The trillion-dollar company introduced three large-screened iPhones at its annual fall product event, hosted at its headquarters in Cupertino, Calif. The record-setting price of the largest phone — starting at $1,099 — is key to Apple’s strategy as smartphone sales growth stalls.
The newest smartphones are called the iPhone Xs, iPhone Xs Max and the iPhone XR. All have the same basic design as last year’s iPhone X, with fronts that are nearly all-screen – with the exception of a notch cut out from the top to house a front-facing camera — and lack a home button. The phones announced Wednesday are, collectively, the largest and most expensive iPhone lineup Apple has ever announced.
Apple has had a financially successful year, becoming the first publicly traded U.S. company to hit a trillion-dollar valuation. Apple chief executive Tim Cook said Wednesday that the company is about to sell its 2 billionth iOS device. It marked the second time that the company has launched new iPhones from the Steve Jobs Theater, named for Apple’s late co-founder and chief executive.
But the tech giant has had to adjust its strategy to keep revenue and profit growing. Fewer people are rushing out to snap up new premium smartphones each year, opting instead to hold on to their phones for longer. That’s slowed down growth for many smartphones, including the iPhone, and Apple has moved to offset slowing sales growth with higher-priced phones.
Apple’s main competitor in smartphones, Samsung, has also tried this strategy by setting the price for its Galaxy Note line in the $900s. But it hasn’t worked as well for Samsung as it has for Apple, which sold the iPhone X last year for $999.
The iPhone X is the top-selling new phone in the world, Cook said Wednesday. But the world’s most-used iPhone right now is still the two-year-old iPhone 7, according to data analytics firm Mixpanel, and more people have the iPhone 6S than the iPhone X.
That leaves a lot of potential for upgrades. But the new lineup of phones has few technological advances over last year’s models, which introduced the all-screen display for the first time. Apple has typically operated an on-and-off-year cycle.
Shares of Apple closed down a little more than one percent Wednesday, at $221.07 per share.
The iPhone Xs Max, which has a 6.5-inch display, is now Apple’s priciest phone. The most expensive model will cost $1,449 — roughly $500 more than a MacBook Air laptop.
The iPhone Xs will be the same price ($999) and size as its predecessor, sporting a 5.8-inch screen.
Apple is also releasing the $749 iPhone XR, for those who balk at a four-digit price tag. The phone looks similar to the iPhone X, but has a 6.1-inch display and uses a different type of screen that is less expensive for Apple to produce.
Consumers who have held onto their older phones may be particularly drawn to the XR, said analyst Patrick Moorhead of Moor Insights. “They get the edge-to-edge display [and] the Apple experience at an affordable price.”
Most of the major updates to the smartphones were technical and incremental. Apple invited several video game developers on stage to showcase improvements to the graphics and processing performance of the phones.
It also has improved the cameras in the new phones and added a feature that allows people to refocus their pictures after they take them. Samsung has offered a similar feature on its Note devices for two years.
As Apple shifts its gadgets to having longer lifespans, the company will have to offer compelling and useful services to continue making these devices a good value for consumers, said Forrester analyst Thomas Husson in a note to investors after the presentation. “Apple has a key challenge in the next 18 to 24 months: Apple has to build a more frequent, deeper, emotion-rich, digital lifestyle relationship with consumers.”
The company’s also been putting more investment into its software and services, such as the App Store and a growing entertainment streaming business. Chief executive Tim Cook has said he wants to double the revenue of its services business by 2020. In its last earnings report in July, the services business reported $9.5 billion in quarterly revenue; annually, the services business itself would be a Fortune 100 company, Apple said.
Apart from iPhone updates, Apple also introduced a redesigned Apple Watch, increasing the screen size by nearly one-third. The Watch has quickly become the spearhead for Apple’s push into health and fitness. The company announced that the Watch has received Food and Drug Administration approval for a new feature that allows the smartwatch to act as an electrocardiogram.
Shares of Fitbit fell nearly 7 percent after Apple’s announcement.
Apple did not announce updates for some products, such as the iPad Pro or the wireless AirPods headphones. The company did not offer an update on the AirPower, a wireless charging mat it first announced last year but has not yet begun selling. It also did not refresh its MacBook Air or the Mac Mini -- two products that are overdue for a refresh, Moorhead said.
“Quite frankly, these products are no longer competitive with any of the premium Windows competition,” Moorhead said.
2:51 p.m. A few more things — and that’s a wrap!
CEO Tim Cook closed the presentation with a couple of small updates. Apple is updating HomePod to let people search for songs by lyrics. People will also be able to create multiple timers on the smart speaker, a feature competitors have added.
The company is also releasing an update to its macOS system for computers, which people can download on Sept. 24.
2:49 p.m. Apple touts its environmental credentials
Lisa Jackson, Apple’s vice president of environment, policy and social initiatives, took the stage to talk about the company’s commitment to sustainability in one of the longest product-launch presentations on the topic in years.
She touted Apple’s promise to someday make its products without mining new material. Apple has also made a robot, dubbed Liam, that can disassemble old iPhones faster than a human for recycling.
2:44 p.m. One more iPhone — the iPhone XR — and prices
The iPhone Xs will start at $999, while the Xs Max will begin at $1,099. Preorders start Sept. 14, and they will be in U.S. stores Sept. 21.
Apple is also introducing a $749 new phone, the iPhone XR, which Apple’s worldwide marketing lead Philip Schiller said is intended to bring iPhone X technology to a broader audience.
