Apple Watch, digital wallet debut

After ’13 slump, company out to quell post-Jobs doubters

Apple Chief Executive Officer Tim Cook introduces the new Apple Watch on Tuesday in Cupertino, Calif.
Apple Chief Executive Officer Tim Cook introduces the new Apple Watch on Tuesday in Cupertino, Calif.

Apple Inc., which moved the personal computer from a desk to the pocket through the iPhone, now wants to put a gadget on people's wrists.

The company Tuesday unveiled Apple Watch, a line of watches with a rectangular face and rounded edges, with wristbands that can be swapped out. It is Apple's first new product category since the Cupertino, Calif.-based company introduced the iPad in 2010.

Apple debuted Apple Watch at an event near its headquarters, along with Apple Pay, which is designed to make iPhones into a digital wallet. The company also showed the new iPhone 6 and iPhone 6 Plus, which come in screen sizes of 4.7 inches and 5.5 inches.

The announcements are Apple's most wide-ranging set of product introductions under Chief Executive Officer Tim Cook, who succeeded co-founder Steve Jobs in 2011. For the past three years, the company had made mostly incremental changes to existing products, raising questions of whether it could build another hit product. With Tuesday's lineup, the company is responding by leaping into new areas of the fiercely competitive consumer-technology industry.

"We have some amazing products to show you," Cook said as he began the presentation. "We think at the end of the day that you will agree that this, too, is a very key day for Apple."

Apple is already coming into this year's product unveiling in a different position than in 2013. Last September, the company's stock was slumping and it was losing market share to Samsung Electronics Co. and low-cost manufacturers such as Xiaomi Corp. Questions abounded about whether Apple could keep innovating without Jobs.

Apple's stock flirted with a record high Tuesday, with shares rising 3.4 percent to $101.70, before falling 37 cents in afternoon trading to close at $97.99. The stock has typically fallen at other events where it debuted new products. On Sept. 10, 2013, the day Apple introduced the iPhone 5s and 5c, the stock declined 2.3 percent.

Apple Watch, which was met with a standing ovation, has newly designed software that works with a dial on its side. The touch-screen device comes in two sizes, as well as in classic, sports and gold edition models. It can be used to detect pulse rate and has other health-tracking applications, as well as including apps for maps, photos, music and messages, the company said. An iPhone is required for Apple Watch to work.

"Apple Watch is the most personal device we have ever created," Cook said at the event. "We set out to create the best watch in the world."

Cook unveiled the watch after earlier introducing Apple Pay, the mobile payments system. Apple is working with credit-card companies including American Express Co., MasterCard Inc. and Visa Inc. for the service, which will be offered in the U.S. starting next month.

In introducing a mobile-payments service, Apple squarely took aim at existing payments services.

"Our vision is to replace this and we're going to start by focusing on payments," Cook said as a picture of an old wallet was flashed on screen.

The company also posted an image of a leather billfold on its website with a message saying, "Wallet, your days are numbered."

Apple Pay will work with services including mobile car-booking application Uber Technologies Inc., restaurant reservation system OpenTable and daily deals company Groupon Inc., the company said.

The new iPhones, meanwhile, will have rounded edges and a thinner frame than earlier models, as well as higher-resolution displays. The devices -- which will come in silver, gold and space gray -- will be available for order Friday and ship Sept. 19, the company said.

The iPhone remains the most important piece of its business, accounting for about half of Apple's $171 billion in revenue last year. With sales of the iPad slowing, the company needs to keep the iPhone a blockbuster to maintain growth.

Companies such as Samsung have also introduced so-called smart watches that have smartphone-like functions for checking messages and getting notifications. None has sold well. Similarly, technology that turns a smartphone into a wallet also hasn't become popular, even with efforts by Google Inc. and EBay Inc. Fitness-tracking devices such as Fitbit also have remained a niche.

According to Parks Associates, 2.8 million so-called smart watches were sold last year, along with another 13.6 million fitness tracking devices. By comparison, 1 billion smartphones were shipped last year, according to IDC.

Business on 09/10/2014

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