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 05:44 ET (09:44 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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