What Apple Announced in the Steve Jobs Theatre

Apple had its yearly pilgrimage to the orchard above the Apple campus to announce new hardware. As usual, the Steve Jobs Theatre was packed with both media and Apple employees. Going in, the key question was would Apple be able to maintain the enthusiasm of its base despite being behind many of its competitors with 5G?

Let’s begin with the announcements.

Apple Arcade and Apple TV+:

Unlike previous years, Apple kicked off the day with its announcements on its new service offerings – Apple Arcade and Apple TV+. Unveiled earlier this year, Apple finally revealed details on the launch date and pricing for the new services. Arcade will launch September 19 in 150 countries and is priced at US$4.99 per month for unlimited access. Access will be through the Arcade tab on the App Store for the iPhone and iPad, while Apple TV users get a separate Arcade app. Apple does have a growing brag list of developers. Although, for hardcore gamers, the experience is still lacking. At US$5 per month, it will be sticky for much of its base.

Apple TV+ will be available November 1 and is also priced at US$4.99 per month—a cost that caught most by surprise and sent Netflix stock downward. It is early, but this is probably not an either-or choice. Apple has a growing portfolio and will have the cash to build its own original content. It does not have to compete with Netflix. At US$5 per month, it needs a couple of quality hits from many to give it a try. Again, further stickiness for its installed base. However, Apple is not restricting access to the service to only its own hardware users. Apple TV+ will be available through the Apple TV app on select Samsung smart TVs and will come to the Amazon Fire TV, LG, Roku, Sony, and Vizio platforms in the future.

In addition to a low monthly price, Apple is including a year’s subscription to Apple TV+ with new device purchases. This will help it overcome any potential resistance from content producers that might be put off investing time and effort in exclusive content for Apple on the basis of limited distribution potential.

iPad 9.7:

Apple announced its seventh generation iPad. New is the iPad 9.7, which ships on September 30. Key brags of the new iPad are the A10 Fusion chip, which Apple stated sports a 2x performance improvement. There is also deeper iPad Pencil integration.

Some of the marketing focused on the OS, which has improved multi-tasking and an ability to ‘fan out’ open applications or ‘glide over’ them. The cost will be US$329 with an ‘education’ version priced at US$299. This is still a premium over Android options, but the hardware is quite elegant, and the display is best-in-class. A key enhancer is the ‘smart connector’, which is a smart keyboard attachment with a classy protective cover.

Apple Watch 5:

Apple Watch continues to differentiate with new health applications. All things irregular within heart health remains a focus area. The company has also added a hearing study and how volume and electronics impact daily hearing health. Apple also announced a women’s study focusing on infertility and osteoporosis.

Key features of Apple Watch 5 include 18-hour battery life, improved and brighter display, an ‘always on’ display option if raising wrist is difficult, and a built-in compass for which direction one is facing. The Apple Watch 5 is available September 20 and is priced at US$399 and US$499 for the cellular variant.

The story of Apple Watch may be that Apple Watch 3 falls to US$199 while the Apple Watch 4 will be discontinued.

iPhone 11, iPhone Pro, iPhone Pro Max:

The main announcement was left for last. Three devices were officially unveiled. With iPhones, the key will be how it delivers in the real world. Most of the required specs were checked off—excluding 5G. First impressions are the display is vibrant, the textured glass back is refined, and overall the hardware looks elegant.

Apple went out of its way to promote the camera brags, which did seem impressive. But we will have to wait to see what real-world usage brings. The camera bump is sizable and polarizing. Apple bets the cameras’ performances, and 30,000 photography apps will overcome the aesthetics. The demos of ultra-wide view shots were impressive. So was the demo of ‘deep fusion’, where nine images are shot, and machine learning is used to deliver an optimized low-noise shot.

The A13 Bionic chip built on 7nm process was advertised as 15% more efficient. It will be interesting to see how Apple has converted on owning the complete hardware stack, OS, and own chip design.

Will Apple be able to maintain the enthusiasm of its base? The lack of 5G will be tricky as some OEMs will be on version three when Apple announces its first. The lack of 5G on the new devices will limit the amount of switching from Android to iOS on the high-end. Keep in mind that Qualcomm has announced over 150 5G design wins, mostly smartphones. Therefore, there will be plenty of options for 5G devices from Chinese vendors that will come at the pricepoint of two-year-old LTE iPhones.

Apple did enough to hold serve on its iOS base with the new launches. The additional stickiness that Apple TV+, Apple Arcade, Apple Watch, and other services bring sufficiently overcomes the lack of 5G this year. Apple is pivoting, slowly, to being a services company. Nothing announced today undermines that strategy shift; it maintains sufficient strength in hardware to fend off any competition from the Android ecosystem, while adding further muscle to its services proposition that will develop steadily.

Jeff has 25+ years experience in technology research, business development, competitive intelligence, and business management. Prior to joining Counterpoint Research, Jeff held various research & product development roles at Microsoft, Nokia, Roth Capital Partners, and Gartner. Jeff is a member of many telecom industry organizations including Colorado Wireless Association,, CommNexus, and is a regular speaker at major telecom industry events. He was a 4x NCAA all-American in tennis and is a 12-time finisher of the Hawaii Ironman World Championships.

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