Yesterday’s eagerly anticipated Apple Inc launch received a muted response from the investment markets. But techies were delighted at the latest innovations, spearheaded by the new iPhone 6S, a bigger iPad and a revolutionary change to long-neglected AppleTV. It will take time to fully absorb, but early indications are that it is in the television space where the impact of yesterday’s shindig will be most felt. Network television has been under attack from disruptive technology for some time, but so far it has managed to retain the lion’s share of global advertising revenues. But as viewers move online or to alternatives like Netflix and this rejuvenated AppleTV, the establishment’s dam wall is creaking. Below is how the Financial Times of London’s team in California saw yesterday’s San Francisco bash. – Alec Hogg
by Tim Bradshaw and Richard Waters in San Francisco
Apple is making radical changes to its Apple TV and iPad, two product lines that have underperformed its iPhone in recent years, as it sought to dispel doubts about the momentum left in its flagship smartphone.
A supersized, 12.9-inch iPad – including a keyboard case and a $99 stylus – accompanied the iPhone 6S launch, alongside a new Apple TV set-top box featuring a motion-sensitive controller, Siri voice control and App Store.
Chief executive Tim Cook set out to prove that there was room left to innovate in the saturated smartphone market, weeks after Apple reported 35 per cent growth in the number of iPhones sold over its last quarter.
Sales of the iPhone in China had risen by 75 per cent in the past year, he said, addressing mounting concern among investors about Apple’s prospects in its most vital growth region.
To reinvigorate US sales, Apple also unveiled a new financing scheme that will allow its most loyal customers to pay $32 a month for annual iPhone upgrades and extra insurance. The move follows a wider shift away from subsidies by US mobile carriers but analysts said it could provide Apple with a significant new recurring revenue stream.
“How do you follow a success like this? I’ve got that question a few times,” Mr Cook said of the iPhone’s recent growth. “While they may look familiar, we have changed everything about these new iPhones.”
Billed as the “next generation of multitouch”, a new “3D Touch” interface detects the degree of pressure applied to the iPhone’s screen to create new shortcuts, such as “peeking” into emails and jumping straight to a selfie camera.
While the iPhone’s external casing did not see any changes, internal updates include a new camera, faster fingerprint reader and accelerated A9 processor.
Geoff Blaber, analyst at CCS Insight, said that despite only offering “incremental improvements” Apple had “proven many times over that iteration wins when underpinned by the Apple brand and ecosystem”.
“3D Touch is an innovative addition delivering enhanced user experience that differentiates iPhone from homogenous smartphone category,” he said.
While less significant than the iPhone to its financial performance, Apple’s biggest moves into new product territory were reserved for the iPad – which has seen sales decline in the past two years – and the Apple TV.
“This is the future of television, coming now,” Mr Cook said, unveiling Apple’s third attempt to dominate the living room after first launching its set-top box back in 2007.
While Apple is following the likes of Google, Amazon and Roku by bringing apps, voice controls and a universal search that scans content from different providers, the iPhone’s popularity brings with it greater support from app developers.
“With 11,000 existing developers and a tvOS built on iOS, Apple stands to disrupt TV by exploiting its strength in mobile,” said Mr Blaber. “Broadcast content remains the challenge.”
Priced at $150, the new TV operating system, tvOS, is based on iOS and will see apps as varied as Netflix and HBO on-demand TV, Star Wars and Guitar Hero games and even ecommerce from the likes of Airbnb and Gilt.
Apple has also revamped its vision of how tablet computers should fit into working life, edging close to ideas pioneered by arch-rival Microsoft as it struggles to revive flagging sales of its once groundbreaking iPad.
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Company executives showed off a new iPad Pro with a larger screen at an event at the Billy Graham Civic Auditorium on Wednesday, including a stylus to write on the screen and detachable keyboard – accessories that the company once ridiculed when it first introduced the iPad as a simple, stripped-down touchscreen device.
If it needs a stylus, you have done it wrong. “Steve Jobs” Steve just rolled over in his grave today ….
— Project 46 (@DJProject46) September 10, 2015
Steve Jobs, whose purist vision was instrumental in the original iPad, launched in 2010, once said of other companies’ devices: “If you see a stylus, they blew it.”
Revenues from iPad fell 24 per cent in the first nine months of Apple’s latest fiscal year, prompting the company to rethink the capabilities of the device, particularly for office workers who have been slow to adopt it. Apple ha also sealed partnerships with IBM and Cisco in an attempt to make the devices fit better into traditional corporate IT.
The iPad Pro, which is due to go on sale in November, has a 12.9 inch screen compared to the previous 11 inches, making it easier for workers to multitask by running two “windows” next to each other – something Microsoft had already done.
In a startling sign of how far both companies have moved from an era of heated rivalry, a Microsoft executive appeared on stage to demonstrate the capabilities of the latest iPad Apple software, and to explain how it works with Microsoft’s widely-used Office software.
(c) 2015 The Financial Times Ltd.
