Apple Leaves Questions Unanswered in Its iPhone 6, Apple Watch Launches

As for the iPhone 6 and iPhone 6 Plus introductions, so rampant were the rumor mills about Tuesday’s announcements that it “spoiled” the suspense of the actual debuts, DisplaySearch smartphones analyst Tina Teng told us in an email. “Although iPhone 6 and 6 Plus don’t have the best specs in the market in terms of display resolution, bio sensors, and etc., Apple Pay with its strong customer base and app developer base will make iPhone 6 and iPhone 6 Plus stand out” from the competition, Teng said of the digital wallet service that Apple also announced Tuesday. Apple recited a long list of retailers that have agreed to participate in Apple Pay. But Best Buy, a prominent Apple retail partner, was among the conspicuous names missing. Best Buy representatives didn’t immediately comment.

Though Apple executives stressed the convenience of recharging the Apple Watch overnight using an inductive magnet that mounts seamlessly on the back of the watch case, they didn’t address the thorny issue of battery life, and efforts to reach Apple representatives for an answer to that question weren’t successful. Yet another unanswered question was whether iPhone lovers would flock to the iPhone 6 Plus, with a 5.5-inch display that’s 38 percent larger than any iPhone previously built.

Apple Watch will be available starting at $349 early in 2015 in six SKUs, two in each of three “collections,” Apple said. A step up from the basic model will be the “Apple Watch Sport” with a body that’s 60 percent stronger than that of the basic watch, but “incredibly light and durable,” Apple said. Top of the line will be the “Apple Watch Edition,” clad in 18-karat gold, Apple said. Besides its many features, the Apple Watch is “incredibly accurate,” and keeps time to plus or minus 50 milliseconds, Apple said. The company worked closely with clock experts around the world to “understand the cultural significance” of time-keeping, it said. “This has profoundly influenced our design.” A multitude of Apple Watch straps will be available in a wide variety of styles and colors, making for a possible boon for accessories makers even if the Apple Watch only modestly takes off.

"What we didn’t do was take the iPhone and shrink the user interface and strap it on your wrist,” CEO Tim Cook told the crowd of the design thinking behind the Apple Watch. “The display is too small. It would be a terrible user experience.” A new user interface figured prominently in every “revolutionary” product Apple has ever introduced, and so it will be with the Apple Watch, Cook said. “With the Mac, we introduced the mouse to make navigation simple,” he said. Similarly, the click wheel on the iPod allowed users to scroll through thousands of songs, he said. With the iPhone, “multitouch gave us the ability to interact with a beautiful canvas of photos and videos,” he said. Cook also addressed some security issues. (See separate report below in this issue.)

With the Apple Watch, Cook said, “We placed extra functionality in a mechanism that’s been on the watch for decades,” the stem, which Apple calls the “Digital Crown.” The crown lets one zoom or scroll through the watch’s functionality without blocking the screen, he said. The only other visible button on the Apple Watch activates a function called “Digital Touch,” Apple said. When configured for one’s personal use for reaching contacts through Digital Touch, tapping on the watch’s screen three times can be made to mean meet for lunch in 15 minutes, Apple said. One tap on the watch can check one in for an American Airlines flight, it said. And in a service that will be “widely available in the spring,” tapping on the watch will allow a guest to unlock a room door at a participating Starwood Hotels property, it said.

The research firm Analysys Mason anticipates that smart watches will become “the dominant wearable smart device by sales in early 2017,” said Martin Scott, head of the firm’s consumer services research, in a research note. By 2020, “we anticipate the smart watch market to be worth $12.9 billion annually for developed markets, with an installed base of 92.6 million devices, Scott said. “Smart watch take-up is still limited by total consumer interest. The total addressable market for smartwatches is limited by, for Apple at least, the iPhone base, but more significantly by consumer interest.” Apple “will drive this market,” while other manufacturers “will benefit from a ‘halo’ of increased interest and awareness in smart watches as a credible device type, but we do not anticipate any vendor matching Apple in the short or medium term,” he said.

Enrique Velasco-Castillo, a digital economy analyst at Analysys Mason, agreed that the Apple Watch “will at first have a chilling effect on competitors, followed by a spike in sales upon launch.” Apple’s new wearable “will significantly slow down sales of competing devices in the final quarter of 2014 as consumers wait for the Apple Watch to reach stores in Q1 2015,” he said. Analysys Mason expects just under 1 million smartwatches to have been sold by the end of 2014, he said. “This will leap to 13.6 million sales in 2015 following the Apple Watch launch."

All Apple Watch models and iPhone versions from the iPhone 5 up through the newly introduced iPhone 6 and iPhone 6 Plus will be compatible with Apple’s new digital wallet system called Apple Pay, the company said. The service will be available through 83 percent of the U.S. banks that run credit card services through American Express, MasterCard and Visa, Apple said. Apple Pay also can be used in 220,000 U.S. merchant locations that already take mobile payments, it said. Apple also is working with other retailers to implement the system, it said. They include Macy’s, Walgreens, Duane Reade, Staples, Subway and McDonald’s, it said. McDonald’s is even adding Apple Pay to its drive-through windows, it said.

Apple Pay “will change the way you pay,” Apple said. “When you add a credit or debit card with Apple Pay, the actual card numbers are not stored on the device nor on Apple servers. Instead, a unique Device Account Number is assigned, encrypted and securely stored in the Secure Element on your iPhone or Apple Watch. Each transaction is authorized with a one-time unique number using your Device Account Number and instead of using the security code from the back of your card, Apple Pay creates a dynamic security code to securely validate each transaction."

Apple is calling the iPhone 6 and iPhone 6 Plus “the biggest advancements in iPhone history.” Both are fashioned from a “unibody enclosure” of anodized aluminum that “conforms seamlessly with the shaped glass of the display, resulting in a completely smooth and continuous surface,” Apple said. They're also the thinnest iPhones ever, it said. For example, the iPhone 6 is only 6.9 mm thick and the iPhone 6 Plus only 7.1 mm thick, it said. The iPhone 5s was 7.6 mm thick, it said. A new “A8” chip in both new iPhones makes them 50 percent more energy-efficient while giving them 84 times the processing speed of the chip that preceded it, it said. Both models are the first iPhones with 802.11ac Wi-Fi performance, it said. They'll be available Sept. 19. With a two-year contract, the iPhone 6 starts at $199 for the 16-GB version, $299 for the 64-GB and $399 for the 128-GB. The iPhone 6 Plus will go for $299 for the 16-GB, $399 for the 64-GB, $499 for the 128-GB.