April 14, 2022

Apple Extends Reach With $800 Watch, as New iPhone Inches Along

The Apple Watch Ultra is aimed at endurance athletes, a market dominated by Garmin. Apple also introduced updated AirPods.

Over the past decade, September has been the month when Apple revealed its latest iPhone. The company served up swaggering advances in technology, year after year, that propelled its business as Apple became the world’s most valuable company.

But as the marquee device has grown older and its improvements have gotten more incremental, the tech giant has shifted its focus to younger products with more runway for innovation: the Apple Watch and AirPods.

Apple on Wednesday unveiled a fitness-focused version of its wearable computer, the Apple Watch Ultra. Aimed at triathletes, distance runners, scuba divers and backcountry enthusiasts, the rugged $800 model features a larger screen and improved durability. It also has an “action” button to make it easier to use while wearing gloves, bigger speakers for calls in windy conditions and a larger battery with a 36-hour life span on a charge.

New features for Apple’s wireless earbuds, the AirPods Pro, include the ability to change the volume with the swipe of a finger.

While the iPhone still accounts for more than half of Apple’s sales, the smartwatches and AirPods, which require an iPhone to work optimally, have helped the company build a fortress around its most important device, deepening customer loyalty.

“The more products you have from Apple, the more impossible it becomes to leave Apple for another player,” said Francisco Jeronimo, vice president of device research at IDC, a market research firm. “Your entire life becomes part of a single ecosystem.”

Apple has used the iPhone, which has more than one billion users, to enter new markets and conquer unrelated businesses. It has helped Apple disrupt the finance industry with its own credit card, the watchmaking profession with its own timepiece and the audio industry with its wireless headphones.

The Apple Watch Ultra is the latest example of how the company can extend its tentacles. It thrusts Apple into a corner of the smartwatch market dominated by Garmin, which does about $2.6 billion in sales to endurance-sports competitors, according to IDC. With Apple’s brand recognition and the iPhone’s popularity, it should be able to cut into that share, Mr. Jeronimo said. It already claims nearly 51 percent of the smartwatch market, more than double its closest competitor, Samsung.

Garmin said on Wednesday that Apple’s move into adventure smartwatches validated the business it had built.

“We will continue to push the limits of GPS-enabled technology and remain committed to creating innovative products designed for active lifestyle customers around the world,” said Krista Klaus, a company spokeswoman.

In addition to the fitness-focused watch, Apple released an update for its traditional watch, the Series 8, with a sensor to track body temperature and a feature called “crash detection,” which can identify when an Apple Watch wearer is in a car crash and notify family and emergency services.

Apple unveiled the products at the Steve Jobs Theater on its campus in Cupertino, Calif., the first time it had held a product event there since 2019. The venue was packed with journalists and employees, who celebrated the return to normalcy by cheering as Tim Cook, Apple’s chief executive, took the stage to introduce an infomercial detailing the new products.

The Apple Watch’s new abilities overshadowed more modest updates to the iPhone lineup. Apple released introductory and higher-priced versions of the iPhone 14 with 6.1-inch and 6.7-inch displays. Both models add the abilities of a satellite phone, allowing users to connect with emergency services in rural and other remote environments so they can get help if they are lost while hiking or find themselves in some other dire situation.

The lower-priced iPhone 14, which costs $800, features last year’s processor but has improved front and rear cameras with larger sensors to capture clearer photos in low light.

Apple saved its biggest design changes for the iPhone 14 Pro, which costs $999, the same as last year’s flagship phone. The new phone eliminates the notch for its Face ID system in favor of a small cutout that contains the front camera and displays alerts and notifications. The phone also has an “always on” display to illuminate information like a clock without unlocking the phone, and a slimmer, black border around the screen.

Unlike the lower-priced iPhone 14, the Pro model features a new processor, the A16, which supports an improved camera with a larger sensor for better photos. It also supports new machine-learning algorithms to enhance the details and sharpness of photographs.

Despite having some of the highest prices in the smartphone market, the iPhone enjoyed a business revival during the pandemic. For its last fiscal year, Apple posted a record $192 billion in revenue from the iPhone alone, a 14-year-old device that has become better known for incremental improvements than revolutionary innovations.

Apple expects the iPhone 14 to sustain that momentum. Though other smartphone manufacturers are cutting production as the global economy cools, Apple plans to make more phones than it did a year ago, according to Susquehanna International Group, a financial firm.

The company has broadened its customer base in recent years by offering seven models of the iPhone, ranging in price from $429 to more than $1,500. Its luxury pricing has helped it accumulate more affluent customers than rival smartphone makers, but about a third of iPhone buyers earn less than $50,000 a year, according to Consumer Intelligence Research Partners, a tech research firm.

The iPhone 14 may be more notable for where it’s being made than its new features. This year, for the first time, Apple will assemble some of its flagship phones in India, part of a strategy to decrease its dependency on China, where it produces the vast majority of its products.

Efforts to diversify its supply chain have assumed greater urgency for Apple this year amid pandemic-induced disruptions in China and escalating geopolitical tensions over Taiwan’s status.

“We’re in a post-maturity phase of the iPhone,” said Bob O’Donnell, founder of Technalysis Research. “It’s getting harder and harder to tell generations of the device apart.”

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