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3 winners and 2 losers from Apple’s September iPhone event

Apple’s September 12 event premiering the iPhone 8, iPhone X, Apple TV 4k, and an LTE-enabled Apple Watch was the most exciting new iPhone launch event in years, thanks largely to the strategic risk the world’s leading smartphone maker is taking by shaking up the price structure of its world-conquering iPhone line.

But even though the iPhone X will inevitably dominate the news and the iPhone 8 will inevitably dominate Apple’s short-term profit and loss line, the undercard product launches are significant too. The Apple TV product, though fairly insignificant on its own terms, matters strategically as a gateway into both Apple’s services ecosystem and its longer-term ambitions to use HomeKit to become a dominant player in smart home technology. The Watch, meanwhile, appears to be Apple’s most significant near-term growth opportunity as it’s already established itself as a leader in a growing product category — one that just happens to be a relatively small category for now. It’s the place where incremental improvements in computing power and performance probably do the company the most good, and they continue to deliver them.

Of course, to tell whether any of these products are actually any good to use they’ll need to ship and be reviewed.

But from what we can tell today, here’s who comes out ahead and who loses out in the wake of today’s announcements.

Winner: journalists and enthusiasts

The past couple of iterations of iPhone have been fine products that sold in vast quantities, satisfied consumers, and earned billions in profits. But they haven’t been very interesting products for journalists to report on or enthusiasts to debate.

The sheer volume of speculation that’s focused on the iPhone X over the past couple of months even though everyone believes the iPhone 8 will greatly outsell it illustrates the point. With its new form-factor, upgraded screen, and attempt to replace fingerprint identification with face recognition, the iPhone X is the most interesting new product Apple has put out in years. The high price also represents a business strategy innovation in a market where the price of a top-end smartphone hasn’t budged in a long time.

This could be a way for Apple to make a boatload of new money. But it could also be a total flop like the super-expensive Apple Watch Edition that they put it out a few years ago. Or it could end up eroding the brand value of the “regular” iPhones in a problematic way.

However it plays out, we don’t know how it’s going to play out, and that’s not something that’s been true of an iPhone release in a while.

Loser: Fitbit and other fitness trackers

The Apple Watch is a minnow compared to the whale that is the iPhone.

But that’s a reflection of the extent to which the entire watch and wearables markets are small lakes relative to the vast ocean of the smartphone market. In its own pond, the Apple Watch is already a big player. And the release of a third iteration of the Apple Watch reveals that it’s only going to grow, and that competitors really have no answer.

The first Apple Watch was an appealing but deeply flawed product. The good news is that its main flaws were linked pretty directly to its underpowered internal silicon. But computer chips improve over time, and over the past few years Apple has established custom chip design as a real point of strength. The second Apple Watch got faster and added GPS capabilities. The third is a bit faster still and ads an independent LTE connection. The software keeps growing more capable alongside the hardware.

There’s still nothing here to convince dedicated fans of the fine art of mechanical watchmaking that they want a wrist computer instead. And a high-end digital watch certainly isn’t a must buy item for skeptics or the gadget averse. But if you are in the market for a digital device that goes on your wrist, the Apple Watch’s already strong value proposition is getting a lot better at an extremely rapid clip. Rivals are left with nowhere to go but cheaper, a land of diminished profit margins where you’re inherently left vulnerable to being squeezed out by discount older models of Apple’s wares.

Winner: rich teens

A thousand-dollar smartphone is the perfect conspicuous consumption item with which to establish yourself as king or queen of the cafeteria. Compared to something like a new car, it’s cheap enough to be a plausible ask from affluent parents. But perfectly good substitutes — ranging from the $700 iPhone 8 to Android handsets that sell for under $200 — exist for so much less that no reasonable parent would waste hundreds of dollars on getting their kid a luxury smartphone.

And yet inevitably some will.

With its all-new design and distinctive form factor, the iPhone X will stand out clearly from the pack letting its owners show off their loot to one and all. Apple is, obviously, thinking of a bigger and broader market for the iPhone X than that narrow group. But creating a prestige, envy-inducing item is very much on the agenda. The iPhone in general once held that status but it’s been, in a sense, a victim of its own success — selling so strongly for so long that possessing an iPhone no longer makes anyone stand out from just about any crowd.

No company would want to deliberately cripple sales of a best-selling, high-margin profit line just to start feeling more special again. But the introduction of the X phone alongside the “normal” iPhone 8 and 8S are Apple’s way of trying to have its cake and eat it too — a brand new shiny prestige object plus the regularly scheduled updates to the world’s most successful product.

Loser: Tim Cook (on his push for secrecy)

Soon after taking over as CEO of Apple, Tim Cook vowed that he would “double down on secrecy” about product launches rather than embarking on a new era of openness. The company struggled to live up to that dream for several years, mostly because leaks would emanate from the vast chain of suppliers whose help Apple relies on to make its products. More recently, however, the supply chain rumor mill has tightened up significantly, and as recently as six weeks ago there really was tremendous secrecy about what was coming at today’s event.

That started to break down on August 4 with the accidental leak of code for the not-yet-released HomePod smart speaker that incidentally contained references to a phone codenamed “D22” — the iPhone X — featuring a variety of high-end specs.

Then on September 10, someone inside the company leaked a couple of sensitive URLs to Apple blogs that contained downloadable copies of sensitive operating system code. That code revealed the iPhone 8 / 8S / X naming scheme in advance of the event as well as giving away a few other choice tidbits.

Having struggled mightily to reassert secrecy over suppliers, in short, Apple is finding its efforts undermined from inside the company.

Winner: iTunes users

Over the past year or two the Apple TV has become a somewhat dismal product — priced somewhat higher than similar offerings from Roku, Amazon, and Google but lacking the ability to display 4k video at a time when all new television sets increasingly support the standard.

From Apple’s point of view, maybe they just didn’t care.

The market isn’t especially large or lucrative and they have bigger fish to fry. But the vagaries of corporate strategy mean that even though all the little TV-connected boxes are broadly similar, only Apple’s can play movies and TV shows purchased through iTunes conveniently. So for people with a large library of iTunes content accumulated over the years (like, say, me) going with another brand didn’t make a ton of sense. On the other hand, if Apple was going to basically cede the field to competitors here then it didn’t make a ton of sense to stick with Apple either.

The Apple TV 4k isn’t going to set the world on fire or anything, but it is a nice-looking, well-specced, feature-rich box connected to your television featuring a powerful A10 processor that indicates Apple continues to be interested in this market and people already invested in the Apple media ecosystem can feel free to continue forking their money over.