Apple (AAPL) is at it again. The tech giant revealed its most recent updates and advancements in a special event on September 9. Featured in the event were the latest iterations of the iPhone, iPad, iOS, Apple TV, WatchOS, and Apple Watch.
Apple’s flagship product, the iPhone, has undergone its routine iteration, but the end result is anything but routine. The iPhone 6s and 6s Plus are perhaps the most advanced smartphones the world has seen thus far. The addition of 3D touch sensors was the highest touted new feature by Apple. With this feature, users are now able to use the amount of pressure they apply to the screen to select a variety of functionality options from one ordinary selection. Using different amounts of force, users are able to dip in and out of various content all while retaining the context in which the information is being sent. The engineering behind 3D touch is nothing short of amazing, as the hardware used is approximately 10 times more efficient than that used in the average phone. This function is but a tiny glimpse into the unlimited potential Apple can create from the way its groundbreaking hardware and software work together.
The advancement of Apple’s A9 chip is similarly impressive; it now allows for performance in handheld devices that was formerly only available in desktop computers. iPhone 6s and 6s Plus CPU speeds are up to 70% faster and GPU speeds are up to 90% faster than the previous iteration of the iPhone thanks to the A9 chip. As one would expect, the most recent rollout of iOS, iOS9, is the most advanced yet, providing for Wi-Fi and LTE speeds up to twice as fast as the previous iteration of the operating system.
The iPhone’s camera has also been upgraded. It now is equipped with a 12 megapixel rear iSight camera, compared to the 8 megapixel camera on the iPhone 6. The rear camera is capable of taking high-definition videos with ~4 times the resolution of the standard 1080p high-definition video. These new features are now wrapped in same grade aluminum commonly used in the aerospace industry, and the screen is made from the strongest, most durable glass of any smartphone available, according to Apple. For what it’s worth, the new iPhones are available in two additional colors: gold and rose gold.
Speaking of gold, that is precisely what Apple believes it has struck with its most recent iPad, the iPad Pro. Its expanded target demographic with the new model is in its name: professionals. With a 12.9” display and nearly twice the CPU performance of the iPad Air 2, the iPad Pro makes multi-tasking a breeze. It is geared toward not only consuming content, but also creating content. The larger screen and available attachments, such as a portable and fully-sized smart keyboard, make the new iPad more like a computer than any other tablet.
Along with being larger, the iPad Pro screen has the highest resolution of any iOS device. It is also the first iPad to automatically adjust display settings based on the content on the screen at any given moment. This feature helps extend battery life as it improves energy efficiency. Other accessories for the device include the Apple Pencil, a feature the company had previously steered clear of, but gave in likely due to consumer demand, particularly from the usage needs of professionals. The Apple Pencil is incredibly responsive to both tilt and pressure, allowing the user to create a range of artistic strokes and effects. Apple is not going to replace the computer with its first iteration of the iPad Pro, but with an increasingly wide range of people utilizing the iPad for an increasingly wide range of uses, the idea behind the new model is the beginning of something to that effect.
Apple has also set out to revolutionize the way we watch TV. Apple TV is attempting to capture a shift in consumer preferences to a viewing manner in which the viewer decides the programming, not the TV. But the new Apple TV does so much more than simply display programming. The AppStore will soon be available on Apple TV, enabling users to turn their living room into anything from a dance studio to a classroom; family game night will never be the same.
The new tvOS and the Siri Remote will compete directly with products such as Amazon’s (AMZN) Echo. The voice controlled remote can take commands and search across all apps and services, or within specific apps. The Siri Remote also uses a touch screen to scroll, select, and navigate selections on the TV, similar to the action used to control iPhones. According to Apple, “The Siri Remote takes the work out of watching TV,” and the Apple Watch takes the work out of checking your iPhone.
We covered all of the incredible features of the Apple Watch after its initial release this spring. A few new features were recently announced, such as “time travel,” which allows users to check weather, events, and other aspects of their future schedules with the turn of a dial. Several different styles of watch-face and band are now available for the Apple Watch as well. Most importantly, the Apple Watch has received a 97% customer satisfaction rating in its first few months of availability, and the time may be approaching when an established, sustainable wearable technology market emerges. Only then will the Apple Watch begin to have a material impact on Apple’s financial performance.
So what does all of these product updates mean for investors?
In short, everything. These types of special events help drive the Apple brand. Not many companies can hold a conference in the legendary Bill Graham Civic Auditorium, a venue commonly reserved for rock stars, to showcase existing product iterations. The executive team played to a full house, and the crowd was hanging on to every word. The Apple brand is unlike anything else we’ve seen before.
What’s more impressive is Apple’s incredible financial stability. As readers know, we are constantly immersed in free cash-flow-analysis, and Apple may be the king of cash. In a recent article we quantified Apple’s tremendous investment case and showed the incredible pace at which the firm generates free cash flow, which continues to support its fortress-like balance sheet. The financial flexibility very well may grant Apple the freedom to do whatever it wants with respect to future product developments.
We can’t imagine a world without Apple and its products, and we can’t imagine any scenario in which this is not the case for the foreseeable future. The fall of an apple led to the discovery of one of the most important concepts in the history of our world (gravity), and the ascension of Apple very well may lead to another monumental development. We may have lightened our position a bit, but we won’t be caught on the sidelines.