Apple is set to unveil the iPhone 15 on Tuesday, alongside updated watches and AirPods. And once again, the company will be prodding users toward pricier models — helping boost revenue at a time when it’s sorely needed. Also: Apple grapples with turmoil in China just days ahead of the launch event, and Sonos debuts a new portable speaker.
Last week in Power On: Apple is set to embrace an iPhone 15 charger change it never wanted. Paid subscribers got to hear about the iPhone Pro’s new colors and whether a jumbo iPad is still in the works.
The Starters
When iPhone unit sales began to plateau in 2016 — to around 200 million to 220 million devices annually — Apple Inc. had a bold idea: boosting revenue by going upscale.
A year later, in 2017, Apple put that plan into action. It released the iPhone X for $999, a hefty price at the time. A year later, it offered a larger iPhone XS Max with 512 gigabytes of storage for $1,449. Today, it offers an iPhone 14 Pro Max for $1,599 with a terabyte of storage.
The strategy worked. Annual iPhone unit sales have remained stagnant for the past seven or so years, but revenue has grown about $70 billion over that timeframe. The shift also brought a change in the way Apple measures success. It stopped reporting device unit sales in fiscal 2019, focusing instead on how much money each product brings in.
On Tuesday, that revenue could get another boost. The price of top-end iPhones are expected to climb higher in select markets, with the company offering more expensive components like titanium frames, new camera sensors and additional storage. The niceties will give users more reasons than ever to splurge on Apple’s priciest phones.
The company will further differentiate its iPhone 15 Pro models from the standard models by giving them better battery life, faster USB-C data transfer speeds, thinner borders and nicer screens. The Pro versions also will get a customizable action button and a faster chip.
For some consumers, those features could make the $200-to-$300 gap between the regular iPhone and the Pro model worth it. If Apple markets the difference as only being about $10 to $15 a month more on installment plans, the price bump could be even more palatable.
Apple also is adding an extra enticement to the top-of-the-line Pro Max: The phone will offer a wider range of optical zoom via a so-called periscope lens. This system doubles the iPhone’s ability to zoom in on an object via the hardware lens from 3x to about 6x.
In past years, the two Pro models typically only differed in terms of screen size and battery capacity. They shared the same features, internal components and specifications. (The last time Apple differentiated its high-end phones was in 2020, when the iPhone 12 Pro Max had slightly superior zoom and stabilization. But the periscope addition is more significant.) So the new approach shows Apple is getting more aggressive with its premium strategy.
The company will also push customers toward its more expensive accessories, continuing a trend from the September 2022 launch. The new Apple Watches will all get a major performance upgrade, but users will need to spring for the pricier Ultra to get a titanium case, larger screen and longer battery life. And if customers want AirPods that support USB-C charging, they’ll need to buy the costlier model, at least for now.
Apple is launching its latest iPhones at a sensitive time. There’s been an industrywide slowdown in smartphone demand, contributing to several quarters of declining sales. And now there are concerns about China, where government agencies are restricting iPhone use and a new Huawei phone could tempt consumers.
For Apple, the hope is that a feature-packed (and pricier) iPhone lineup will help the company weather any challenges.
The Bench
Apple confronts turmoil in China days before iPhone 15 launch. There have been several instances of bad news hitting just before a major Apple launch event. This happened in 2014, when celebrities’ iCloud accounts were hacked ahead of the iPhone 6. And then in 2016, Apple and the FBI went to war over encryption ahead of the iPhone SE debut.
This time around, China threatens to distract from the iPhone 15 launch. Government agencies and state-owned entities in the country are restricting iPhone use among employees, and that’s jarred Apple investors. The company’s market cap fell by nearly $200 billion over just a couple of days. But it’s hard to tell yet if the situation will have much of an impact on Apple’s sales.
The restrictions affect a relatively small number of people, and using foreign-branded technology in government offices was already frowned upon. The biggest danger is if a wave of nationalism sweeps Chinese consumers and prompts them to shun iPhones. That’s something we’ve seen in the past. In 2019, in the wake of the US blacklisting Huawei Technologies Co., Apple reported a disappointing holiday quarter — with Chinese nationalism cited as one of the reasons.
Still, that cloud blew over — and Apple has a chance to overcome this setback as well. When the new iPhones debut in China, they’ll likely come with major sales incentives and a broad marketing push. After the dust settles, Apple’s holiday season results should give us a pretty clear idea whether this was a blip or a bigger problem.
Sonos doubles battery life of high-end portable speaker. The company rolled out a second-generation version of the Move speaker that now has up to 24 hours of battery life and the ability to charge external devices. The Move is Sonos’ higher-end portable speaker, and it’s designed to be rugged enough to use outdoors. With the Move 2, the hope is to get consumers to give smart speakers another look. Demand for the devices has slowed, and people aren’t upgrading as often. But the Move 2 also comes with a heftier price: up $50 to $450.
The Schedule
Sept. 12: Apple’s iPhone 15, watch and AirPods event. The presentation will provide the first look at the iPhone 15 and Apple Watch Series 9, as well as the second generation of the Ultra watch. The event may not be quite as groundbreaking as Apple’s June unveiling of a whole new product category, the Vision Pro. But the iPhone and Apple Watch generate a lot more money, for now at least. Together, they account for the majority of Apple’s sales.
Sept. 20: Amazon’s annual new devices event. The e-commerce giant will be holding its annual device showcase about a week after Apple’s. Look for a more muted set of announcements this time around, with nothing as attention-grabbing as the original Echo or Astro home robot. Behind the scenes, Amazon’s devices division is in turmoil, with sales declining and its chief stepping down. The business hasn’t been as innovative lately and — like other parts of Amazon — had some layoffs. With all that going on, the products getting unveiled are probably going to be a bit more ho-hum. But this year’s event will have at least one wrinkle: In a shift, it will take place at Amazon’s second headquarters, or HQ2, in Arlington, Virginia.
Oct. 4: Google’s Pixel 8 and Pixel Watch 2 event. In case the Apple and Amazon events weren’t enough, Google has its product showcase planned for New York City in early October. Stay tuned for the second-generation Pixel Watch, Fitbit-related announcements, and, of course, the Pixel 8 and Pixel 8 Pro phones. The heavily leaked plans for the Pixel 8 include a new design for the camera bar on the back, a third-generation custom Google chip and AI features for photography.
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