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Apple senior vice president of worldwide marketing Phil Schiller speaks about the Apple Pencil and the Smart Keyboard prices for iPad Pro. Photo: AFP
Apple senior vice president of worldwide marketing Phil Schiller speaks about the Apple Pencil and the Smart Keyboard prices for iPad Pro. Photo: AFP

Apple breaks its own taboos to keep winning customers

Together, the tablet, stylus and keyboard make for a combination computing device that Apple executives had long said that they wouldn't create

San Francisco: As it nears a size and scope never before approached by a technology company, Apple Inc. is doing things its executives said it never would.

Apple’s co-founder, Steve Jobs, once announced that using a stylus with a computing device was passé. But guess what? The company is now offering a stylus, called Apple Pencil, for $100.

And in a move sure to make Apple old-timers squirm, the newest version of the iPad, which has an optional keyboard that attaches to the tablet, is even imitating some of the features of Microsoft Corp.’s competing product, called the Surface.

Together, the tablet, stylus and keyboard make for a combination computing device that Apple executives had long said that they wouldn’t create, perhaps indicating the people running the company today are willing to forget about the past as they try to cater to shifting consumer tastes.

But the centre of this ever-expanding Silicon Valley giant is still the iPhone, which accounts for 56% of Apple’s profits. And in a presentation that lasted more than two hours on Wednesday at the Bill Graham Civic Auditorium in San Francisco, Apple executives emphasized several new iPhone features that—despite other announcements, ranging from an improved version of the company’s television controller to chic watchbands—are still the key to Apple’s success.

“Investors have been rewarded by assuming Apple can continually push the envelope on what a phone and the company can do," said Michael A. Sansoterra, the chief investment officer at Silvant Capital Management, which owns Apple stock.

Because of the first iteration of the larger-screen iPhone 6 introduced last year, Apple’s fourth quarter of fiscal 2014, when the company had an $18 billion profit, was the most profitable quarter ever for a publicly traded company.

But meeting expectations is becoming a bigger challenge. In its most recent quarter, Apple posted quarterly revenue of $49.6 billion and a $10.7 billion profit; iPhone revenue was up 59% from the previous year. But those results still fell short of Wall Street estimates, and Apple’s share price tumbled 4% in the following day of trading.

Apple will hit this holiday shopping season with the iPhone 6S and 6S Plus, which include an upgraded, 12-megapixel camera and a new capability called 3D Touch. It can sense how hard a user is pressing a button, allowing for easier access to different menus and information. It also gives users tactile feedback when they touch their screens. Pressure-sensitive touch screens are already available on the Apple Watch and in the track pad of the new MacBook.

The new iPhones will also come in a rose-gold finish, with a new glass that the company describes as the strongest in the industry.

The phone’s touch ID sensor has been upgraded, and the phone will feature iOS 9, the newest version of Apple’s mobile operating system.

The new iPhone 6S will cost $200, and the iPhone 6S Plus will cost $300 with a phone contract. Prices for previous versions of the iPhone will drop by $100.

Apple introduced its own payment plan. Starting at $32 a month, customers can upgrade their phones every year if they buy them through Apple. The new phones will be available in 12 countries, including the US, on 25 September. They will be available for pre-order starting Saturday.

But as was clear in the presentation on Wednesday, Apple is aggressively courting customers with other product lines as it competes with competitors such as Microsoft, Samsung and Google to become the centrepiece of Internet-connected home entertainment systems.

“Apple gets a lot of credit for being innovators, but it’s about how they execute and improve on what already exists," said Tuong Huy Nguyen, a Gartner analyst. “Everyone uses the same ingredients, but a great chef can use them to make a better meal."

The makeover of the iPad is reminiscent of Apple’s decision last year to introduce the larger-screen phones, a move that many also had said the company would never make.

Timothy D. Cook, Apple’s chief executive, called the new iPad Pro “the most capable" tablet the company has ever created. With a larger screen and optional keyboard, it becomes a device that is meant to be useful for both the creation and consumption of content.

“It makes sense for Apple to reveal a new keyboard along with new, larger-screen iPads with faster processors," said Toni Sacconaghi, an analyst at Sanford C. Bernstein. “The message being that Apple is trying to push the iPad to be more of a PC replacement, a converged device of a tablet notebook that has broader computing powers."

But starting at $800 (not including the optional $170 keyboard and the $100 stylus), it is much more expensive than earlier iPads.

Sacconaghi added that Apple had long rejected the idea that it would create such a device, but now some of the pieces are in place. The new iPad runs Microsoft Office software and has a faster processor so it can handle more complex computing tasks.

Cook also presented a new, enhanced Apple TV, which represents the company’s most ambitious effort yet to become the focal point of home entertainment systems. Apple TV already streams videos and music. Now it is set to offer video games, shopping and travel tools through an expanded array of apps.

“Our vision for TV is simple," Cook said. “We believe the future of television is apps."

The new version of Apple TV also includes a remote control that could be used as a video game controller. The product now comes with a higher price tag that starts at $150, up from $70, indicating that the company is betting that consumers will think all of the new features are worth the higher price. ©2015/The New York Times

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