Five Nagging Questions About the New iPhones and Apple Watch

Today’s news from Apple (AAPL) was received enthusiastically by the crowd in Cupertino, Calif., and with a little more skepticism by Wall Street, which lightly dusted Apple’s stock price. My ears are still ringing from the U2 performance that capped the event, and from the steady stream of superlatives that came from Apple’s executives on stage. While the iPhone 6 and Apple Watch look cool, five questions keep coming to mind.

1. Will the Apple Watch sell? That’s the most obvious question. Answer: Yes. But in the volumes some analysts are predicting? Prices start at $349 and are likely to run a lot higher than that for the premium “Edition” line. And the devices go on sale next year, after the holidays, when folks have already emptied their wallets. Apple is taking on a huge inventory challenge with so many SKUs: There are two watch sizes, three collections, and five kinds of watchbands. Sounds like a nightmare, though Apple has the patience and the cash—$160 billion-plus in the bank—to make some mistakes here.

2. Will young people find the Apple Watch cool? I asked Beats co-founder Jimmy Iovine the kids question after the event. He said young people will love it “because they are always getting busted for taking their phones out at the wrong time.” Now they can check their text messages surreptitiously. Thanks, Apple! And while a few of the watchbands look elegant, I’m not so sure it makes the statement young fashionistas are seeking.

3. Is the Apple Watch easy for anyone to use? Attendees at the event were shown limited demos, mostly accompanied by Apple employees. A few of the touchscreens seemed balky, but perhaps that’s to be expected for a device not yet on sale. My colleague Peter Burrows got a demo and wondered, “Is the Apple Watch manual-less?” It seems a bit complicated, with a new lexicon of horizontal and vertical swipes and a knob on the side (“the crown”) that presents a new way of navigating through content and apps.

4. Can Apple recapture ground in the phablet market? Let’s be clear. The new iPhones are going to sell like crazy. Can they increase Apple’s market share? The iPhone 6 Plus has a 5.5-inch screen and 1920 x 1080 resolution. If you’re accustomed to your 5S, it seems huge. It’s an attack on the horribly named phablet market, and Samsung is the reigning king there. Samsung has been selling phablets since 2011 with the popular Galaxy Note, so it’s brought a lot of new users into Android land. Can Apple win them back? Apple will also have to avoid digging into the market for the smaller iPad Mini.

5. Can Apple finally sell Americans on mobile payments? Plenty of phone companies have gotten to near-field communication before Apple, integrating a radio antenna and a so-called “secure element” chip into a phone. And many drugstores and retailers already accept NFC payments. But in the U.S., at least, it’s mostly been a nonstarter. Customers don’t seem to find they’re saving much time or effort by replacing a swipe with a tap. “NFC has had a great future ahead of it for decades,” joked Benedict Evans, a partner and analyst at venture capital firm Andreessen Horowitz, who was at the event. (Perhaps he read our premature, NFC-touting story from a few years ago.) Can Apple change that? It brings potentially half the U.S. phone market and all the major banks and credit card companies behind Apple Pay. If anyone can get the market excited about mobile payments, Apple can. Expect the company to put some major advertising muscle behind it.

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9 September 2014 | 9:15 pm – Source:

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