DealBook Briefing: Apple’s Gift to Shareholders, Courtesy of the Tax Cuts

The iPhone maker’s $100 billion stock buyback was made possible by the new tax law, but it isn’t a giant deal or an investment in R.&D.

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Tech Fix: Your iPhone Slowed Down. Here’s What to Do When the Solution Is Just as Slow.

Apple may be dealing with the fallout for a while. The company published a lengthy memo in December saying that smartphone batteries became less effective over time and that its software was intended to prevent iPhones with older batteries from unexpected shutdowns. Apple also apologized to customers for the slowdowns, offered discounts for its battery-replacement program and said it would introduce software to gain visibility into the health of an iPhone battery.

Yet since then, consumer advocacy groups have filed lawsuits against the company for failing to disclose that the software would throttle old iPhones. The Justice Department and the Securities and Exchange Commission have also started an inquiry into the matter, according to a person with knowledge of the situation, who asked not to be named because the details were confidential. Bloomberg earlier reported the inquiry.

Early Wednesday, Apple said in a statement that it had received questions from some government agencies and that it was responding to them; the company did not specify the agencies it had heard from. The Justice Department declined to comment.

As for the wait times that Ms. Schipper and others are experiencing for a battery replacement, a spokeswoman referred to Apple’s support webpage, which states that battery supplies at its stores may be limited.

Let’s not wait around. Here’s a guide to other solutions to keep an iPhone running in the absence of an Apple battery replacement.

Third-Party Repair Shops

Plenty of irate Apple customers are turning to local third-party repair shops to get their iPhone batteries replaced. At Mega Mobile Boston, twice as many customers are coming in for iPhone battery replacements than in years past, said Adam Fullerton, the store’s operations manager.

Third-party repairs are a decent — but imperfect — solution. One drawback is that they vary in quality; some repair shops buy lower-quality batteries that don’t last. So to find a good shop, rely on word of mouth and reviews on the web, similar to how you might seek out a good car mechanic.

Another issue is that if you service your phone with a third-party battery and later take your device in to Apple for repair, the company could refuse to service your phone. So if you go the third-party route, chances are you will have to stick with third-party repair shops through the end of your phone’s life.

There’s a less risky route here. On Apple’s support webpage, you can look up third-party repair shops that are authorized by Apple as service providers. These are fixers who have been trained by Apple and carry original parts. But the list is short.

If you find a good local fixer, there are plenty of benefits to sticking with one long term. For one, third-party shops tend to have shorter waits. Mr. Fullerton said his shop could typically get an iPhone battery replacement done in about 30 minutes. The process involves opening the device, cleaning away the old waterproofing adhesive, replacing the battery and applying a new waterproofing adhesive.

For another, local repair shops make their prices competitive with the manufacturer’s. In the case of batteries, many shops are discounting their battery replacements to match Apple’s $29 pricing.

“We’re probably losing money on it with the cost of a half-hour time from a technician,” Mr. Fullerton said. “But it’s like a loss leader in any other industry. If you’re Best Buy and you get them to buy one item at cost, maybe you can teach them something about your business.”

Finding a good repair shop can feel daunting, but if you ask around, your peers will probably have recommendations. For a sample, here’s a list of highly recommended repair shops in the United States that I compiled from talking to repair experts I trust:

■ In Chicago: uBreakiFix Chicago

■ In San Francisco: MacRepair

■ In New York: Simple Mac

■ In Boston: Mega Mobile Boston

■ In Washington: Computer Geeks

■ In Austin, Tex.: Austin Mac Repair

Fix It Yourself

You can always replace an iPhone battery by yourself. The pros: You can choose the best components for repairs and minimize costs. The cons: Learning repairs can be time consuming, and if you mess up, you have no one to blame but yourself. And again, Apple stores could refuse to service your phone if it sees you have repaired it with third-party parts.

A good place to start for D.I.Y. repairs is iFixit, a company that provides instruction manuals and components for repairing devices. It is offering discounts on battery replacement kits for older iPhones, which cost $17 to $29. Each kit includes a new battery and the tools for disassembling iPhones.

Installing a phone battery can be intimidating. Replacing an iPhone 7 battery, for example, requires eight tools and 28 steps. Kyle Wiens, the chief executive of iFixit, said some customers also opted to buy a battery from iFixit and then take it to a local repair shop for installation.

Carry a Battery Pack

If you don’t feel confident hiring a third-party fixer or installing your own battery, you can always wait for Apple to replace your battery. But since that could take weeks or months, don’t suffer with a sapped phone battery in the meantime.

