Though a 5G iPhone was noticeably missing from Apple Inc.'s fall hardware event this week, analysts said the products that were on display will still help the tech firm grow its business and revenues.
The company on Sept. 15 debuted its latest smartwatch that includes a new blood oxygen level detection feature, as well as refreshed iPads equipped with speedier processors. Apple also introduced a new services bundle that provides access to offerings such as Apple Music, Apple TV+, Apple Arcade, and iCloud storage. A second event is anticipated in October, when the company will take the wraps off its new lineup of 5G-capable iPhones.
Analysts say Apple's focus on hardware aimed at boosting productivity amid the COVID-19 pandemic and its efforts to further integrate its services offerings should bolster the company's ecosystem by attracting potential new users ahead of the all-important 5G iPhone launch.
Evercore ISI analyst Amit Daryanani considered the new services bundle to be Apple's most important announcement, noting that its competitive pricing strategy could help the firm take share from peers.
Dubbed Apple One, the offering includes three plans — individual, which costs $14.95 per month; family, at $19.95 a month; and premier, costing $29.95 each month. The individual and family bundles both include access to Apple Music, iCloud storage, Apple TV+ streaming and Apple Arcade, while premier provides additional access to Apple News+ and more cloud storage.
"Spotify [Technology SA] alone costs $10/month so this could be a compelling reason for Spotify users to make the switch given music streaming is relatively commoditized," Daryanani wrote in a research report.
Wedbush Securities analyst Daniel Ives said the services bundle is a "smart strategic move" that should help Apple further strengthen its user base and services business. Net sales in Apple's services category came to $13.16 billion for the June quarter, up from $11.46 billion a year ago.
 Apple's new iPad Air is part of the company's iPad refresh, which comes as people work and learn remotely amid COVID-19. Source: Apple Inc. |
Spotify has reportedly alleged Apple's bundling subscription offering is "anti-competitive," and called on competition regulators to restrict the company's practice. Apple responded that its customers can still "discover and enjoy alternatives" to its services.
For his part, Piper Sandler analyst Harsh Kumar responded to the Sept. 15 event by upping his price target on Apple stock to $130 from $113 while reiterating his "overweight" rating, noting the company's iPad refresh in particular provides an "enticing" lineup as people work and learn remotely amid COVID-19.
Apple unveiled two iPad models — a new iPad Air, which starts at $599 and will be available sometime in October, and its eighth-generation, entry-level iPad that starts at $329 and launches Sept. 18. Education customers will be able to get the budget-minded iPad for a discounted $299.
The iPad Air includes a new A14 bionic chip, allowing for faster overall device performance, along with next-generation Touch ID that enables users to unlock their device using a button located at the top corner of the device.
The entry-level iPad, meanwhile, comes equipped with a more advanced A12 bionic chip.
Kumar also noted the company's latest smartwatches and services revealed Sept. 15 will help address users' "new normal" as impacts from COVID-19 subside.
The company's new Apple Watch Series 6 includes a blood oxygen sensor, which shines a mix of red and infrared light on a user's wrist to measure the color of their blood, and it calculates the blood oxygen level present in 15 seconds, Apple said.
"Blood oxygen and pulse oximetry are terms that we've heard a lot about during the COVID pandemic," Sumbul Desai, vice president of Apple Health, said in the virtual announcement. "Blood oxygen saturation is an indication of how well the system is functioning and of your overall respiratory and cardiac health."
 Apple's latest smartwatch features a new blood oxygen sensor Source: Apple Inc. |
Though the iPhone continues to drive the lion's share of Apple's total sales, growth in wearables and tablets have gotten a boost in recent quarters as more people work and learn from home.
For the June quarter, iPad net sales came to $6.58 billion, up 31% from $5.02 billion in the same period a year ago. Net sales in Apple's wearables, home and accessories category — which includes products such as the AirPods, Apple Watch and the HomePod smart speaker — jumped 16.7% year over year in the June period, totaling $6.45 billion.
Apple's newest products and services are "key ingredients in [Apple's] recipe for success" heading into 2021 and beyond, said Wedbush's Ives.
The analyst is particularly bullish on the launch of a 5G iPhone; he expects Apple to launch four new iPhone models with a mix of 4G and 5G capabilities. The phones could potentially retail at under $1,000 despite the addition of 5G, he said.
When fully implemented, 5G is expected to offer download speeds many times faster than current 4G LTE networks.