The aluminum phone comes in six colors: white, black, blue, coral, yellow and red. The iPhone XR has no home button but will vibrate to simulate a button press. It has a 6.1-inch edge-to-edge display. That’s similar in design to the iPhone X but uses a screen technology, LCD, that Apple’s used for its older models and is less expensive to produce.
The XR has a 12 megapixel rear-facing camera and has Apple’s Portrait Mode — unlike the iPhone 8, the cheapest new iPhone Apple announced last year. It is supposed to have 90 minutes more battery life than the iPhone 8 Plus.
The new versions of the phones mean prices drop on older models. The iPhone 7 will now start at $449 and the Phone 8 at $599.
2:15 p.m. The meaning of “s” in Xs
Apple so far hasn’t shown any major new phone features for its iPhone Xs line, with executives mostly focusing on faster processing power, improved speakers and better graphics performance. Apple has traditionally used “s” models to make more subtle and technical improvements. But those phones usually had at least one major model-defining feature to attract potential upgraders — and justify their higher prices.
Here come the iPhones. “iPhone X has changed the industry,” Cook told the crowd, before promising another upgrade. He then immediately introduced the iPhone Xs — that’s “ten-ess,’ for those curious about the pronunciation.
The Xs builds on the trends Apple set with last year’s iPhone X, with the same nearly all-screen front and characteristic notch.
The iPhone Xs has a 5.8-inch screen, which is the same size as the iPhone X; the iPhone 8 Plus has a 5.5-inch display. The Xs comes in gold, silver and space gray.
But that’s not all. Worldwide marketing lead Philip Schiller also announced the iPhone Xs Max, which has an iPhone X-style 6.5-inch display and revamped speakers that Apple promises produce better stereo sound.
Both sport Face ID, which Apple says is the”most secure facial authentication ever in a smartphone.” Both phones can have up to 512 GB of storage.
The phones have had an internal revamp as well, that promise better graphics performance and a “neural engine” that ups the iPhone’s machine learning capabilities.
Apple hasn’t unveiled the prices of the new phones yet — but expect them to be expensive.
1:46 p.m. Apple Watch Series 4
Apple unveiled Series 4 of its Apple Watch, with a larger display and a new electrical heart sensor that further morphs the tech accessory into a health device. It costs $399 (and up) and it goes on sale Sept. 14, with delivery Sept. 21.
While the overall volume of the new watch is smaller, the screen pushes closer to the edges, offering about 30 percent more usable screen area. Apple redesigned its watchOS software and watch faces that can display up to eight “complications,” or tiny app displays. We’ll have to see if that helps or just makes the Apple Watch more, well, complicated.
The addition of the electrical heart sensor to the back of the watch allows it to take an electrocardiogram, which produces data the owner can share with a doctor. The watch can also detect — and alert you to — a low heart rate or atrial fibrillation. Apple says it received Food and Drug Administration clearance for the ECG function (also known as an EKG function), the first time that’s been granted to a mainstream direct-to-consumer device.
There are also a few other tweaks to the hardware that don’t affect the device’s battery life, which Apple says is 18 hours. The speaker is louder, and the crown on the side of the Watch has haptic feedback that jiggles a little when you touch it. The antennas on the cellular-connected model have been moved to improve reception, a problem with previous generations.
1:11 p.m. Tim Cook opens the event
Apple chief executive Tim Cook is onstage to kick off the day’s presentation and give his usual update on how Apple’s business is doing, revealing that Apple is about to hit a new milestone.
“We are about to ship our 2 billionth iOS device,” Cook tells the audience at the Steve Jobs theater.
Cook said today’s event will outline how the company is trying to make devices even more personal.
12:58 p.m. The thing about surprises
We’re not really expecting many surprises today. That’s not just because of the extraordinary number of leaks this year about the specs — and even the names — of Apple’s new products. These product launch events have lost much of their wow factor after a decade. Smartphones are more important in our lives than ever, but slight annual iterations, like better cameras and bigger screens, are now expected. It’s one reason Americans are holding on to their phones longer before upgrading.
12:09 p.m. Steve Jobs Theater and the “spaceship”
Media from around the globe are starting to filter up to the Steve Jobs Theater, which gives event attendees a clear view of Apple’s main “spaceship” headquarters building. Guests will wait here until just before the presentation starts at 1 p.m. Eastern time — giving everyone plenty of time to talk about what’s expected today and what it means for Apple.
There’s no doubt that Apple has had a financially successful year, becoming the first publicly traded U.S. company to hit a trillion-dollar valuation. But it has had to adjust its strategy to keep its revenue and profit growing. Fewer people are rushing out to snap up new premium smartphones each year, opting instead to hold on to their phones longer. That has slowed down growth for many smartphones, including the iPhone. To compensate for selling fewer new phones each year, Apple has been releasing new phones with higher price tags — most notably last year's $1,000 iPhone X, which will probably see its line expanded Wednesday.
The company has also been putting more investment into its software and services, such as the App Store and a growing entertainment streaming business. Chief executive Tim Cook has said he wants to double the revenue of its services business by 2020. In its last earnings report in July, the services business reported $9.5 billion in revenue; annually, the services business itself would be a Fortune 100 company, Apple said.
12:04 p.m. What to expect
Apple is expected to release three models of the iPhone, based on analyst reports, and all at pocket-stretching sizes.
An apparent leak on Apple’s website, unearthed by tech site All Things How, seemed to confirm the new phones will be called the iPhone XS, XS Max and XR.
Analysts expect a new version of the iPhone X, with the same 5.8-inch screen that Apple first released last year. The iPhone XS Max, according reports from 9 to 5 Mac and Bloomberg, is expected to have a 6.5-inch screen and a hefty price tag.