Apple iPhones get bigger and pricier, Watch turns to health
(Adds analyst comment in paragraph 9)
By Stephen Nellis and Sonam Rai
CUPERTINO, Calif., Sept 12 (Reuters) - Apple Inc
introduced its largest-ever iPhone and a watch that detects
heart problems on Wednesday in an attempt to get customers to
upgrade to more expensive devices in the face of stagnant global
demand for smartphones.
The relatively small changes to its lineup, following last
year's overhauled iPhone X, were widely expected by investors,
who sent the company's shares down 1.2 percent to $221.07.
The strategy has been successful, helping Apple's stock up
more than 30 pct this year and making it the first publicly
traded U.S. company to hit a market value of more than $1
Apple's new iPhone XS, pronounced "ten S," has a 5.8-inch
(14.7-cm) screen, and starts at $999. The XS Max, the largest
iPhone to date and one of the biggest on the market, has a
6.5-inch (16.5-cm) screen, and starts at $1,099.
“They have finally added a larger-screen phone so that they
can directly compete with the Galaxy Note9 products," Gartner
analyst Annette Zimmermann said at the event at Apple's Silicon
Valley headquarters, referring to rival Samsung Electronics
, which has led the trend toward big-screen phones.
"The larger screen will be very important in China to turn
around the trend there, because they have lost some share in the
last few years, partly because of screen size,” she added.
Apple also introduced a lower-cost 6.1-inch (15.5 cm) iPhone
XR made of aluminum, starting at $749.
The iPhone Xs Max's display size is 26 percent larger than
the previous largest iPhone display, marking the largest
increase in screen size since 2014, wrote analyst Gene Munster
of Loup Ventures in a note.
This year's three top phones are all more expensive than
last year's models.
With two of them starting at $999 or higher in the United
States, Apple appears to be taking advantage of a strong U.S.
economy, low unemployment, and rising household wealth. The
median U.S. household income rose for a third straight year in
2017 to the highest on record since 1967 by one measure,
government data showed on Wednesday.
MEDICAL DEVICE MARKET
Looking for ways to lessen reliance on phones, which
represent more than 60 percent its revenue, Apple opened its
event by announcing the new Apple Watch Series 4 with
edge-to-edge displays, like its latest phones, which are more
than 30 percent bigger than displays on current models.
It is positioning the new watch as a more comprehensive
health device, able to take an electrocardiogram to detect an
irregular heartbeat and start an emergency call automatically if
it detects a user falling down, potentially appealing to older
The U.S. Food and Drug Administration said it worked with
Apple to develop apps for the Apple Watch and has been taking
steps to ease the regulatory pathway for companies seeking to
create digital healthcare products.
"This is a pretty big deal," said healthcare tech analyst
Ross Muken at Evercore. "This update really establishes the
company’s increasing efforts to push the watch as a serious
medical device. Apple seems to be diving into heart disease
first, the most common cause of death around the world, making
serious moves as a health company."
Shares of fitness device rival Fitbit Inc fell 6.9
percent after the Series 4 announcement.
Apple's event was held at the Steve Jobs Theater at its new
circular headquarters in Cupertino, California, named after the
company's co-founder who wowed the world with the first iPhone
Executives made no mention of a wireless charging mat, or
content deals for Apple TV, as some industry analysts had
"We all knew this was going to be a transitional but not
transformational phone update," said Trip Miller, managing
partner at hedge fund Gullane Capital, which owns Apple shares.
(Reporting by Sonam Rai in Bengaluru and Stephen Nellis in
Additional reporting by Supantha Mukherjee in Bengaluru, Nadine
Schimroszik in Berlin and Yasmeen Abutaleb in Washington
Writing by Bill Rigby
Editing by Bernard Orr and Nick Zieminski)
First Published: 2018-09-12 09:01:00
Updated 2018-09-12 22:46:44
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