While there were a number of surprises regarding the details and features of Apple's (AAPL 1.27%) new products revealed during the company's big event yesterday, the main products Apple refreshed were largely expected: new iPhones, an upgraded Apple Watch lineup, and next-generation AirPods Pro. With no major surprises, investors may be tempted to think that the event was a letdown. But here's what's critical about the company's latest products: They represent Apple's most important business segments. In other words, the tech giant just refreshed the products that are arguably most important to its business growth -- just in time for the holidays.
Meet Apple's newest products
It was no surprise to see new iPhones at Apple's Wednesday event. September is the tech company's typical month for iPhone launches. The iPhone lineup consisted of four new devices: the 14, 14 Plus, 14 Pro, and 14 Max. The base iPhone 14 model is, of course, the cheapest of the new devices, with a starting price of $799. The 14 Plus, 14 Pro, and 14 Max have starting prices of $899, $999, and $1,099, respectively. The 14 and 14 Plus both sport an A15 Bionic chip with a 5-core graphics processing unit (GPU), while the 14 Pro and 14 Pro Max boast Apple's A16 Bionic, which Apple said in its press release about the device is "the fastest chip ever in a smartphone." Among the many other differences between the two new lower-priced phones and the new Pro iPhones, the Pro phones feature an impressive new camera system.
Image source: Apple.
New Apple Watch devices include the Apple Watch Series 8, Apple Watch SE, and a higher-end Apple Watch, the Apple Watch Ultra. The new flagship Ultra set a new standard for Apple Watch, making it accessible to users requiring features for more extreme fitness activities. The new watch boasts multiday battery life under normal use, including a lower-power setting that can push the device's battery life to 60 hours. The Ultra watch also boasts a bigger, brighter display and a more rugged design. Of course, customers will have to pay up. The Apple Watch Ultra costs $799. This compares to a $249 starting price tag for the Apple Watch SE and a $399 starting price for the Apple Watch Series 8.
Finally, Apple's new AirPods Pro is priced at $249. While the popular device looks the same from the outside, they're far more capable than their predecessors. Apple's next-gen AirPods Pro boasts approximately twice the active noise canceling as the previous model, touch control for media playback and volume adjustments, increased battery life, more ear tip sizes, an upgraded charging case, and more.
Important holiday catalysts
It would be an understatement to say the iPhone is important to Apple. It's vital. iPhone sales accounted for nearly half of the company's revenue in its most recent quarter. So, a fresh lineup of new iPhones will help Apple as it enters the holidays.
But what may be overlooked by some investors is that Apple's "wearables, home, and accessories" business segment recently became the company's second-biggest product segment (note that Apple's services business is the company's second-largest segment, but it is not a product segment). This means Apple Watch and AirPods, which are included in this segment, have morphed into a significant catalyst for the company. Even more, the segment is growing rapidly. Wearables, home, and accessories revenue rose 25% year over year in fiscal 2021.
With so many new products across the company's two most important product segments, Apple could achieve meaningful revenue growth in the coming quarters. Of course, if Apple's recent supply chain bottlenecks are any indication of the challenges the company will face this holiday season, it may ultimately be production, not demand, that will determine the company's sales growth during the upcoming months. Still, a fresh, new product lineup across key categories for Apple increases the odds of meaningful sales growth if its production constraints ease.
