Chief Executive Officer Tim Cook, two years after succeedingSteve Jobs, is counting on the new devices to restore some of Apple’s glow by luring new customers and reigniting growth. He’s facing pressure to reverse declining profit as smartphones from Samsung Electronics Co. (005930) and other consumer-electronics makers chip away at iPhone sales in an increasingly saturated market.
“Apple needs to both wow existing customers and convince them to upgrade their older phones, and it also needs to attract new people to their platform,” said Sarah Rotman Epps, an analyst at Forrester Research Inc. in San Francisco. “It’s been a long time since they introduced a new product, and the stakes are high.”
Apple also may add finger-sensor technology to the iPhone, along with longer battery life and a speedier processor, according to Brian Marshall, an analyst at ISI Group. The company also is likely to give customers more colors to pick from, he said.
Dark Days
The iPhone maker is also releasing an overhaul of its iOS software, which will include a new music-streaming service called iTunes Radio. Invitations for the event were adorned with bubbles in the colors used in the software update, and included the greeting, “This should brighten everyone’s day.”
The event is Apple’s first major product unveiling since last October, when the iPad mini was released. Since then, Apple has faced criticism about its labor practices in China and use of offshore tax shelters. The U.S. Justice Departmentsuccessfully sued Apple for antitrust violations related to its sale of electronic books. As the stock slumped, activist investors including David Einhorn andCarl Icahn pressed Cook to return more money to shareholders.
Apple’s share price has slumped 28 percent from a record last September, compared with a 14 percent gain in the Standard & Poor’s 500 Index during the same period. Absent new gadgets, the company’s profit growth has stalled. Net income shrank or remained flat in the last three quarters, and sales rose 1 percent in the latest quarter.
Pent-Up Demand
The financial results reflect pent-up demand for new gadgets as customers wait for a new wave of smartphones and tablets. Apple shifted a year ago to introducing many of its main products ahead of the year-end holiday shopping season, instead of releasing new iPhones, iPads and Mac computers throughout the year.
Source : bloomberg
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