by Apple unveiled new models of its iPad at an event on Tuesday, promising refurbished devices at affordable prices.
“This is the biggest day for iPad since it was introduced,” declared CEO Tim Cook.
The announcement reflected Apple’s current strategy: Relying on new models of its signature items, rather than transitioning to the next big product, analysts told ABC News.
While the world’s second largest company, in terms of market capitalization, risks reliance on long-established products in a competitive sector, analysts say the approach allows Apple to take advantage of its loyal customer base and popular devices and is developing new products such as Apple Vision Pro, the company’s mixed reality headset.
However, with a starting price of $3,499 and a higher-powered version at around $4,000, Apple Vision Pro is still far from a price point that would make it affordable for a broad audience, says Ben Bajarin, an analyst at research firm Creative Strategies . Additionally, Apple has remained largely silent in the industry-wide race toward artificial intelligence technologies and products.
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“We still don’t know what’s coming,” said Bajarin. “That’s what is difficult for everyone,” although he said, “There is no company on the planet yet that has the level of scale of consumer hardware that they do.”
Apple did not immediately respond to ABC News’ request for comment.
In its latest earnings report, Apple revealed last week that sales of some of its flagship products were down. Smartphone sales fell 10% over the three months ending in March, compared to the same period a year earlier. Even more, iPad sales fell 17% over that period, the earnings report said.
Overall, Apple sales fell 4% over the three-month period ending in March, compared to the same stretch last year.
Speaking on a conference call last week, Cook attributed the decline in sales to a difficult comparison to the year-ago quarter, when the easing of COVID-related supply disruptions fueled a sales boom. In the absence of that one-time boost, sales would have increased until early 2024, Cook said.
The earnings report set the stage for Apple’s event on Tuesday, in which the company introduced new models of its iPad in an effort to bolster sales.
Apple showed off a redesigned 11-inch iPad Air and a newly released 13-inch iPad Air, each equipped with the M2 chip. The cost of an 11-inch iPad Air starts at $599, while the 13-inch model goes for $799.
The company also released new models of its premium iPad Pro, describing it in an online statement as “the thinnest Apple product ever.” The 11-inch iPad Pro starts at $999, and the 13-inch iPad Pro starts at $1,299.
Customers can order the new products online now and receive them in-store next week, the company said.
Many analysts are looking forward to next month’s Worldwide Developers Conference, when Apple is expected to make a “major AI announcement,” Dan Ives, managing director of equity research at investment firm Wedbush, said in a note to investors that was shared by ABC News.
The company may reveal plans to incorporate AI into its next round of iPhone models, which could significantly boost sales of the product, Ives said.
The combination of possible AI updates, along with the new iPad models, could be Apple’s “broader upgrade cycle in the coming year,” Ives also noted.
“We believe Cook & Co is planting the seeds for Apple’s growth turnaround,” Ives said.
Still, the strategy of improving existing products rather than introducing new ones leaves Apple’s long-term vision somewhat unclear, Bajarin said, acknowledging that Apple Vision Pro — which was available for purchase in February in the US only – still early. stages of development. He also admitted that the steep price of the winning product will eventually be reduced.
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“We’ve got a glimpse of what’s ahead but everyone understands it’s not around the corner,” Bajarin said. “It will take many years to do that.”
In the meantime, Bajarin said, Apple will likely take advantage of its massive customer base and potential AI-driven product upgrades to stabilize sales.
“I have no worries,” said Bajarin. “It’s not like they’re losing customers to someone else. People are holding onto their stuff longer because it’s good enough.”
Where is Apple headed after the latest product event? Weigh in experts appeared first on abcnews.go.com
