Apple (AAPL) managed to pack a few surprises within a relatively low-key iPhone event.
As expected, the tech giant unveiled three new iPhones at its Sep. 12th event: A 6.1-inch phone with an LCD display that's known as the iPhone XR (it will be available on Oct. 26th, with pre-orders starting on Oct. 19th), and 5.8-inch and 6.5-inch phones with OLED displays that are known as the iPhone XS and XS Max (they're available on Sep. 21st, with pre-orders starting on Sep. 14th).
Also shown off: Fourth-generation Apple Watches that sport larger screens and a slew of new health-related features. And it shared plenty of details about the chips and components going inside of its latest hardware.
Apple shares, which went into the iPhone event up over 30% on the year, fell 1.2% on Wednesday to $221.07 but were up 1.6% on Thursday morning. Here are some key takeaways from the event.
1. Apple Appears Intent on Further Growing its Average iPhone Sales Price
Though some reports had indicated Apple's 5.8-inch iPhone X successor would feature an $899 starting price, Apple has given the standard iPhone XS the same $999 starting price that it gave to the now-discontinued iPhone X. The iPhone XS Max, meanwhile, features a $1,099 starting price.
Those prices are for phones packing 64GB of flash storage. As was the case for the iPhone X, 256GB models will cost an extra $150. And this time around, Apple will also offer 512GB models that cost yet another $200 more. That means 512GB iPhone XS and XS Max models are priced at $1,349 and $1,449 in the U.S., respectively. Prices in many international markets will be higher still due to taxes and/or tariffs.
The iPhone XR, which like the XS and XS Max supports Face ID and has an edge-to-edge display, carries a $749 starting price. However, it has an inferior display, contains an aluminum frame rather than a steel one, doesn't support 3D Touch (it uses a different kind of haptic feedback system that's known as Haptic Touch) and has only one rear camera rather than two.
Clearly, Apple is intent on keeping XR sales from cannibalizing XS sales, even as it prices the XS and XS Max at healthy premiums. There's some risk that this strategy will ding iPhone unit sales, which were up just 1% annually last quarter. However, considering how iPhone X sales helped Apple's iPhone average selling price (ASP) rise by $118 annually last quarter to $724, the company has its reasons for pricing and segmenting its high-end lineup the way it has.
2. Say Adios to the iPhone SE
Also likely to boost iPhone ASP a bit: Apple is discontinuing the 4-inch iPhone SE, which carried a $349 starting price and hadn't received a major update since launching in the spring of 2016. With Apple also discontinuing the iPhone 6S and 6S Plus, which respectively carried $449 and $549 starting prices, its cheapest iPhone is now the 4.7-inch iPhone 7, whose starting price has been cut by $100 to $449.
More cost-sensitive iPhone buyers can also choose between the iPhone 7 Plus, 8 and 8 Plus; they now respectively feature starting prices of $569, $599 and $699. It looks as if Apple concluded that the market for a 4-inch phone was no longer large enough to justify developing and supporting a new iPhone SE.
3. The Apple Watch Series 4 Is an Impressive Work of Engineering
Though the fourth-gen watches feature diagonal lengths of just 40mm and 44mm (that's fractionally larger than the 38mm and 42mm lengths of Series 3 Watches), their display sizes are more than 30% bigger. The new Watches are also thinner, feature improved motion sensors and (in the case of 4G models) better cellular reception and contain a new chip module (known as the S4) that's promised to be twice as powerful as its predecessor. And Apple is still promising "all-day" battery life.
However -- as investors in Fitbit (FIT) , whose shares fell 6.9% on Wednesday, can attest -- it was the Series 4 Watch's new health features that stole the show. These include the ability to detect falls and immediately ask users if they want to place an emergency call, the ability to detect low heart rates and irregular heart rhythms and (with the help of electrodes placed on both the Digital Crown and the Watch's rear sapphire crystal) the ability to do an electrocardiogram (ECG) within 30 seconds. "I can see kids buying one for their parents and grandparents," quipped tech analyst Patrick Moorhead while discussing the Series 4 Watch's health features.
All this technology is being priced at a premium. Whereas Apple gave the non-cellular and cellular versions of the Series 3 Watch starting prices of $329 and $399, respectively, non-cellular and cellular Series 4 Watches have starting prices of $399 and $499. The Series 3 Watch now starts at $279, and the Series 1 Watch, which previously started at $249, is being discontinued. As is the ultra-costly Apple Watch Edition.
4. The New A12 Bionic System-on-Chip (SoC) Isn't Too Shabby Either
As expected, the SoC powering the iPhone XS and XR is made using a 7-nanometer (7nm) manufacturing process (believed to be Taiwan Semiconductor's (TSM) ) that delivers both performance and power consumption improvements relative to the 10nm process used to make the A11 Bionic SoC found inside of the iPhone X and 8. On the whole, Apple's chip engineering teams seem to have put the 7nm process to good use.
While the A12's two high-performance CPU cores are only said to be up to 15% faster than the A11's high-performance cores -- it looks like Apple is prioritizing battery life here -- its four low-power cores are said to be up to 50% more efficient and its GPU up to 50% faster. The A12 also packs a new image processor, as well as a revamped machine learning co-processor (known as the Neural Engine) that's said to be able to handle up to 5 trillion operations per second, far more than the A11's 600 billion.
5. A Pretty Innovative Camera Feature Was Unveiled
A number of incremental camera improvements were unveiled for the iPhone XS and XS Max. Pixel counts haven't changed, but there are a couple of new image sensors and an improved flash. There are also a slew of enhancements -- many of which leverage machine learning -- that collectively serve to improve things like dynamic range, image detail, background blur, shutter lag and low-light performance.
Notably, Apple also showed off the ability (using a slider-based editing tool within the Photos app) to change a photo's depth of field after a shot has already been taken. The feature will be supported by both the XS/XS Max and the iPhone XR.
6. The Usual Nuts-and-Bolts Improvements Also Arrived
The iPhone XS and XS Max's OLED displays are said to have 60% greater dynamic range than the iPhone X's display. The phones are also promised to respectively deliver 30-minute and 90-minute improvements to battery life under regular usage, along with better dust/liquid-resistance, improved Face ID performance and revamped stereo speakers.
The phones also come with Gigabit LTE support, and T-Mobile US (TMUS) users will be glad to know they support the carrier's 600 MHz spectrum, which it has been using to improve rural coverage. And though Apple didn't disclose it, the XS and XS Max are believed to contain more RAM than the iPhone X (4GB vs. 3GB).
7. Dual SIM Support Should Be Well-Received in Emerging Markets
Apple's new iPhones all come with dual SIM support, which -- together with a feature known as Dual SIM Dual Standby (DSDS) -- allows a phone to support two carriers/phone numbers at once. Outside of China, where Apple says it can only include two physical SIMs, this feature will be enabled through the pairing of a physical SIM and an electronic SIM (eSIM).
This feature should go over well in markets such as China and India, where a large percentage of users rely on multiple SIMs. However, there's one catch: Carrier support for eSIMs remains a work in progress. At its event, Apple indicated the ranks of carriers supporting eSIMs will include Verizon (VZ) , AT&T (T) , Vodafone (VOD) and T-Mobile parent Deutsche Telekom. The DOJ, it should be noted, is reportedly probing Verizon and AT&T over allegations that the carriers have colluded to prevent consumers from using eSIMs to switch carriers.
TheStreet's Eric Jhonsa and Annie Gaus previously covered Apple's iPhone event through a live blog.