Apple’s New Devices Target Markets Led by Smaller Rivals
The company also said it planned to release iPhone software next week with a privacy feature that worries many digital-advertising companies.,
Apple unveiled a series of new products on Tuesday that showed how it continues to center its marketing pitch on consumer privacy, at the potential expense of other companies, while muscling into markets pioneered by much smaller competitors.
In an hourlong infomercial that was streamed from its Silicon Valley headquarters, Apple showed off a new high-end iPad and an iMac desktop computer based on new computer processors that Apple now makes itself. The company also said it was redesigning its podcast app, which competes with companies like Spotify, to enable creators to charge for their shows. And it revealed the AirTag, a $29 disc that attaches to key rings or wallets so they can be found if lost.
But after its product show, Apple made other news that could have far more significant, industrywide implications. The company said in a news release that it planned to release highly anticipated iPhone software next week with a privacy feature that worries digital-advertising companies, most notably Facebook.
The feature will require apps to get explicit permission from users before tracking them across other apps. As a result, when opening many apps next week, owners of iPhones will see pop-up windows that ask them whether to allow that tracking. Companies that rely on digital advertising are expected to gather less data about users as people decline that tracking.
Apple and Facebook have been locked in a war of words over the change, with Facebook arguing that it will hurt the digital advertising that helps fund free internet services. Apple has said it is merely giving consumers the right to choose whether to be tracked.
Companies like Facebook often rely on details about users and their online behavior to show them advertising that is intended to be tailored to their interests. If Apple’s changes strip the companies of that information, advertisers could be less willing to spend money with them.
On Tuesday, Apple’s AirTag immediately drew criticism from Tile, a company that for years has made similar devices for finding lost items. “We welcome competition, as long as it is fair competition,” said CJ Prober, Tile’s chief executive. “Unfortunately, given Apple’s well-documented history of using its platform advantage to unfairly limit competition for its products, we’re skeptical.”
Tile has accused Apple of anticompetitive practices since Apple began working on a competing product. Last year, Tile’s general counsel testified to Congress that, shortly after reports that Apple was working on similar gadgets surfaced, Apple pulled Tile’s devices from its stores and made it more difficult for them to work with iPhones.
Tile’s general counsel, along with executives from Apple, Google, Spotify and the dating company Match Group, is set to testify on Wednesday at a Senate hearing on Apple’s and Google’s market power and control over mobile apps.
“We think it is entirely appropriate for Congress to take a closer look at Apple’s business practices,” Mr. Prober said.
Apple has faced scrutiny in recent years for its strict control over its App Store, including Apple’s practice of forcing apps to use its payment system, which allows it to collect a commission of up to 30 percent on many app sales.
That policy has fueled a multibillion-dollar business, but also brought Apple regulatory headaches, including Wednesday’s hearing and legislative fights in several states. Next month, Apple is set to face off in a trial against Epic Games, the maker of Fortnite, which is suing Apple over its App Store policies.
As part of its announcements on Tuesday, Apple said it was redesigning its podcast app, which now offers millions of shows, up from 3,000 when Apple introduced the service 16 years ago. Starting next month, creators can sell subscriptions to their podcasts, Apple said. It was unclear if Apple would take a cut of those sales, but that has been its approach when pushing into new industries, including in apps, music and news.
The subscription service will put Apple in even more direct competition with Spotify, which has been working on its own podcast subscriptions. Spotify has been a leading critic of Apple in recent years. The music service’s business depends up reaching listeners through iPhones, putting the company at Apple’s whim. Spotify has filed antitrust complaints against Apple in Europe and has complained about the company to American regulators.
Apple also showed off a series of slimmer, faster and more colorful iMacs. The desktop computers, which have 24-inch screens, range in price from $1,300 to $1,700. Apple also unveiled its new iPad Pro, its top-of-the-line tablet, with a sharper screen, faster speeds and the ability to connect to 5G wireless networks. The iPad will cost between $800 and $1,100.
Apple’s other announcements on Tuesday included an update to its branded credit card that would allow spouses to build credit together, and improvements to its Apple TV devices, such as a new remote and faster processor that will make video play more smoothly.