Apple on Tuesday unveiled new versions of its watch and iPad at a range of price points, as it aims to repeat a feat it managed with the iPhone and lure in a wider range of customers.
A keynote event on Tuesday underscored how the $2tn tech giant is focused on selling subscription services to a wider base of customers, such as a new “Apple One” bundle including storage, games, music, movie streaming and more.
Among its hardware announcements was the Apple Watch 6, starting at $399, which now has the ability to measure blood oxygen levels and can track elevation.
It also revealed a mid-priced Apple Watch SE, starting at $279, which can be paid for over 24 months. Series 3, remaining at $199, is still the entry-level watch.
For the first time Apple now had a clear “good, better, best” tiering structure for its watch customers, delivering choice at a range of prices, said Leo Gebbie, analyst at CCS Insight.
Apple is already the global leader in smart watches, with a 40 per cent market share in the second quarter, according to Canalys.
Still, only about 10 per cent of Apple’s almost 1bn users have an Apple Watch, so convincing customers it was an essential companion to the iPhone or other products was a priority, said Paolo Pescatore, analyst at PP Foresight.
“Apple is extending the proven iPhone segmentation model across categories by having a hero product alongside an affordable option,” he said, pointing to the success of the iPhone SE, an entry-level smartphone first introduced in 2016 and updated in April.
Apple is extending the proven iPhone segmentation model across categories by having a hero product alongside an affordable option
A similar strategy is at work for the iPad, a division whose revenue soared by almost a third to $6.6bn last quarter. The iPad comes in four models, with base costs ranging from $329 for a 10.2 inch screen to $999 for the iPad Pro 12.9-inch display.
On Tuesday Apple unveiled a revamped iPad Air, which it is increasingly positioning as a true replacement for a laptop.
The Air, starting at $599, is the first product to feature Apple’s newest “A14 Bionic” chip, will come in five colours and be available next month.
“When you compare the new iPad Air with A14 to the best-selling laptop in its price range — a device almost three times thicker and four pounds heavier — the new iPad Air has up to two times faster graphics performance,” said Tim Millet, vice-president of platform architecture.
Analysts said the strategy behind Apple’s latest hardware launches was about signing up new users for an ever-growing array of services. It services division revenues were $13.2bn last quarter, up 162 per cent from five years ago.
Apple One, unveiled on Tuesday, is a new subscription plan for individuals and families giving monthly access to a variety of Apple services including iCloud storage, arcade games, music, television and movie streaming, and news.
The company also announced Fitness Plus, a workout-streaming and health service costing $9.99 a month which looks set to rival the guided health programme offered by FitBit at the same price point. It may also prove a challenge to Peloton Digital, the workout-from-home app that costs $12.99 a month and does not require Peloton’s bike or treadmill.
Mr Pescatore called Apple One “a masterstroke” as Apple moves to “drive value from users and the untapped opportunity, families”.
Another service announced was Family Setup, which will allow parents to link multiple Apple Watches to one iPhone, so they can keep tabs on their children.
Hubert Palan, chief executive of Productboard, which makes product management software, said this was “an awesome way for Apple to hook more people into their ecosystem”, though it comes at the risk of lower iPhone sales.
“Parents who are mostly buying iPhones for their kids to reach them, track them and keep them safe can now just get them the watch,” he said.
Overall, the challenge for Apple was to showcase new hardware beyond the iPhone without the event feeling anticlimactic, said Jeff Fieldhack at Counterpoint Research, and in this respect Apple did a “tremendous” job.
The pre-recorded event offered no clues about the upcoming 5G iPhone, expected to debut next month, nor did it mention over-the-ear AirPods or a lost-items tracker expected in the near future.