Apple updates key iPhone line

Bloomberg

Apple Inc. has rolled out updated products and new features that mostly relied on an old strategy. The most-valuable technology company is targeting pent-up appetite for new iPhones to reignite sales growth amid mounting investor concern that its pace of innovation is slowing.
The iPhone 7 line includes camera upgrades, a faster processor, longer battery life and a new water and dust-resistant design, the company said during an event at San Francisco’s Bill Graham Civic Auditorium. Apple also ditched headphone jacks to make room for other features and the company showed off new $159 headphones called AirPods that connect wirelessly to the new iPhones.
“This is the best iPhone we’ve ever created,” Chief Executive Officer Tim Cook told an audience of reporters and Apple employees.
Apple’s previous CEO Steve Jobs introduced the iPod, iPad and original iPhone at similar events in the past, helping revenue and profit surge. Yet sales this fiscal year are forecast to decline for the first time since 2001, prompting questions among some investors and analysts about Cook’s ability to deliver such innovations. He’s trying to increase sales of
software and services, while greater investment in research and development has yet to yield new product lines such as an Apple car or virtual reality offering.

MUTED EXPECTATIONS
Expectations for the iPhone 7 had been muted, with anticipation instead mounting for the model to be introduced in 2017, when Apple celebrates the device’s 10th anniversary. Apple’s smartphone market share is likely to slip to 13.9 percent this year, compared with 15.8 percent in 2015 and an estimated 14.2 percent in 2020, research firm IDC estimated before Wednesday’s event. It also forecast slower growth in overall smartphone sales as consumers upgrade less frequently.
The latest iPhone is similar in design and size to its predecessor, the iPhone 6S. The larger 7 Plus handset has a back-facing dual camera which allows for crisper images, particularly in low light. It also comes with a new pressure-sensitive Home button that provides a vibrating sensation in response to button presses instead of an actual physical click.
The smaller of two models, the iPhone 7, will cost $649 and the larger 7 Plus will cost $769.
Apple’s failure to completely overhaul the design, as it has previously done every two years, shouldn’t hurt sales, said Lauren Guenveur, an analyst at Kantar Worldpanel. “Most people upgrade because they’re looking for better battery life, better storage capacity, and a faster processor and that’s everything that they highlighted today,” she said.

CHINA UPGRADE
China has been a drag on Apple’s performance this year as local rivals introduce cheaper handsets with similar functionality.
Apple said Wednesday that its iPhone Upgrade subscription program — where users pay a monthly fee to get a new phone each year — will be extended to Asia’s largest economy.
That could help it boost future revenue in China, where the third-quarter sales decline was bigger than the revenue drop in the Americas and Europe combined.
“To make inroads with the next 500 million Chinese consumers, they need to find a way of making their devices affordable without compromising on their premium brand — this might help them do that,” Julie Ask, a Forrester Research analyst said. The program, introduced in the U.S. last year, will also be extended to the U.K.

TOUGH CELL
The new Apple Watch may disappoint customers who had been hoping for a cellular chip that would have given it mobile network connectivity and un-tethered it from the iPhone. Apple had been in talks with mobile phone carriers earlier this year to introduce such a version, but the plans hit hurdles on concern about reduced battery life, people familiar with the discussions said last month. Samsung Electronics Co. unveiled its own smartwatch with cellular connectivity last week.
The model unveiled on Wednesday — dubbed the Apple Watch Series 2 — targets fitness fanatics. Waterproofing down to 50 meters has allowed Apple to build swim tracking into the device, while GPS means joggers can plot their runs without carrying an iPhone.
Apple also teamed up with Nike Inc. to release a version the two companies call the Apple Watch Nike+. The partnership will let Apple sell products with the world’s largest sport brand’s well-oiled marketing machine and sales network.