By Tripp Mickle
CUPERTINO, Calif. -- A decade after revolutionizing the
smartphone, Apple Inc. is aiming to rejuvenate its signature
product with a trio of new handsets, including a new flagship
iPhone that comes loaded with a larger display and
facial-recognition technology.
The new smartphone, unveiled Tuesday and dubbed the iPhone X, is
one of its most anticipated in years. Investors, betting the iPhone
X can revive flagging iPhone sales in China and trigger upgrades
across the U.S. and Europe, have pushed Apple's share price to
record highs in recent months.
"It is the biggest leap forward since the first iPhone," said
Chief Executive Tim Cook, who unveiled the iPhone X at the
company's annual product showcase.
Apple also revealed two other handsets, the iPhone 8 and iPhone
8 Plus, upgrades to last year's iPhone 7 and 7 Plus. The company
also announced a new Apple Watch with cellular connectivity and an
Apple TV with ultra-high definition functionality.
Apple is threading a needle with the three new phones, trying to
generate excitement with the iPhone X, which it said will cost
$999, while still getting people to buy the upgrade phones, which
will start at $699 for the iPhone 8 and $799 for the iPhone 8
Plus.
While the upgraded phones will be available Sept. 22, the iPhone
X won't start shipping until Nov. 3 -- much later in the year than
new iPhones typically start shipping.
The announcements came at Apple's annual product showcase, held
for the first time at Steve Jobs Theater on a new $5 billion
campus.
The iPhone X is the first new iPhone design since 2014 and hits
the market at a time when Apple's smartphone growth has slowed as
consumers hold onto devices longer and competition from low-priced
rivals increases. Apple's share of the global smartphone market
slipped to 14.5% last year from 19.4% in 2012, according to
Strategy Analytics, a market research firm.
The iPhone X -- which also boasts 3D sensors and a dual-lens
camera system -- arrives amid questions about Apple's ability to
innovate. Android rivals such as Samsung Electronics Co. have
leapfrogged Apple on smartphone design in recent years, introducing
larger, OLED handsets and water resistance. Meanwhile, low-priced
smartphones in China are closing the gap offering similar features
at far lower prices. Meanwhile, new products like the Apple Watch
have failed to replicate the sales momentum of the iPhone and
iPad.
"Apple had a good three- to four-year head start but now the
[smartphone] industry is in parity with Apple," said Wayne Lam,
smartphone analyst with the research firm IHS Markit. "The question
has become: How does Apple redefine themselves and the next
decade?"
Mr. Lam said Apple is betting the new features on the iPhone X
can keep its "cash cow" product competitive. The iPhone X ditches
the device's popular home button and Touch ID, the fingerprint
sensor used to unlock the phone.
To unlock the iPhone X, users raise it, look at it and allow the
facial-recognition system called Face ID to verify their face. The
Face ID system uses sensors on the front of the device that send
30,000 dots of light across the face. Those dots are used to create
a mathematical model of the user's face, which are checked against
a model of the face kept on the device.
Apple marketing chief Phil Schiller said Face ID learns a user's
face, even if the user changes hair style, wears glasses or puts on
a hat. He said it adapts over time and works in light and
darkness.
Mr. Schiller said Apple engineers worked on the technology to
make sure photographs or even masks replicating a user's face
couldn't trick it. He said the chances that someone other than the
user could unlock the phone with Face ID are one in a million,
compared with one in 50,000 for Touch ID.
The iPhone X's new design -- a 5.8-inch, edge-to-edge display --
has raised hopes that it can reverse Apple's fortunes in China,
where sales have fallen six straight quarters. Chinese consumers
are more influenced by a phone's appearance than consumers in other
markets, and Apple hasn't kept the same appearance for three years.
Analysts are hoping the new appearance helps rejuvenate sales in
the market.
"The high-end Chinese phone market is super competitive and
customers are very discerning but also enthusiastic," said Benedict
Evans, a partner at Andreessen Horowitz, a venture capital firm.
"If Apple can get something that rings the bell [with them], then
this will work."
The iPhone 8 and 8 Plus feature what Apple billed as a new
design, made of glass on front and back, as well as louder
speakers, faster processors and upgraded cameras.
All three handsets offer wireless charging and feature new
gyroscopes and accelerometers to improve augmented reality
experiences on the devices.
The Apple Watch Series 3 will have an LTE chip that enables it
to connect to the fastest cellular networks for many of the same
functions the iPhone offers. Its predecessor, the Apple Watch
Series 2, acted more like a remote control for the iPhone, using
Bluetooth and Wi-Fi to fetch email, messages and other data from
the handset.
The Apple Watch will feature new chips and new antenna. Chief
Operating Officer Jeff Williams said it is the same size as its
predecessor.
The new Watch costs $399 with cellular capability, or $329
without. It looks similar to its predecessor, except for a red
accent on a knob on the right side of the device. The Apple Watch
Series 2 will be reduced in price to $249.
The Apple Watch Series 3 has the potential to extend recent
sales gains by boosting the device's functionality, analysts said.
The cellular capabilities allow people to leave their iPhones
behind and still send and receive emails and messages by using
Siri's transcription abilities. Users with AirPods wireless
headphones could also make and receive calls using just the
watch.
Apple has sold an estimated 30 million Apple Watches since
introducing the device in 2015, according to market research by
IDC. The addition of Global Positioning System (GPS) and waterproof
capabilities introduced with last year's Apple Watch Series 2 has
the company on track to boost sales nearly 25% this year.
The update to Apple's streaming-media player, called Apple TV
4K, is the first since 2015 and comes as the device has lost market
share to lower-priced rivals. Apple Vice President Eddy Cue said
Apple will sell ultra-high definition films from Hollywood studios
at $19.99, the same price it currently offers high-definition
films. There also will be live sports in 4K from ESPN and
others.
Write to Tripp Mickle at Tripp.Mickle@wsj.com
(END) Dow Jones Newswires
September 12, 2017 15:44 ET (19:44 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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