A better temporary solution is to invest in a battery pack that you can carry around until replacement batteries arrive at an Apple store. Wirecutter, a New York Times company that reviews products, has tested hundreds of battery packs to recommend a few. My favorite is the Anker PowerCore 20100, which can charge a smartphone every day for a week.

Ms. Schipper, the Seattle resident, is considering buying a battery pack. In the meantime, she is constantly plugging her iPhone into a power outlet because her battery lasts only two hours a day.

Yet she has resisted what she thinks Apple wants: for her to buy a new phone.

“I was tempted to just chuck this phone and suck it up and spend $1,000-plus and get the iPhone X,” she said. “I said, ‘No, darn it, I have a budget I’m saving up.’ I’m not going to let Apple push me around.”

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Is Apple Slowing Down Old iPhones? Questions and Answers

What Apple is acknowledging is a power management technique in which the iPhone scales back processing power to keep the device running for longer when its battery health is low. Lithium ion batteries have a limited number of charge “cycles” before they can no longer be recharged properly. Apple’s website says the battery loses about 20 percent of its original capacity after 500 charge cycles.

In other words, if your iPhone is beginning to run out of battery capacity, these slowdowns might kick in to keep it running for longer or prevent it from shutting down unexpectedly.

Apple is not admitting to planned obsolescence. If Apple explicitly said that they injected code into older iPhones to slow them down because new ones came out, that would be admission. All it is admitting to now is trying to keep the old iPhones running for longer.

Does this change your conclusion last month that this is not a conspiracy to force users to buy new phones?

The premise of my previous column was that the vast majority of slowdown problems are fixable without buying a new phone. That point stands, and now we have even more information supporting that premise: a battery replacement also helps.

How many users does this affect?

Apple has said the power management technique works on iPhone 6, 6S, SE and 7.

What else could be slowing the older phones down?

Often, a buggy operating system upgrade can cause glitches when running apps. Another common cause is having little available device storage. Smartphones rely on flash storage, which keeps data in the cells of semiconductor chips. When stored, that data is scattered across the drive. So when you call it up by opening an app or a document, you are retrieving it from multiple parts of the drive. If lots of space is occupied, the data gets crowded and the device may feel sluggish.

Some users say that installing bigger batteries seems to fix the problem. Does that make sense? What else can users do to, short of buying new phones?

I would recommend paying a third-party repair shop to replace the aged battery with a fresh one. This will cost between $20 and $70, depending on where you live and which iPhone you own. Repair shops will probably recommend against installing a battery that has a larger capacity than the original, as there can be risks of damage.

The other solutions I wrote about in my last column included doing a clean install of the operating system and freeing up storage on the device. There is a scenario where you absolutely can’t get around buying a new phone: App and game makers design their software to work better on newer, faster devices. So if you have an older smartphone and you want a brand-new game with heavy graphics to work as well as it possibly could, you’ll want a new phone.

Is this unusual? Do other smartphone makers — or, more broadly, electronics companies — do this, too?

I don’t find the power management technique that surprising or unusual. You have probably noticed that when your smartphone (iPhone or Android) is running out of battery, like when there is less than 10 percent, the device begins to run more slowly. That is partly to keep it running for longer.

Could Apple have avoided this by, say, using a different type of battery?

We all dream about the day that the tech industry will adopt a longer-lasting, smarter battery than lithium ion. But battery technologies have to pass rigorous safety testing — if something goes wrong, they are miniature bombs. (You saw what happened with Samsung’s Galaxy Note 7.) Lithium ion, though flawed, is still the safest and most easily reproducible battery technology on the market.

Apple is known for its masterful marketing. Do you think it has handled this controversy well?

No, it could have avoided controversy by being more transparent to begin with. It could have notified people that a power management mode was kicking in to keep their iPhones running for longer because their batteries are running out of juice. That would also inform people that they should be getting their batteries replaced. Because Apple was not transparent, it’s natural for people to suspect it of deliberately crippling their devices to get them to buy new ones.

This episode is a good reminder that even digital devices need maintenance. Many people believe that because gadgets lack moving parts, they should keep working as intended. But we still need to take care of them. Last year I wrote a column about maintaining our devices, which included tips like replacing aging batteries, freeing up storage and, in the case of desktop computers, removing the cover and blowing out dust.

[Want more advice and tips on the technology changing how you live? Sign up for the Bits Newsletter here.]

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Tech Fix: A New Phone Comes Out. Yours Slows Down. A Conspiracy? No.

