Apple’s annual September event is on Wednesday, and we have a pretty good sense of what’s going to be there — new iPhones, new Apple Watches, and new-ish operating systems. We also know that next-generation iPad and Mac models will most likely debut separately in October.
Since iPhones constitute over 60 percent of Apple’s revenue — before you count cash generated by substantially iPhone-dependent accessories and services such as Apple Watches and Apple Pay — there’s arguably a lot at stake for this event. But even before Apple crossed the $1 trillion valuation mark this summer, there was nothing precarious about its position: It now sells so many devices each day around the world that it’s more threatened by trade war-related manufacturing or pricing disruptions than the unlikely prospect of a sudden drop in consumer interest.
Here’s where Apple stands going into the Gather Round event.
iPhone: Think 2018 and 2019
It didn’t take long for the iPhone to surpass the iPod and Mac as Apple’s biggest product, and although sales may have plateaued, they’re not plummeting. That’s remarkable, given both general contraction in the smartphone industry and the fact that the average selling price of iPhones has gone up considerably over the last year. Apple played a dangerous game with the iPhone X, focusing most of its marketing efforts on a flagship device with a $999 starting price, and despite plenty of skepticism, it wound up winning.
2018’s iPhone lineup will reflect that experience. The iPhone X name did solid business across the world, so now there will be three “iPhone X” variants to choose from at different price points, and they’ll all do well. If you don’t want an Xr or an Xs, you can buy an older phone instead. For this year, all of these products are effectively on autopilot: The new ones will be predictably better, and the old ones typically cheaper. Apple will probably say something like that it thinks everyone should be able to buy an iPhone X, and people will agree, buying the new models in droves throughout the holidays.
But the landscape will start to shift in early 2019. Since I cover both Apple and next-generation 5G cellular technology, I would love to be able to tell you that Apple’s biggest challenge going into 2019 is its apparent lack of a 5G device — or device strategy — right before a dozen or more rivals (and some carriers) start rolling out 5G phones. Apple’s still squabbling with key 5G chipmaker Qualcomm, which will be supplying most of Apple’s competitors, and at this moment, it’s still not certain that Apple will use Intel 5G modems instead.
Apple wasn’t a leading smartphone maker during the 2G-3G or 3G-4G transitions, so it didn’t need to be early to support a new standard, but that has arguably changed ahead of the 4G-5G transition. “Innovative” Apple is supposed to be a leader, as it was with 64-bit smartphone chips, so it’s going to be a challenge for the company to explain why it’s waiting on 5G while others are embracing it.
Unfortunately for early adopters, I really don’t think Apple cares much about being “late” on 5G. Samsung is apparently estimating total 2019 sales of 2 million 5G phones, which is equivalent to less than 5 days of typical iPhone sales. Apple could easily take the position that the 5G party doesn’t start until it shows up, and given the expected lack of global 5G availability through 2020, it will wait until at least next September — if not longer — to join in. And if history is any precedent, the iPhone family will do fine despite sitting on the sidelines.
Apple Watch: What’s kept and discontinued matters, too
Several years after releasing its first real wearable, Apple is now the leading smartwatch maker in the world. Sales of the LTE version of the Apple Watch Series 3 have apparently been better than expected — and a way for phone carriers to cuff users to their services — though plausible, unconfirmed rumors persist that less expensive Series 1 models continue to be Apple’s top sellers.
I wouldn’t call Apple’s position with Apple Watch particularly shaky, but its lead and revenues are nowhere close to the positions it has staked out with the iPhone. A big slip-up could let a well-placed rival surge in shipments, but in a year that will see new Apple Watches get bigger screens and related under-the-hood improvements, it’s hard to imagine anything changing drastically here.
The exception could be price — I’m personally going to be watching for stealthy price adjustments to the lower and middle parts of the Watch lineup. Apple could do something to drive up ASPs this year, such as finding a way to drive more demand to the Series 4 versus earlier models. On a related note, will the Series 1 disappear in favor of the previously discontinued Series 2, be replaced by the Series 3, or stick around at an even lower price point? Apple has some interesting pricing and “Watch family” options here that could kill off sub-$200 fitness band rivals, but it remains to be seen whether the company will pull that trigger.
Services: Hoping against hope for excitement
Hey, wouldn’t it be great for Apple to boost its free iCloud storage tier?
Or offer a cheaper, HomePod-only Apple Music subscription?
Or announce its open secret video service?
Yeah, I’m not holding my breath on any of these things.
iPad and Mac: Not this event, sorry
New iPad Pros with Face ID are coming. A new 13-inch MacBook with a Retina display is, too, along with long-awaited Mac mini updates, some new iMac improvement, and probably a whole bunch of other processor bumps for various other Mac computers.
I’m not expecting them to show up at this event. There’s enough news to be made on the iPhone and Apple Watch fronts to keep journalists and consumers plenty busy (and empty-pocketed) this month. And with around 15 million units sold per quarter across the iPad and Mac lineups versus around 45 million units of iPhones and Apple Watches, I don’t think Apple is sweating quite as much over computers these days. Four million Macs a quarter is merely a drop in the bucket; 11 million iPads, at much lower prices, represents a slightly smaller droplet.
As of right now, Apple is worth nearly $1.1 trillion and has hundreds of billions of dollars in the bank. It’s worth underlining that those numbers were achieved slowly and surely and while facing plenty of criticism and doubts from all corners.
Plenty is at stake for Apple ahead of Wednesday. But there’s little actual risk that this money-making machine will stop printing cash anytime soon.