Oct. 30 was a big day for Apple (NASDAQ:AAPL). The company held a special event where it announced long-awaited updates for two of its most beloved Mac computers, including a new MacBook Air. It also unveiled new iPad Pros billed as the biggest upgrade since the prosumer tablets were first introduced. And the company released new versions of many of its operating systems, with new, high profile features. This should have been the Apple equivalent of hitting it out of the park.
Instead, the positive buzz has been tempered by a lot of head scratching, griping and even bricked devices.
But at least Apple stock got a small boost.
Head Scratching Over New MacBook Air
The new MacBook Air was one of the most highly anticipated releases of the year. A large contingent of Apple laptop users (myself included) have been nursing MacBook Airs with low resolution screens and hopelessly outdated processors for two reasons: they don’t have the Butterfly keyboard that has proven so problematic in other Apple notebooks, and they still have USB-A ports.
At yesterday’s event, AAPL took the wraps off a new MacBook Air that finally gets a high resolution Retina display, along with new 8th generation Intel (NASDAQ:INTC) Core processors. That was great news.
However, the existing, tried and true keyboard was replaced with the Butterfly version, and all legacy ports were ditched altogether in favor of USB-C. The company didn’t leave a single USB-A port. Most existing accessories, including thumb drives, require an adapter, dongle or hub to connect to the new MacBook Air. And the new MacBook Air further confuses Apple’s laptop lineup. As Engadget points out, there are now three Mac laptops priced within $100 of each other, and they overlap with each other in many respects.
The New iPad Pro
The New iPad Pros look like killer tablets, and boast impressive specs. They also added USB-C support and the new Apple Pencil 2 stylus attaches magnetically and automatically charges via induction. All very cool. But some deeper digging revealed a few burns. Current iPad Pro owners won’t be able to use their existing Apple Pencil if they upgrade, instead they’ll have to fork out an additional $129 for a new Apple Pencil 2. And they also won’t be able to use that new Apple Pencil 2 with previous generation iPad Pros.
While adding USB-C support is a move that many users had been hoping for, the new iPad Pro killed Apple’s Lightning port. And some iPad Pro owners are now realizing that means Lightning accessories they’ve invested in can’t be used with the new models.
It’s not unreasonable for a company to raise prices when it releases new products. If nothing else, inflation has to be accounted for. But AAPL is taking some heat for significantly raising prices on the products it announced yesterday. The new MacBook Air sees its starting price rise from $999 to $1,199. The new Mac Mini increases from $499 to $799. The $99 Apple Pencil goes to $129 for the Apple Pencil 2. The 10.5-inch iPad Pro started at $649, but the new 11-inch iPad Pro starts at $799.
With last year’s iPhone X, Apple significantly hiked the price of its flagship smartphone. Doing so raised the average sale price (ASP), which more than offset slowing unit sales volume and helped Apple stock to continue chugging along. It appears that the company is using a similar pricing tactic with the new products it announced yesterday. Doing so does have some risk, especially since it now lacks a laptop under $1,000, which could impact sales to students and price-conscious shoppers.
watchOS Upgrade Pulled After Bricking New Apple Watches
In addition to new hardware announcements, Apple rolled out new versions of many of its device operating systems yesterday. Unfortunately, watchOS 5.1 ended up bricking some brand new Apple Watch Series 4 smartwatches. Apple had to pull the update and affected users will apparently need to visit an Apple Store for service.
Apple made many Mac and iPad fans very happy yesterday. But it also made big moves that could cause a backlash among its core users. And the degree to which prices were increased for new products is raising eyebrows, and could lead to further erosion among Mac sales. Overall, what should have been a great day for AAPL and Apple fans was tempered by grumbling, with a botched system update hitting the new (and significantly more expensive) Apple Watch Series 4 being the icing on the cake.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.