SAN FRANCISCO - Apple released Wednesday two new smartphone models, the iPhone 7 and 7 Plus, as the consumer electronics giant seeks to reignite interest in the device that generates a majority of its profits.
The company emphasized changes under the hood of its smartphone while eschewing a major physical redesign, and analysts were mixed over whether the strategy would pay off. Although several noted that Apple has long managed to exceed sales expectations, others said that the smartphone market is too saturated and too mature to generate consumer excitement.
Colin Gillis, director of research at BGC Financial, put it this way: "Soon it will be like buying a microwave -- something people do, but not a major event."
Apple's most controversial decision was the removal of the headphone jack, a technology that has been around for decades, from its smartphone. On social media, some consumers have complained about the inconvenience and worried about the pile of headphones that could eventually become obsolete.
During its presentation at the Bill Graham Civic Auditorium here, Apple responded by presenting a vision for how the new design would be better. Removing the headphone jack allows engineers to pack more features into a lighter, thinner device. New headphones will connect to the iPhone's Lightning port, and Apple said it would include an adapter for use with old headphones. In a mild surprise, Apple also announced a brand new product - wireless ear buds called AirPods that can summon Apple's artificial intelligence assistant, Siri, by touching the outside of the ear bud. The wireless earphones can also detect whether you are using an iPhone or an Apple Watch and switch to the right device automatically.
The AirPods offer five hours of battery life and are housed in a case that can charge them further. They will retail for $159 when they become available in October.
The iPhone 7 and 7 Plus offer better battery life, more memory, water resistance and a more powerful camera. On the iPhone 7 Plus, Apple's largest model, the smartphone includes a second camera that acts as a telephoto lens. And other than new black colors, the external design appears very similar to the previous iPhones. Many Apple watchers predict that a major design update will come next year at the 10-year anniversary of the first iPhone's release.
The iPhone 7 and iPhone 7 Plus are priced at $649 and $769 with 32 gigabytes of storage. That is twice the memory of Apple's previous base models. The company also introduced a jet-black color that will be available only for the 128- and 256-gigabyte versions. The new models also should be 120 times faster than the first iPhone, said Apple's worldwide marketing head, Phil Schiller. Preorders begin on Friday, with shipping set to begin a week later.
The company's Apple Watch was also updated for the first time since it was introduced in 2014. Company executives said that it would be "swim proof" and added that the Apple Watch now makes more revenue than any other watch brand in the world except Rolex. Apple also introduced a new material for its smartwatch - ceramic. The lighter material is supposed to be four times harder than stainless steel, said Apple's chief operating officer, Jeff Williams. The Series 2 Apple Watch will also offer GPS and a better processor and will be available in a Nike-branded edition. The original watch will continue to be on shelves for $269. The Series 2 retails for $369.
The design of the Apple Watch, at least in appearance, is nearly identical to the first version. And in many ways, Apple devoted the first part of its presentation to what its hardware could do, rather than to new designs. The company has poured more effort into services such as Apple Music, Siri and smart-home management -- all as a way to make users even more reliant on iPhones, regardless of whether they are the latest model.
Apple made several overtures to runners and swimmers - and made pointed remarks about mobile gaming. Indeed, early in its presentation, Apple invited Niantic chief executive John Hanke, whose company created the hit game Pokémon Go, to show off a new Pokémon Go app just for Apple Watch. The app will be integrated into the device's exercise software and will provide users information about which Pokémon are nearby. The app is expected to be available by the end of the year.
Nintendo also made an appearance, announcing a long-awaited Super Mario game for the iPhone. The game, "Super Mario Runs," is a platformer game in which players can jump over obstacles. Nintendo fans and analysts have long called for the company to release a smartphone game featuring its classic characters. The game will have a fixed price, although Nintendo did not release more details about that.
Apple also showed off new features of its iWork office suite. Users will be able to collaborate with others - already a staple of Microsoft Word and Google Docs -- with iWork.
Reactions about what Apple showed off Wednesday were mixed.
"With today's launch of the iPhone 7, we heard Tim Cook once again make this familiar claim [that this is the best iPhone ever]. Best? Yes. Most exciting? No," said Jefferson Wang, a senior partner at IBB Consulting. "This is what innovation looks like in a mature market."
When it came to the new AirPods, people took to Twitter to express concerns about how the wireless ear buds could easily be lost.
The updated Apple Watch received mostly positive reactions.
"GPS and waterproofing are positive and much-requested features, while the addition of Pokémon Go and new designs including a ceramic variant should reinvigorate interest ahead of the critical fourth quarter sales season," said Geoff Blaber, a vice president of research at analysis firm CCS Insight.
Shares of Apple stock were up 0.61 percent, to to $108.36, at the end of trading Wednesday.