Apple shows off new gadgets, but Pay is bigger bet
CUPERTINO, Calif. - Apple showed off thinner iPads and a new iMac with a high-resolution display Thursday. Sleek and stunning, yes, but not likely to spark the next iRevolution. The tech giant's bigger strategic bet is that mobile pay service Apple Pay, debuting Monday, will be the next thing you didn't know you needed - but now can't live without.
The thinner iPad has a faster processor and a better camera, as Apple tries to drive excitement for tablets amid slowing demand. The company also released an update to its Mac operating system and introduced a high-resolution iMac model that might appeal to heavy watchers of television over the Internet.
The new iPad Air 2, at a quarter of an inch "thin," also adds many of the features previously available on iPhones. That includes the ability to take burst shots and slow-motion video, and unlock the device with a fingerprint ID sensor instead of a passcode.
Meanwhile, Apple made its new Mac operating system, Yosemite, available as a free download starting Thursday. The new 27-inch iMac - which Apple is dubbing the "Retina 5K" model - went on sale Thursday as well.
The company also said Apple Pay, its new system for using iPhones to make credit and debit card payments at retail stores, will launch on Monday.
Much of the emphasis at Thursday's product-launch event centered on how Apple's devices work well together because the company makes both its hardware and software.
"They're designed to be incredible products individually but they're also designed to work together seamlessly," CEO Tim Cook said. "This is our vision of personal technology, and we are just getting started."
The new iPads should sell well during the upcoming holiday shopping season, even as the worldwide tablet market is showing signs of slowing growth, analysts said. But they're not the kind of game-changing new product that has made Apple a darling of Silicon Valley and the tech industry's most valuable company.
Instead, the industry will be watching closely to see how consumers react to Apple Pay. Forrester Research analyst Frank Gillett says the service is "hugely important" because it puts Apple in the middle of a wide range of consumer transactions. That underscores Apple's value as a brand and gives people a powerful new reason to buy iPhones, iPads and other gadgets.
Apple Pay is designed to work on the company's newest iPhones, which contain a chip that allows payments at a special terminal in retail outlets. It also will be available on the new iPad Air 2 for online purchases only.
"It's a strategic advance not just because it may be a new revenue source, but because it injects Apple into a whole different value stream" for customers and the company's business partners, Gillett says.
Mobile pay isn't new; rival tech companies and the banking industry have worked on such systems for years. But Apple is launching its new service at an ideal time, says Gartner tech analyst Van Baker. Consumers are increasingly worried about the security of traditional credit and debit cards and U.S. merchants are facing new mandates to switch to safer chip-based cards or other payment systems.
"Consumers are going to have to learn a new way to pay," Baker said. "That levels the playing field for new technology."
Assuming there are no system breakdowns or security flaws, Apple will get the benefit of pioneering a mobile payment system that has widespread brand recognition and acceptance from consumers, retailers and banks. That's crucial to its success, said MasterCard Inc. executive James Anderson, but he doesn't expect Apple will hold the market by itself. The payment processor plans to work with other digital systems as well.
"We've done a lot of work with Google over the years and I expect we'll continue to work with them," Anderson said.