Apple treads water while awaiting 5G

Apple has been holding its iPhone customers in limbo for years. Instead of brand-new features it provides tweaks to existing ones while it waits for the enhanced mobile capabilities of 5G technology in 2020. The new smartphones it announced on Tuesday offer more of the same.

Apple no longer provides unit sales for smartphones so it is impossible to know exactly how well its most important product is selling. But in the nine months to end-June it reported net sales of $109bn for iPhones, compared with $128bn the year before. Sales of all other Apple categories wearables, iPad tablets, services and Mac computers rose. The only good news is that innovation from rivals posed no big threat after Samsung’s much-hyped foldable phone bombed.

The globular rainbow symbol Apple used to advertise 2019’s product event seemed to promise something out of the ordinary. “We have a huge morning for you with some truly big announcements,” promised CEO Tim Cook. Yet the first presentation on stage was for a new version of a video game first released in 1981.

In the end the colours simply symbolised Apple’s growing universe of products and services. The $4.99 a month rate for a new TV streaming service was the only real standout moment. Apple does not need to undercut Netflix. Users who can afford to spend more than $1,000 on a phone are not bargain hunters. By making its streaming service one of the cheapest on the market and free for a year with a new gadget purchase it will also forgo a revenue bump.

Instead, Apple appears to be trying to use its growing services business as a means to persuade buyers to pick its hardware over rival products.

The prices may be low but Apple is still staking its growth on subscription services. /London, September 11

© The Financial Times 2019