[READ NEXT: The iPhone 8 Reviews: What the Critics Say]

“There’s no incentive for operating system companies to create planned obsolescence,” said Greg Raiz, a former program manager for Microsoft who worked on Windows XP. “It’s software, and software has various degrees of production bugs and unintended things that happen.”

Here’s what happens: When tech giants like Apple, Microsoft and Google introduce new hardware, they often release upgrades for their operating systems. For example, a few days before the iPhone 8 shipped in September, Apple released iOS 11 as a free software update for iPhones, including the four-year-old iPhone 5S.

The technical process of upgrading from an old operating system to a new one — migrating your files, apps and settings along the way — is extremely complicated. So when you install a brand-new operating system on an older device, problems may occur that make everything from opening the camera to browsing the web feel sluggish.

“It’s like changing the plumbing of the house without changing anything else,” said Scott Berkun, an author and a former manager for Microsoft who oversaw engineers that worked on Windows operating systems and web browsers.

The good news is that because tech companies are not intentionally neutering your devices, there are remedies for when you think your three-year-old iPhone or your seven-year-old Windows computer has become slow or short-lived. Here’s a guide to speeding up your troubled gadgets, based on interviews with information technology professionals and operating system experts.

Start Fresh

Tech companies make it simple to upgrade to a new operating system by pressing an “update” button, which seamlessly migrates all your apps and data over. While that’s convenient, it isn’t the best way to ensure that things will continue running smoothly.

A better practice is backing up all your data and purging everything from the device before installing the new operating system. This “clean install” works more reliably because the engineers developing operating systems were able to test this condition more easily, Mr. Raiz said.

[READ NEXT: What You Need to Know About The iPhone X]

Let’s say, for example, you have an iPhone 6 with 100 apps installed, four email accounts and 2,000 photos. It is more likely that a quality-assurance engineer tested installing a new operating system on a blank iPhone 6, rather than an iPhone 6 with the same setup as yours.

So if you want to minimize the chances of something going awry, resist the easy update path and opt for a clean install. For smartphones, I recommend backing up your data to your computer. For computers, you could back up your data to an online service or a portable drive. After the operating system installation is complete, you can then safely restore your data and apps to the device from the backup.

Remove the ‘Cruft’

Sometimes you can do some light maintenance to speed up your device. Over the long term, an operating system accumulates system files, settings, logs and other data; I.T. experts call this “cruft.” This can bog down your device.

For computers, there are some apps for cleaning up your system. Mac users can download a free app called Onyx, and Windows users can run a cleanup utility included in the system. For iPhones and Android devices, you can open the settings app and select reset settings. (Just make sure you back up first in case there are important settings you may lose.)

[READ NEXT: The iPhone X is Cool. That Doesn’t Mean You’re Ready for It]

Be Mindful of Your Storage

Here’s something many people don’t realize: Just because your iPhone or Samsung phone has 64 gigabytes of storage doesn’t mean you should fill it all the way up. The device will generally run faster if more of its storage is available.

That’s partly because your device needs space to move data around and download software updates. But it’s also related to how the storage technology works inside smartphones and modern laptops.

Smartphones and newer laptops rely on flash storage, which stores data in the cells of semiconductor chips. When data is stored on a flash drive, it is scattered across the drive. So when you are pulling data to open an app or a document, you are retrieving it from multiple parts of the drive. If lots of space is occupied, the data gets crowded and the device may feel sluggish.

“If you fill these things up, it doesn’t get to operate as well,” said Brian Denslow, a technician for TechCollective, an information technology consulting company in San Francisco. Mr. Denslow said a good rule of thumb is to buy more storage than you think you will use. If you think you are going to use 64 gigabytes on an iPad, for example, buy the 256-gigabyte model.

I also recommend freeing up a huge amount of space by managing your photo library in the cloud. You can upload all your albums to a service like Google Photos and periodically purge all the images from the device itself. I did this recently on my iPhone 7 that was nearly full and seemed to be slowing down; purging the photos freed up about 50 gigabytes of data, and the iPhone feels as good as new.

Invest in Your Infrastructure

Your device may seem slower for reasons unrelated to the device. Mr. Denslow, the technician, said many apps relied on an internet connection, so a shoddy Wi-Fi router might be the real bottleneck.

To get a nice boost, invest in a modern Wi-Fi system. I recommend products like Google WiFi and Eero, which are so-called mesh networking systems that help you seamlessly set up multiple Wi-Fi stations to get a strong signal throughout the home. They are pricey, but upgrading your infrastructure will do more than buying a new phone.

