Apple’s new iPhones and watches are coming at a tough time for consumers
Apple is expected on Wednesday to unveil a new batch of iPhone 14 models and Apple Watches that will test consumers’ willingness to upgrade devices in the face of inflation and economic gloom.
Analysts expect Apple to announce that its latest iPhones can send emergency messages using satellites at an event called “Far Out” at its headquarters in Cupertino, California. On top of that, analysts expect a family of iPhone 14 models with incremental upgrades — slightly better cameras, processor chips and, crucially for Apple’s bottom line, prices of $100 or more from last year’s models.
To be sure, the world’s most valuable listed company will likely keep some older or less advanced models at lower prices, and so far Apple’s wealthy fan base has shown a greater willingness to keep spending despite high inflation. But the new models will serve as a fulcrum for Apple’s sales during the holiday shopping seasons in Western markets during a turbulent period. “Apple is not immune to economic weakness,” Bernstein analyst Tony Sakunagi wrote in a note to clients.
This year’s iPhones may have the ability to send emergency messages over a satellite internet connection when WiFi and mobile networks aren’t available. The messaging functions are likely rudimentary, and other companies are working on similar functions. SpaceX founder Elon Musk said last month that T-Mobile will use its satellites to connect phones directly to the Internet.
Bob O’Donnell of TECHnalysis Research said the peace of mind of being able to send emergency messages could motivate Apple users to upgrade their phones for the satellite feature.
“While it’s not something you do every day,” he said, “it will change your perspective on what you do with your phone.”
Analysts also expect Apple to showcase a new range of Apple Watches, including an upgraded budget model called the SE and Series 8 Watch. They are also expecting a new high-end watch called the Apple Watch Pro that will likely include new features for athletes, targeting competitors such as Garmin Ltd.
But while accessories like the Apple Watch have boosted sales from Apple’s existing user base, the iPhone remains a cornerstone of its business with 52.4% of sales in its most recent fiscal year. Investors have been keeping an eye on Apple’s next major product category since the launch of the Apple Watch in 2015.
Some analysts believe that Apple may offer a preview of this future by showing off a mixed reality headset on Wednesday. The device is expected to have cameras that pass the view of the outside world to the wearer while superimposing digital objects on the physical world. Analysts don’t expect the device to go on sale until next year at the earliest.
An early preview may be a rarity for Apple, which keeps its product plans secret even before the devices hit the market. Meta Platforms Inc is working on a competing headset called Project Cambria, which is spending billions of dollars on the project.
But in order to have attractive applications for a new headset, Apple may need to give developers time to get to know them. “Development for a platform of a new and fundamentally different kind is going to take much longer,” O’Donnell said.
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