Where is Apple headed after latest product event? Experts weigh in.
Apple unveiled new models of its iPad at an event on Tuesday, promising revamped devices at affordable prices.
"This is the biggest day for iPad since its introduction," CEO Tim Cook declared.
The announcement exemplified the current strategy at Apple: Rely on new models of its signature items, rather than transition to the next big product, analysts told ABC News.
While the world's second-largest company, in terms of market capitalization, risks dependence on longstanding products in a competitive sector, analysts say the approach allows Apple to capitalize upon its loyal customer base and popular devices while it develops new products like Apple Vision Pro, the company's mixed reality headset.
However, with a starting cost of $3,499 and a higher-powered version at around $4,000, Apple Vision Pro remains far from a price point that would make it affordable for a wide audience, says Ben Bajarin, an analyst at research firm Creative Strategies. Further, Apple has remained largely quiet in the industry-wide race toward artificial intelligence technologies and products.
"We still don't know what's next," Bajarin said. "That's what's hard for everybody," though he added, "There's still no company on the planet that has the level of consumer hardware scale that they do."
Apple did not immediately respond to ABC News' request for comment.
In its latest earnings report, Apple last week revealed a sales slump for some of its mainstay products. Smartphone sales dropped 10% over the three months ending in March, when compared with the same period a year earlier. Even more, iPad sales fell 17% over that period, the earnings report said.
In all, Apple sales fell 4% over the three-month period ending in March, when compared with the same stretch last year.
Speaking on a conference call last week, Cook attributed the decline in sales to a difficult comparison with the quarter one year earlier, when a loosening of COVID-related supply blockages triggered a sales boom. In the absence of that one-time surge, sales would have grown to start 2024, Cook said.
The earnings report set the stage for Apple's event on Tuesday, in which the company rolled out fresh models of its iPad in an effort to bolster sales.
Apple showcased a redesigned 11-inch iPad Air and a newly released 13-inch iPad Air, each of which is equipped with the M2 Chip. The 11-inch iPad Air cost starts at $599, while the 13-inch model goes for $799.
The company also released fresh models of its premium iPad Pro, describing it in an online statement as "the thinnest Apple product ever." The 11-inch iPad Pro starts at $999, while the 13-inch iPad Pro begins at $1,299.
Customers can order the new products online now and find them in-store next week, the company said.
Many analysts are looking ahead to the Worldwide Developers Conference next month, when Apple is expected to make a "major AI announcement," Dan Ives, a managing director of equity research at the investment firm Wedbush, said in a note to investors that was shared with ABC News.
The company may reveal plans to incorporate AI into its next round of iPhone models, potentially supercharging sales of the product, Ives said.
The combination of potential AI updates, coupled with the new iPad models, could amount to a "broader Apple hardware-driven upgrade cycle over the coming year," Ives further noted.
"We believe the seeds for an Apple growth turnaround are being planted in the field by Cook & Co.," Ives added.
Still, the strategy of improving pre-existing products rather than introducing new ones leaves Apple's long-term vision somewhat unclear, Bajarin said, while acknowledging that Apple Vision Pro – which became available for purchase in February in the U.S. only – remains in the early development stages. He also acknowledged that the buzzy product's steep price will eventually come down.
"We've gotten glimpses of what's next but everybody realizes it's not around the corner," Bajarin said. "It'll take many years to flesh that out."
In the meantime, Bajarin said, Apple will likely draw upon its massive customer base and potential AI-driven product upgrades to stabilize sales.
"I'm not concerned at all," Bajarin said. "It's not like they're losing customers to someone else. People are holding onto their stuff for longer because it's good enough."
