By Tim Higgins and Anne Steele
Apple Inc. unveiled new products Tuesday including a
subscription podcast service that deepens its competition with
Spotify Technology SA as well as upgrades to its iPad and iMac
hardware lines.
The announcements, during Apple's first product event of the
year, also included new wireless tags that enable iPhone users to
track gadgets, competing with the similar product from Tile Inc.
That company and Spotify have been among the most prominent
corporate critics of the tech giant, claiming it uses its strength
to compete unfairly, which Apple denies.
The rollout featured a further expansion of the company's
in-house-designed processor chips to the iMac desktop computer. The
chip change was part of a full iMac redesign -- the first
significant redesign of Apple's popular desktop since 2012. Apple
also said it is bringing its new chips to the high-end iPad Pro,
which comes with a brighter screen and speedy fifth-generation, or
5G, connectivity.
The Cupertino, Calif.-based company began offering the faster 5G
technology in its newest iPhones last fall, helping juice sales for
the device. iPad sales rose 41% in the October-to-December quarter
to $8.4 billion, and other Apple products such as its Mac
computers, watches and wireless headphones also saw sales increases
because of the pandemic.
The tech giant topped $100 billion in quarterly sales for the
first time as consumers flocked to new iterations of the iPhone and
other devices.
Analysts surveyed by FactSet, on average, expect iPad sales to
fall in the second half of the fiscal year compared with a year
ago, but still finish 2021 in September better than a year
earlier.
The latest iPad Pro will be available to order April 30. The
device starts at $799, while the larger version with its brighter
screen will begin at $1,099. The iMac, which will be offered in a
variety of colors, begins at $1,299. Apple's new M1 chip will allow
the desktop to be much slimmer, according to the company.
The development of a paid subscription option within Apple's
podcast app comes with a revamp of that app.
It underscores a core strategy that Chief Executive Officer Tim
Cook has been championing since well before the pandemic, one
focused on building out the company's digital services to fuel
growth and keep consumers even more closely tied with Apple's
ecosystem. The tech giant's services division generated almost $16
billion in sales in the quarter that ended in December, an almost
25% increase from the same period the previous year.
Mr. Cook's services-driven strategy will put Apple in closer
competition with companies that operate on its devices. Some of
those businesses have grown more vocal in complaints about Apple,
saying it uses its might in anticompetitive ways.
The European Union has opened formal probes into Apple in part
after Spotify accused the tech giant of abusing its control over
how apps appear in its App Store. Apple has denied wrongdoing.
Spotify has complained for years that Apple aimed to limit
competition to benefit its own streaming service.
Executives from Spotify, Tile, Apple, Google and Match Group
Inc. -- a dating company that owns the app Tinder and other
properties -- are set to testify Wednesday in a hearing before a
U.S. Senate subcommittee focused on competition and antitrust
issues.
In 2005, Apple helped make podcasts mainstream by bringing the
medium to iTunes. The format has taken off since then with
listeners and advertisers, and tech companies have been scrambling
recently to beef up their offerings.
Spotify has said it plans to launch a subscription podcasting
model that would let certain podcasters charge listeners for access
on the streaming service. The new subscription options are set to
be announced on Spotify as soon as next month, according to people
familiar with the matter.
The streaming company has been adding subscribers thanks to its
focus on podcasts, spending big money to lock in high-profile
talent such as Joe Rogan. Amazon.com Inc. has signaled its expanded
interest in podcasts by purchasing Wondery.
Spotify is set to overtake Apple in terms of U.S. podcast
listeners this year, according to a forecast from research firm
eMarketer. An average of 28.2 million people in the U.S. will
listen to podcasts on Spotify at least monthly, while 28 million
will listen through Apple Podcasts, eMarketer said.
In 2019, Apple's market share was 34% of podcast listeners,
which is set to fall to 23.8% in 2021, according to eMarketer.
The tracking device revealed Tuesday had been expected for a
while. Called AirTag, the devices can be affixed to users' bags or
other items to track with their iPhone, similar to a product by
Tile.
Tile has complained that Apple has made it harder to use its
service in advance of the expected AirTag rollout. The company's
allegations were part of a Congressional report last year on big
tech companies' practices that some have deemed unfair. Apple has
denied wrongdoing.
"We welcome competition, as long as it is fair competition,"
Tile CEO CJ Prober said in a statement. "Unfortunately, given
Apple's well documented history of using its platform advantage to
unfairly limit competition for its products, we're skeptical."
Apple will begin taking orders for AirTag on Friday, with the
products arriving April 30. They are selling for $29 apiece or as a
four-pack for $99.
--Benjamin Mullin contributed to this article.
Write to Tim Higgins at Tim.Higgins@WSJ.com and Anne Steele at
Anne.Steele@wsj.com
(END) Dow Jones Newswires
April 20, 2021 17:07 ET (21:07 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
Apple (NASDAQ:AAPL)
Historical Stock Chart
From Aug 2024 to Sep 2024
Apple (NASDAQ:AAPL)
Historical Stock Chart
From Sep 2023 to Sep 2024