AAPL Apple Inc

By Tim Higgins 

Apple Inc. has long been a pioneer in marketing its products, but the tech giant is preparing for an unusual Covid-19 era September event on Tuesday, one that isn't expected to feature an iPhone or a packed crowd.

Chief Executive Tim Cook will continue with the cadence of a keynote event, but via web stream, and instead of featuring a new flagship iPhone, the company is expected to reveal its latest watch and an updated iPad. The event is set to start at 1 p.m. New York time.

Apple has used its big September event to showcase new iPhones every year since 2012. But this year, the company is holding its biggest publicity blast for next month when it unveils a highly anticipated smartphone with 5G connectivity that is expected to usher in big sales and fat profits, investors and analysts say. The next-generation iPhone is among the most anticipated since 2014, when Apple introduced a larger-screened option of the device, which now makes up about 50% of its annual sales.

The unusual turn of events reflects the uncertainty Apple is facing after coronavirus-related shutdowns in China affected its supply chain and pushed back production of the new phone. Mr. Cook this fall faces the triple challenges of meeting sky-high investor expectations, navigating a pandemic that has triggered a global economic shock, and managing the heightened scrutiny of the company's grip on the app market, which some rivals are complaining is akin to a monopoly.

Apple has sharply defended how it manages its app store, which the company has said is fair for customers and developers and has instead helped create millions of new jobs and businesses. But Mr. Cook is facing concern from some investors who wonder if anything the company has in store -- on Tuesday or next month -- can live up to the meteoric rise in Apple shares.

This year, Apple has led a broad rally for technology companies as people have shifted to working from home and oriented their lives around technology in ways many analysts believe will be lasting. The stock has more than tripled in value since a low in January 2019 linked to U.S.-China trade tensions and the company's reduction of its quarterly revenue forecast for the first time in 15 years.

"We question whether they can announce anything in the next two months...that can keep this thing outperforming the way it has," said Mark Stoeckle, chief executive of Adams Funds, a Baltimore-based investment firm with $2.5 billion under management that counts Apple among its largest holdings.

Apple's smartwatch has gained popularity in recent years, and Tuesday's event is likely to show off new health features that could appeal to consumers at a time when many gyms have shut down and people have turned to at-home workouts.

Still, Mr. Cook has also acknowledged some difficulty with watch selling because of the pandemic. He said in July that the closure of its stores during the April-through-June quarter hindered sales of the watch. "Some people want to try on the watch and see what it looks like," he said.

Mr. Cook, and the late Steve Jobs before him, long depended upon Apple's keynote events to stoke excitement for their latest products. Part rally, part tech demonstration, the events are unlike other brand's product reveals.

Past events provided celebrity sightings and iconic moments before an audience, many of whom were jubilant employees who contributed to the boisterous atmosphere. A young Mr. Jobs in a bow tie (before adopting his trademark black mock turtleneck) revealed the first Mac computer to a crowd of wild cheers in 1984. "Hello, I'm Macintosh," the small computer said.

Without a crowd, it will be hard to capture the same kind of emotion, marketing experts caution. "You turn on an HBO comedy special, there's always an audience because it adds something to that -- and consumers want to see that, whether they're voting for a president, whether they're looking at what their tech is going to be," Alexander Edwards, president of consumer research firm Strategic Vision, said.

In the era of Covid-19, however, the show must go on. Other brands in recent weeks have shown it is possible to launch a new product. Ford Motor Co. attracted substantial buzz for its highly anticipated Bronco sport-utility vehicle that made its debut virtually in July.

Samsung Electronics Co., one of Apple's strongest rivals, has typically relied on glitzy in-person smartphone launches that are packed with thousands of screaming fans and use hands-on demos to build hype for its products.

Samsung opted for a real-life event in early February in San Francisco, but by its summer phone launch in August, it chose instead to live-stream from a studio near Seoul.

Its executives explained device features in the shadow of augmented reality projections that presented the gadgets as larger-than-life. Instead of featuring attendees cheering, the stream presented a video backdrop of Samsung users to communicate enthusiasm.

The online event drew about 56 million viewers, according to the company. Research firm Talkwalker tracked more than 90,000 mentions of Samsung's August event on social media, almost 10,000 more than from the February event.

Apple may be better positioned for a virtual-only debut than anyone. It helped pioneer the idea of live-streaming product reveals almost 20 years ago. In July 2002, Apple used its QuickTime software to stream Mr. Jobs' keynote for the first time, which an Apple executive called a "major landmark in internet streaming."

That muscle was on display in June when Apple abandoned its annual in-person developer conference because of Covid-19 and redeployed it as an online event. The online confab became a test case for conference organizers across industries to see if attendees would tune into an event they were accustomed to travel to in person.

Apple distributed more than 72 hours of video content and conducted more than 200 direct-to-video engineering and design sessions and about 4,000 person-to-person developer meetings across 227 virtual labs, according to the company.

The event got praise from some participants and, by one measure, generated more buzz than normal. Social media mentions for this year's conference soared to more than 48,000 on the first day compared with just 3,200 a year earlier, according to Talkwalker.

It is tough for brands which have often formed marketing plans for a new product one or two years in advance. But Mr. Edwards, the brand specialist who has conducted consumer surveys to learn about buyer mind-set around Covid-19, said there is some room for missteps this year. In the pandemic, "we have our consumers that are willing to be a little bit forgiving," he said. "Everybody understands what's going on."

Elizabeth Koh contributed to this article.

Write to Tim Higgins at Tim.Higgins@WSJ.com

(END) Dow Jones Newswires

September 14, 2020 06:33 ET (10:33 GMT)

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