Security, Supply Chain Issues Overshadow Apple’s Annual Product Debuts

As it has nearly every September for over a decade, Apple is preparing to unveil its newest slate of iPhones, the 13th generation overall and the second with 5G capabilities. And while analysts aren’t expecting a massive redesign of the flagship phone, increased processing power and improved cameras are among the anticipated features.

Lurking in the background of this year’s event, though, are dark clouds that threaten to impede the mountainous sunrise Apple has chosen to represent “California Streaming.” For one, the event comes less than 24 hours after Apple was forced to rush-fix a security gap that has allowed NSO Group, an Israeli cybersecurity firm, to silently infect iPhones using iMessage since February. Apple in a statement said attacks using the flaw “are highly sophisticated, cost millions of dollars to develop, often have a short shelf life and are used to target specific individuals,” meaning they are not a threat to the majority of users. Still, security experts cautioned that people should update their devices immediately.

Read more: Apple Fixes Flaw That Was Causing Software Breach Since February

Additionally, as much as executives likely want to avoid discussing how nearly 18 months of supply chain issues have impacted the company, they may be forced to — in the form of higher prices. Apple tends to keep the cost of new phones relatively close to previous models, but chip shortages and other logistical hurdles are expected to cause a bump. A basic iPhone 12 currently starts at $799, while the more advanced iPhone 12 Pro starts at $999.

On a conference call with investors and analysts in July, CEO Tim Cook said Apple is “paying more for freight than I would like to pay,” and noted that it’s unclear how long supply constraints will last. “We’ll do everything we can to mitigate whatever set of circumstances we’re dealt,” he said.

Last month, it was reported that TSMC, Apple’s leading chip supplier, is looking to increase costs by as much as 20% starting in January. David McQueen, a director at market research firm ABI Research, told CNN that despite the high-profit margins that Apple sees on its iPhones, “it would be of no surprise if Apple passed this rise onto the consumer, potentially pushing prices of its iPhones to their highest ever level.”

“California Streaming” is also happening less than a week after a judge ruled that the California-based tech giant can’t force developers to use its in-app purchasing, opening the door for developers to set up links or otherwise communicate with users in ways that steer them away from Apple’s payment platform.

Apple last month also settled a $100 million class-action lawsuit brought by app developers, which allows developers to connect directly with end users via email and offer alternative payment options for them to purchase subscriptions and other offerings.

Read more: Ruling: Apple Can’t Force In-App Purchasing

An Eye on Fitness

In addition to iPhones, Apple may also have major software announcements in addition to the new iPhones. Some suspect “California streaming” may refer to an expansion of Apple TV+, but perhaps more likely is an expansion of Apple Fitness+, a workout class subscription service that offers a range of exercises. Though Apple releases new workouts regularly, the only options available are recorded; most connected fitness companies also offer livestreamed classes.

To be sure, Apple faces an uphill climb if it wants to be a true competitor in the connected fitness space. Though Peloton is still stumbling after recalling its treadmill products earlier this year, other companies have moved to fill the gap — and retailers such as Athleta are considering fitness platforms as a potential way to connect with consumers.

Related news: Connected Fitness Competition Grows for Peloton

Still, compared to other connected fitness companies, Apple might have a slight advantage. While a Peloton bike, for example, starts at $1,495, Apple Fitness+ requires only an iPhone — which over 116 million Americans already have — and the Apple Watch (in addition to a $10 monthly membership fee). New Apple Watches currently start at $400.

Apple is also rumored to be getting ready to launch the newest model of its smartwatch, the Series 7 model, with updated health features and better battery life. Features such as glucose monitoring and body temperature readings aren’t expected to come until next year, though Apple may announce a slightly larger screen and faster processor in preparation for these items.

A new generation of AirPods, said to be more in line with the higher-end AirPod Pros with spatial audio support and touch controls, could also be unveiled. The new earbuds are rumored to come with a redesigned charging case that includes a 20% bigger battery.