Apple Inc unveiled a watch, two larger iPhones and a mobile payments service on Tuesday as chief executive officer Tim Cook seeks to revive the technology company’s reputation as a wellspring of innovation.
The first new product to be developed and introduced under Cook’s reign is a timepiece tethered to the iPhone that will combine health and fitness tracking with communications. It will price at US$349 and go on sale early next year.
Starting at US$349 — US$50 more than the cheapest version of the iPhone 6 with a contract, the lofty price tag might keep some consumers on the sidelines.
Photo: Reuters
It could go up to more than US$1,000 for higher-end editions, IDC analyst Danielle Levitas said.
The Apple Watch can receive phone calls and messages, play music, serve as a digital wallet to pay for goods and monitor heart rates via special sensors. The watches will come in three collections, including a sport edition and an upscale line coated in 18 karat gold.
“People are kind of scratching their heads on this watch, especially the fact that to successfully use the watch and to take advantage of its capabilities, you also have to have an iPhone,” said Daniel Morgan, vice president at Synovus Trust Company in Atlanta.
Photo: AFP
Still, rival watch and wearable device makers will keep a wary eye on Apple. Sony Corp, Samsung Electronics Co, LG Electronics Inc and Qualcomm Inc have already launched smartwatches, albeit without much success.
“Not the knockout some were anticipating. A bit gimmicky also on the health end of the wearable bands market,” said Jon Cox, an analyst of Swiss watch companies who works for brokerage Kepler Cheuvreux in Zurich.
“Not as cool as I feared. Nick Hayek is probably sleeping a little easier tonight,” Cox said, referring to the chief executive of Swatch Group.
Apple shares closed just a tad higher after having risen almost 5 percent before executives trotted out the watch. The stock tends to rise in the run-up to a major product launch, and come under selling pressure afterward as investors cash out.
The watch is unlikely to increase Apple’s top-line. Estimates vary, but IDC expects total global demand of 42 million smartwatches next year. Apple sells that many or more iPhones in a good quarter.
Also on Tuesday, the company took the wraps off a larger, 4.7 inch iPhone 6 and 5.5 inch iPhone 6 Plus. They will support more than 200 telecoms carriers worldwide, including all three in China — a key growth market for the company.
And it introduced a new mobile payments service dubbed “Apple Pay.” Each phone will come equipped with its new payments service, which launches in the US next month and allows users to pay for items in stores with their phones instead of physically presenting their credit or debit cards.
Launch partners include Walt Disney Co, McDonald’s and Whole Foods. The move gives Apple access to a trove of data on how consumers shop in brick and mortar stores, where more than 90 percent of US retail sales are still conducted.
Each new iPhone will come with a “secure element” chip and a near-field communications, or NFC, antenna.
Ben Milne, CEO of Internet payment network Dwolla, wanted to hear a lot more about how Apple will tackle the aging payments infrastructure. Apple Pay should get some level of mass adoption based on the number of iPhones out there, but Apple will have to tackle the current high costs of payment processing to make its new feature more widespread, he said.
“The old architecture that payments is driven on is not up to snuff for the future they want to build,” Milne said.
Meanwhile, Apple might have disappointed many consumers by not putting sapphire glass covers on its new iPhone, although the scratch-resistant material is gradually making its way into mobile devices despite manufacturing challenges and high costs.
Speculation had been rife in the weeks leading up to Tuesday’s unveiling of the iPhone 6 that some models would have the extra protection after Apple partnered in November with US-based GT Advanced Technologies Inc, a mineral crystal specialist, to make sapphire materials for its devices.
Apple said sapphire glass would be used on its first smartwatch. It also continues to use the durable material to cover the iPhone’s camera lens and home button, but gave no hints as to if, or when, the glass would be used on iPhone screens.
Sapphire glass is the hardest material in nature after diamonds. It is used in LED lighting, high-end jewelery and military equipment such as submarine and rocket windows.
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