Apple slashes prices, ramps up services as iPhone 11 launches
APPLE unveiled its iPhone 11 models on Tuesday with a price cut for the most basic models while also laying out plans for streaming and gaming services as it bids to weather the slump in the global smartphone market.
Price appeared to be a key consideration as the tech giant reduced the entry level price for the iPhone 11 to $699 and undercut rivals for its gaming and streaming television subscriptions.
Apple unveiled three versions of the iPhone 11 including “Pro” models with triple camera and other advanced features starting at $999 and $1,099, unchanged from last year’s prices, touting upgraded features including ultra-wide camera lenses.
The surprise from Apple was the reduction in the starting price at $699, down from $749 for the iPhone XR a year ago even as many premium devices are being priced around $1,000.
The new iPhones are “jam-packed with new capabilities and an incredible new design”, Apple chief executive Tim Cook told a launch event i n Cupertino, California as
the company set plans to sell the new handsets on September 20.
Content as ‘sweetener’
Apple’s announcements appeared to be aimed at emphasising value as the company looks to shift its business model to reduce its dependence on smartphones and tie in digital content and other services to its devices.
“We got a stream of nonstop product launches, with content being used as a sweetener,” said Techsponential analyst and consultant Avi Greengart.
“I think the iPhone 11 is compelling and may convince people to upgrade earlier than they might have otherwise given the lower price and longer battery life, not just an improved camera.”
With the new devices and services, “I think there are more reasons to stay with Apple than to defect from Apple”, said Moor Insights & Strategy analyst Patrick Moorhead.
Streaming and gaming
Apple T V+ ser v ice wil l launch on November 1 in more t han 100 count ries at $4.99 per month a nd wil l include a “powerf ul a nd i nspi r i ng l i ne-up of or ig i na l shows, movies a nd documentaries”.
While Apple’s streaming service will have limited content at first, its price is below the $6.99 for the forthcoming Disney+ service and the more expensive plans from Netflix.
“Clearly Cupertino is looking for market share coming out of the gates with these surprising price points that we loudly applaud,” said Wedbush Securities’ Daniel Ives.
Apple is featuring scripted dramas, comedies and movies as well as children’s programmes in the service, which will compete against streaming giants like Netflix and Amazon.
“With Apple TV+, we are presenting a ll-origina l stories from t he best, brightest and most creative minds, and we know v iewers will find their new favourite show or movie on our ser v ice,” said Zack Van Amburg, Apple’s head of v ideo.
Apple said customers who purchase an iPhone, iPad, Apple TV, iPod touch or Mac will get the first year of the service for free.
The company’s online gaming subscription service, Apple Arcade, will launch next week, offering exclusive titles for mobile and desktop users.
The new ser v ice, which wil l a lso cost $4.99 per month, wil l include more t han 100 ga me t it les made for Apple dev ices a nd wil l be ava i lable in some 150 count r ies.
“You can’t find these games on any other mobile platform or subscription service. No game service ever launched as many games, and we can’t wait for you to play all of that,” product manager Ann Thai told the Apple media event.
Apple a lso unvei led updates to it s iPad tablet a nd Apple Watch smart watch, a lso emphasising stable or lower pr ices wit h cuts to older versions.
“We think the lower iPhone 11 price point and trade-in programme will help promote upgrades, specifica lly in China, while t he Apple Arcade and TV+ offerings will help accelerate ser v ices grow t h,” CFR A Research analyst Angelo Zino said in a note about Apple.
Apple shares ended the formal trading day up slightly to $216.70, while streaming television rivals Netflix and Disney both finished down about two per cent.