Apple Watch

In a relatively low-key event at its Cupertino, Calif., headquarters, Apple today shared new Apple Watch bands, a smaller and less expensive iPhone and a new iPad.

After Apple’s chief executive officer Tim Cook shared that one-third of people regularly change their Apple Watch bands, he introduced new colors and bands, including a woven nylon style and sport and leather bands. This reaffirms Apple’s positioning of the watch as a fashion accessory, rather than tech device, which will be key to adoption from those beyond the tech world.

Cook also shared that watches would be less expensive; they will start at $299, rather than $349. Cook said that the Apple Watch has become top-selling smartwatch in the world. “Customers love it,” he said. “People love how the bands give the watch an entirely new look.”

The new iPhone is four inches and is called the iPhone SE, and it will start at $399 (its most affordable new iPhone) and be available on March 31. By the end of May, it will be available in more than 100 countries.

The move comes at a time when phones (or so-called “phablets”) have gotten larger, but this model is a chance for Apple to attract more customers in international markets. It also is likely welcome news for those who have adopted Apple’s pay-as-you-go model, which was shared at Apple’s event in September.

“Not all consumers favor phablets and larger screens, which have been particularly popular in Asia, and there is still demand for smaller devices,” said Forrester Research analyst Thomas Husson. “It’s time to progressively phase out the iPhone 5s and, given slower growth in the high-end smartphone segment, to launch a more affordable device.

This will likely boost iPhone sales, which, as Apple reported at this year’s first-quarterly earnings report, grew the most slowly since 2007. Apple reported that it missed analysts’ revenue expectations and saw softness in China and that renewed worries about the health of the Chinese economy. Still, Apple reported its strongest financial results ever, and that there are now one billion active Apple devices in use worldwide.

Husson said that how the smaller screens might affect so-called m-commerce (for mobile commerce) remains to be seen, but that there is not a direct corellation between screen size and mobile shopping habits. “The direct transactions are growing very quickly, but they are still a small percentage of overall sales,” he said. He said the influence of mobile phones on making a purchase is also in pre-transaction research and mobile payments. Still, he said, “I would be inclined to believe that people are more likely to buy on a larger screen, but not just because of the size of the screen; the profile of those with larger screens are also likely to be early adopters buying the latest products.”

At the event, Apple also shared a mid-sized tablet that has a 9.7-inch display. It will start at $599 (which is $200 less expensive than the larger style) and will also begin shipping March 31. Accessories available are a smart keyboard and a pencil, which was introduced in September.

Sales of the iPad have also slowed down. Forrester’s Frank Gillett said that this is new size will come in handy for original iPad users. “Apple will cut and paste much of the technology from the iPad Pro to the now mid-sized iPad,” Gillett said. “Even though unit sales have declined, the iPad will not fade away because many buyers of early iPads will likely start replacing them causing tablet and iPad sales to stabilize.”

At the beginning of the event, Cook unexpectedly addressed the company’s ongoing legal battle with the U.S. government to unlock iPhones. He defended Apple’s refusal to comply, calling the iPhone an extension of the self. “We need to decide as a nation how much power the government should have over our data and privacy,” Cook said. “We didn’t expect to be at odds with our own government, but we believe we have a responsibility to help you protect your data and privacy. We owe it to our customers and country — this is an issue that impacts all of us, and we will not shrink from this responsibility.”

President Obama recently spoke on this at South by Southwest, when he compared someone’s phone to someone’s underwear drawer, and said that giving access was sometimes the right concession to privacy. “This notion that somehow our data is different and can be walled off from the other trade-offs we make, I believe, is incorrect,” Obama said.

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