Apple’s product-launch extravaganza will be muted this year because of Covid-19 – CNBC

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CEO Tim Cook waves while arriving on stage during a previous Apple Worldwide Developers Conference (WWDC) in San Jose, California.

David Paul Morris | Bloomberg | Getty Images

Apple will begin its annual blitz of new products and updates next week, but the rollouts will look different this year.

On Tuesday, Apple will stream a product launch from its Apple Park headquarters in California, but if it’s like the announcements from Apple’s developer conference from this June, large parts of the presentation will be prerecorded. CEO Tim Cook will emcee in front of an empty theater. Guests have not been invited to Apple’s campus to watch the launch live because of the coronavirus pandemic. 

This fall will be a major test for Apple, which uses its annual product launches to generate enthusiasm for its new products ahead of the crucial holiday quarter.

In past decades, Apple’s hyper-polished keynotes have become cultural icons. Millions around the world tune in, late-night TV hosts parody the way Cook and other Apple execs speak, and high-profile celebrities and business executives have even attended the shows on Apple’s campus.

They’re high-energy stage shows, and they make hearing about new high-priced gadgets fun. Last year, nearly 2 million people tuned in for part of the iPhone 11 launch on YouTube. 

Some of that energy will be lost in the transition to a virtual event — like a live crowd, which was missing from Apple’s June stream. But Apple can make sure that its prerecorded videos are flawless, its products are ready to ship, and customers can still watch the presentation online.

Next week is also a test for Apple’s newest senior vice president. In August, Apple announced that Phil Schiller, the company’s top marketer and one of its most influential executives, will step down to an advisory “fellow” role at the company, although he’s still listed on Apple’s leadership page. 

Now Greg Joswiak is Apple’s senior vice president for marketing, and although he’s a 20-year Apple veteran known to company watchers, he’s had limited exposure to the public, although he has been making more appearances onstage at Apple product events lately. If the event goes off without a hitch, it could provide a preview of a new Joswiak approach for Apple launch events. 

Apple might not release new iPhones

The Steve Jobs Theatre at Apple Park in Cupertino, California. 

Justin Sullivan | Getty Images News | Getty Images

Tuesday’s launch event might not even have new iPhones — Apple could choose to save the 5G iPhone reveal for a later event.

Apple hasn’t commented on what it is launching on Tuesday, but analysts and a report from Bloomberg suggest that the first event will focus on new Apple Watch and iPad models. The tagline on media invites to the stream is “Time Flies,” a seeming reference to the watch. 

“While historically Apple has announced the new iPhone lineup at this time of the year, expectations this time around are for a delay in iPhone launches and for the event to focus on iPads and Apple Watch,” JPMorgan analyst Samik Chatterjee said in a note on Wednesday. 

Holding its iPhone event separately and later would mark a shift for the company. Since 2012, Apple has announced its new iPhones in September. However, the devices haven’t always gone on sale immediately after the launch event. In 2017, a redesigned, more expensive version of the iPhone, the iPhone X, went on sale in early November amid reports that the new design was hard to build and in short supply. Apple has also held October launch events in some years to release products that it did not have time to cover in September. 

But an iPhone-free event won’t be a total surprise. Electronics manufacturing has been disrupted by the pandemic, and Apple’s employees have been mostly working from home since March. Restrictions on international travel has made trips to China to work out problems on the factory line significantly harder.

In July, Apple CFO Luca Maestri said in a call with analysts that the company is expecting iPhones to be available in October, or perhaps later. “As you know, last year we started selling new iPhones in late September. This year we project supply to be available a few weeks later,” he said.

The iPhone is also becoming less important to Apple. In the most recent quarter ending in June, only 44% of Apple’s revenue was from iPhones. A year earlier, the iPhone made up 48% of revenue, and in the June 2015 quarter it was a whopping 64%.

Meanwhile, iPad sales grew 31% in the June quarter, significantly higher than expected because of the pandemic. An updated model with a better screen and more power could tap into a large base of people looking for computers to work and entertain themselves while stuck at home.

The Apple Watch is a core part of Apple’s “wearables” business, which is one of the company’s fastest-growing units. Chatterjee expects the new watch to have additional hardware sensors, which will make the updated version more attractive to people interested in digital fitness. 

No red carpet feel

Whatever Apple releases, it will surely garner headlines around the world. Most of the issues with a remote conference have feasible solutions. Apple will still get its message out — Apple fans and customers can watch the event live on YouTube on Tuesday.

Instead of having hundreds of people from multiple countries touch and take photos of new devices immediately after the event, Apple can send review units to reporters and social influencers for further coverage.

But Apple’s events have value to the company aside from pure marketing considerations. They’re an important goal line for Apple’s annual development cycle and a point of pride for the company. Having a feature or project presented live by a senior executive at a launch event is a goal for most Apple designers and engineers. 

They are also usually an opportunity for Apple people to hobnob with people like celebrities who may be considering expanding their business with the iPhone maker. During a launch event in spring 2019 for Apple TV+, its streaming service, Hollywood royalty including J.J. Abrams, Steven Spielberg, and Oprah Winfrey were there. Power players attend, too: Goldman Sachs CEO David Solomon was in the house to mark the launch of the Apple Card partnership in 2019. Former Disney CEO Bob Iger popped up at one event in 2017. NBA star Anthony Davis was at last year’s launch. 

High-profile musical guests have been part of the show, too. In 2018, Lana Del Rey debuted a new song at an Apple launch event in Brooklyn. Sia performed when the iPhone 7 was launched in 2016.

Celebs and influencers often pose with Cook and other execs for photos uploaded to Instagram after the show is over. The feeling at the launch events is usually less computer convention and more red carpet. 

That kind of flash and celebrity can’t be replicated on a video stream, but millions of people will still tune in to see the latest Apple goodies, which are the real star of the show. 

Correction: Updated to reflect the iPhone 11 launched last year.

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