Exactly as rumored, Apple announced two bigger new iPhones on Tuesday, including the 4.7-inch iPhone 6 and the 5.5-inch iPhone 6 Plus. But the bigger news, if you'll pardon the pun, is two new Apple products that dispense with the iBranding: A new mobile payment scheme called Apple Pay and the firm's long-expected smart watch, called Apple Watch.
Apple's new iPhone 6 smart phones will surely be big sellers, in part because they remove the final barrier to would-be iPhone customers by offering large, usable screen sizes. Apple had previously insisted that its increasingly tiny-feeling phones with 4-inch screens were perfectly sized for human hands. But the new iPhone 6 versions follow down a path long ago championed by Samsung and other Android device makers. They are, in Apple's words, "the biggest advancements in iPhone history."
They are also impressive in their own ways, with elegantly thin designs that recall the iPad and iPod touch, Apple-designed processors and coprocessors, faster LTE networking, faster cameras, and an improved version of the useful and secure Touch ID sensor that debuted in last year's iPhone 5S.
Apple is pricing the iPhone 6 at $199 (16 GB), $299 (64 GB), and $399 (129 GB), while the iPhone 6 Plus models are $100 more for each version. Apple will continue selling the iPhone 5S ($99 to $149 in 16 GB and 32 GB versions) and the iPhone 5C ($0, 8 GB); all of these prices assume a two-year contract with your wireless carrier.
Virtually nothing about the new iPhones was unexpected: Details about these devices, including videos of fully-working prototypes that were identical to the announced products, were leaked online for weeks before yesterday's events. So it's perhaps not coincidental that the most interesting parts of the Apple announcement were two products that, while rumored, didn't really leak in any meaningful way at all.
Apple announced a new mobile payment service called Apple Pay that integrates into the iOS Passbook system and the new NFC chip and Touch ID security sensor in the iPhone 6 and 6 Plus. Initially compatible with American Express, MasterCard, Visa and most major banks, Apple Pay will allow users of these new devices to pay for products and services at over 220,000 merchant locations in the United States starting in October (and internationally at some point in the future). Major retailers and restaurants such as Bloomingdale's, Duane Reade, Macy's, McDonald's, Sephora, Staples, Subway, Walgreens and Whole Foods Market have signed on to use Apple Pay with new or existing contactless payment systems in their retail location.
Apple isn't the first to attempt mobile payments—Google implemented a similar system in Android in 2011, and Microsoft added their own mobile payment functionality to Windows Phone in 2012—but they will likely be first the first to see widespread success. Google's and Microsoft's systems require wireless carrier support and the implementation of a Secure Element in the SIM card used in the phone. But Apple placed the Secure Element chip right in the iPhone 6/Plus, bypassing the carriers. That and its market power will help ensure that Apple Pay is successful and, I think, will open the door for similar functionality on at least Android devices in the future too.
Apple's long-awaited iWatch—actually called Apple Watch—won't ship until early 2015. The firm announced the device a bit early in part to respond to long-standing complaints that CEO Tim Cook has been an able shepherd of Steve Jobs' company but has been unable to launch a new category-defining product as his predecessor did so ably. It's unclear, however, why Apple Watch will succeed where other smart watches have failed.
First, the device is expensive, with the most basic version starting at $350, about $150 more than comparable smart watches from Android device makers. It looks and appears to work similarly to existing smart watches, and like those solutions requires a nearby smart phone, in this case an iPhone, of course, to work properly. As an Apple device, the Apple Watch is of course physically stunning, and comes in a variety of styles and materials, and offers different watch faces. It also features a unique user interface that works, in part, with a side-mounted crown that recalls the click wheel from the original iPod.
Mr. Cook literally cheered the introduction of the Apple Watch, and one can only imagine that the weight of the previous few years' of complaints washed off his shoulders as he did so. But while it's fair to assume that Apple will come to "define" the smart watch product category, as it did so with previous latecomers like the iPhone, iPad and iPod, it's also fair to assume that this market will remain quite a bit smaller than those other markets. For example, hardware makers are expected to sell between 1.2 billion smart phones this year, but only 18 million smart watches will be sold during the same time frame.
But Mr. Cook needn't be defensive. While few understand the mark he's made on Apple since Steve Jobs passed away, he has in fact changed Apple for the better. He's opened up the company's software to outside extensibility, allowed the firm's designers to create software that's as pretty and usable as the hardware on which it runs, has opened up the iPad and now the iPhone to markets—like mini tablets and phablets—that were started by others, and has changed Apple's corporate culture to embrace the charitable work that Steve Jobs so disdained.
By losing the iBranding, Apple Pay and Apple Watch are sending a message that a few of us already understood: This is a new Apple. More important, it's a better Apple.
