Stakes are high for Apple going into ‘critical event’
Apple’s annual September event is always its most anticipated gathering of the year. The stakes are especially high this time around.
Heading into Wednesday’s invitation-only event in San Francisco, Apple is contending with volatile stock markets worldwide, economic turmoil in China — arguably its most important market — and doubts about consumer acceptance of the Apple Watch and Apple Music.
“We view this as a critical event for Apple to help turn the negative investor tide and help lay out its growth vision for the next year,” Daniel Ives, managing director at FBR Capital Markets, said in a note to investors.
The September event by tradition spotlights the newest iPhones. The latest iPhone iteration is expected to follow previous naming conventions and be called the iPhone 6s (and 6s Plus).
Apple is also expected to reveal a more expensive refresh of Apple TV, a set-top device that streams movies, shows, music and other content to television screens.
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The next-generation Apple TV is expected to include a new remote control, enhanced capabilities for video games, a dedicated App Store, universal search and integrated Siri voice recognition. The company’s invite for its event Wednesday said, in Apple’s typical vague fashion, “Siri, give us a hint.”
“We see a new Apple TV device driving new App Store market opportunities,” Macquarie analyst Ben Schachter said in a note to investors. “We believe that Apple’s App Store, as the highest-margin and fastest-growing Apple business, is widely underappreciated by investors.”
The new Apple TV will probably get a starting price of $149; the current version costs $69 after a March price cut from $99.
A souped-up Apple TV could help pave the way for the Cupertino, Calif., company to get into the content-making business, a possibility it is exploring. The tech giant has held early talks with executives in Hollywood that could lead to a push into original video content to take on the likes of Netflix and Amazon, according to two people with knowledge of the matter who were not authorized to speak publicly.
A larger version of the iPad, directed at the business market, might also be announced.
In the past, iPhone updates to current models — the iPhone 4s in 2011 and the 5s in 2013 — brought about only incremental improvements. But “with smartphone stakes higher than ever,” Ives said he expects more meaningful advancements for the latest “s” iteration.
Industry watchers believe the new iPhone will come with Force Touch, a feature that senses the amount of pressure a user exerts on the display; a 12-megapixel rear-facing camera, up from the eight megapixels found in the 6 and 6 Plus; an improved FaceTime front-facing camera; a less-bendable aluminum frame; and a faster A9 processor. A rose gold color is expected to join the current lineup of space gray, silver and gold.
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Despite earlier rumors that Apple would also update its lower-cost plastic iPhone 5c, it appears to have abandoned plans for a 6c for now.
Apple clearly sees Wednesday’s event as a big deal. It rented out the Bill Graham Civic Auditorium, with a capacity of 7,000 — more than three times that of the Flint Center in Cupertino, where the iPhone 6 and 6 Plus were launched a year ago. When it unveiled the iPhone 5s in September 2013, it went with the small town hall auditorium at company headquarters.
Analysts are divided on whether Apple will finally showcase its long-rumored larger 12.9-inch iPad Pro, aimed for businesses, or wait until October.
Expect updates on the Apple Watch, Apple Pay and the upcoming release of iOS 9.
Chief Executive Tim Cook might use part of the event to quell concerns about its business in China as well as the health of its fledgling Apple Music streaming service, which launched in June and has faced reports of low user numbers after an initial three-month free trial. Last month Apple confirmed that Ian Rogers, a key figure in the company’s streaming music service, was leaving the company.
Twitter: @byandreachang
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