Apple has introduced a cheaper version of its smartwatch, in its latest attempt to broaden the appeal of its trend-setting products with many consumers feeling the pinch from the economic fallout of the coronavirus pandemic.
The scaled-down Apple Watch follows on the heels of a budget iPhone the company released five months ago as the economy cratered and unemployment rates rose above the levels reached during the financial crisis more than a decade ago.
Apple also took the wraps off a new high-end watch model, a next-generation iPad and a couple of new subscription services during a virtual event held Tuesday.
Apple added a faster chip to its base model iPad, which it priced at $329 for consumers and $299 for education customers. Apple's new iPad Air will cost $599 and look more like its iPad Pro models and a new A14 processor chip that Apple says will be the first to use a 5-nanometer chip manufacturing process.
The company normally also rolls out its new iPhones at this time of year, but production problems caused by the pandemic have delayed their release until at least October.
CEO Tim Cook didn’t mention iPhones during Tuesday’s one-hour presentation recorded at the company's massive, but now mostly empty, headquarters in Cupertino, California.
The Apple Watch has never come close to rivaling the iPhone's popularity, but it does dominate the market for smartwatches. Canaccord Genuity analyst T. Michael Walkley estimates about 51 million Apple Watches will be sold this year, a 5% increase from last year. The research firm GlobalData pegs Apple's share of the $64 billion smartwatch market at roughly 60%.
The new discount model, called the Apple Watch SE, will sell for $279 and be available beginning Friday. The price is a markdown from the $399 that Apple is asking for the next version of its higher-end watch, the Series 6. Apple watches have been selling for an average of $377, based on Walkley’s calculations.
Apple added more features to help the watch monitor its owner’s health, including a sensor that can read blood oxygen levels. The feature, specific to the Series 6, could be timely, given that COVID-19 frequently attacks the lungs.
Apple also announced a new fitness subscription service tailored for its watches for $10 per month, as well as a new option that will bundle its existing music, video, news and gaming services into a package that will cost $15 to $30 per month.
"With Apple One, you can access the best of Apple entertainment across all your favorite devices with one simple subscription," said Apple senior vice president of internet software and services Eddy Cue.
Tens of millions of people already subscribe to Apple's various services, helping the company double its revenue during the past four years within a division that creates products for the more than 1 billion iPhones, iPads, watches and other devices that the people already use.
The services division also includes Apple’s app store, which is under regulatory scrutiny for charging a commission of up to 30% for products sold through other companies who have no other option but to use the store to reach the mostly affluent consumers who buy iPhone products.