices slightly to reflect that, but in practical terms it will make very little difference to the monthly payments most consumers make to pay for smartphones. Many buyers will be perfectly happy to buy these phones, and they will account for the vast majority of sales in the December quarter.
But of course Apple also introduced the iPhone X, and this is a far bigger upgrade, with new screen technology, a new user interface for unlocking, multitasking, and plenty more. That’s going to be the object of desire for many users and the challenge for Apple will be whether they’re done enough to make the iPhone 8 range compelling for the majority who won’t be wiling or able to spend the additional money to get the iPhone X. What Apple doesn’t want is for people to want the best but not be able to afford it and therefore hold onto their existing phones rather than buying what they consider second best. Its earlier financial guidance for the September quarter also suggests that it’s very confident both in strong demand for the iPhone 8 and 8 Plus and its ability to produce considerably more in the first couple of weeks on sale than it did last year.
Beyond the actual products, it’s worth noting how much Apple emphasized its own chips in today’s announcement, from its latest A-series chips to its own GPU, neural engine, and more. Chips have been a huge advantage for Apple for years now, and it keeps extending that lead by creating its own chip technology to power its own experiences rather than relying on off-the-shelf technologies as its Android competitors have to. That’s enabled ARKit, Portrait Mode, and many other new features from Apple over the last few years, which continue to be one of its biggest differentiators.