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Analyst commentary from Jan Dawson, Chief Analyst at Jackdaw Research

Apple's Event Highlights its Unique Approach, Tests its Storytelling Ability

Apple today announced the iPhone 7 and Apple Watch Series 2. The comment below may be attributed to Jan Dawson, Chief Analyst, Jackdaw Research. Jan may also be reached at jan@jackdawresearch.com or (408) 744-6244, and is also at the event in person.
 
Apple has rethought the Apple Watch significantly since its first release. It’s refocused the line, eliminating some of the earlier tiering, and has also refocused the purpose of the Watch. Apple’s original emphasis on apps and communication has faded into the background as health and fitness features have come to the fore. With Series 2, Apple appears to be focused mostly on the health and fitness features, while hoping watchOS 3 will finally spawn the apps the Apple Watch has arguably lacked in its first year and a half on sale. In the process, prices have come down fairly significantly too, especially on the Series 1 Watches. The new features and upgrades combined with the lower pricing for older Watches should help stimulate sales, but we’re talking about incremental growth and not a step change here.

The iPhone 7 packed few surprises given the many leaks over recent weeks. But the story and positioning around the new devices were always going to be the most important part of today’s event. Phil Schiller made a point of first talking up the iPhone 7 camera and its improvements before moving on to the iPhone 7 Plus and its dual cameras. And he also talked about the history of both the 3.5mm audio interface and Lightning, and the advantages of Lightning, while Jony Ive talked about Apple’s long push towards wireless interfaces. There will certainly be some people who prefer smaller phones who will be upset that the best camera is exclusive to the 7 Plus, but history suggests these advances will make their way down the line in future devices. And there will be those who are upset by the death of the headphone jack, but Apple will largely neutralize those concerns by providing an adapter in the box. Overall, the advances in this year’s phones on top of those in last year’s devices should make for a fairly significant upgrade for the typical two-year upgrader. This event was a big test of Apple’s ability to continue to tell a compelling story around its annual product upgrades, and early sales of the iPhone 7 will be a good indicator of whether it succeeded in weaving a narrative that people find compelling.

Overall, Apple’s new devices are typical of what’s now a fairly well-developed approach. It has used its ownership of the whole device to marry hardware and software advances in areas from camera performance to the new EarPods to the new home button. But it also continues to rely on partners like Nike, Hermès, and Nintendo to add value to its devices with accessories and software which go beyond what Apple itself can provide.

Two other things worth a brief mention. Apple managed to scoop itself on Twitter, which marks a rocky debut for the new @Apple Twitter account. The tweets were quickly deleted and didn’t share too much detail, but were an unfortunate distraction and detraction from the main event. The other thing worth noting is Tim Cook’s continued focus on social good at Apple – the time spent on the ConnectED grant and Apple’s part in it were an element of his traditional opening monologue. This focus on doing good in the world continues to be one of the main things that sets Tim Cook apart from Steve Jobs as CEO at Apple.
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