“Instead of spending $1,000 on a phone every year, spend $500 on networking,” Mr. Denslow said. “It’s not sexy, but it provides more benefits over a long period of time.”

[READ NEXT: The iPhone 8: A Worthy Refinement Before The Next Generation]

Consider Upgrading

At the end of the day, there are many reasons your device may feel slow. New operating systems carry more powerful features that were designed to work better on new devices. In addition, developers of third-party apps typically prioritize making software for newer handsets, and sometimes they even discontinue support for old gadgets. If there are important tasks that your older device cannot do proficiently, consider an upgrade.

Mr. Raiz, the former Microsoft program manager, said he had recently encountered problems after updating his iPhone 6S to iOS 11. Some functions, like the ability to search for an app, no longer worked. Resetting the device’s settings fixed the problem, but he said he would most likely buy a new iPhone soon anyway to keep up with the latest technologies.

“There’s only so much you can do if your device is multiple release cycles behind,” he said.

[Want more advice and tips on the technology changing how you live? Sign up for the Personal Tech Newsletter here.]

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The Times Review of the First iPhone: ‘Amazing’ but ‘Not Perfect’

For many, the iPhone wasn’t just a device, it was an experience. The Times’s Farhad Manjoo recently wrote about his introduction to the product.

It wasn’t the first smartphone, the first mobile computer, or the first anything, really.

But when I got my hands on the first iPhone in 2007, I knew it was unlike any machine I’d ever used before, and it would forever alter my tech-addled life. It turns out it probably altered yours, too.

In the early days, it was the simple things that were magical.

The internet in your pocket. Connectivity at all times — news, baseball scores, recipes. (How innocent we were.)

“Maybe all the iPhone hype isn’t hype at all,” Mr. Pogue mused in 2007. Even so, he continued, “some of the criticisms are justified.”

“There’s no memory-card slot, no chat program, no voice dialing,” he wrote. «The browser can’t handle Java or Flash, which deprives you of millions of Web videos.”

Other inconveniences: no video, no way to send “picture messages (called MMS) to other cellphones” and no third-party apps. (The App Store wasn’t born until 2008.)

Then there were typing woes. “Tapping the skinny little virtual keys on the screen is frustrating, especially at first,” Mr. Pogue wrote.

And what remains a constant bane for users: battery life.

“Apple says that the battery starts to lose capacity after 300 or 400 charges,” Mr. Pogue wrote. “Eventually, you’ll have to send the phone to Apple for battery replacement, much as you do now with an iPod, for a fee.”

No replaceable batteries? Times reporter Joe Nocera said at the time that this revelation “stopped me in my tracks.” He asked Apple how it planned to service its batteries, but he didn’t get a straightforward answer.

“It is about assured obsolescence,” Rob Enderle of the Enderle Group, a technology consulting firm, told Mr. Nocera in 2007.

As much as things have changed, some things really do stay the same.

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At $1,000, Apple’s iPhone X Crosses a Pricing Threshold

But this time, the company is pushing into luxury territory. The new phone will cost as much as the company’s entry-level MacBook Air laptop. “They’re doubling down on their strategy: They are going much more to the high end,” Ms. Ruth said.

Apple declined to comment before the product announcements scheduled for Tuesday. (On Saturday, Steven Troughton-Smith, a developer who combed through the iOS 11 software, found references indicating that the new high-end phone will be called the iPhone X.)

Investors are betting that Apple’s move up the price ladder will pay off with much higher profits, especially in mature markets like the United States and Western Europe, where many of the buyers will be people upgrading from older iPhones. The company’s stock has risen by nearly 50 percent over the past year as anticipation has built about the 2017 models.

How the iPhone Is Faring Against Android Around the Globe

Apple has been fighting an uphill battle with Google’s Android operating system in countries like Brazil and India. But it has shown strength in China, a crucial market for the company.

Active smartphone subscribers






Active smartphone subscribers




Apple’s strategy carries risks, however, especially in developing countries where smartphone sales are growing briskly but its market share is a blip compared with devices running Google’s Android software.

In Brazil, for example, Apple devices will account for just 8 percent of the 125 million active smartphone subscriptions this year, according to Forrester, a research firm.

Steep taxes, higher retail profit margins, and added costs from a botched attempt at building iPhones in Brazil have pushed the price of an iPhone 6s, a two-year-old model, to more than $1,000 at Casa Bahia, a store in the Copacabana neighborhood of Rio de Janeiro. In late August, the retailer was selling Apple’s most basic smartphone, the iPhone SE, for more than $600, while a Samsung Galaxy J1 Mini, which runs Android, was just $136.

At another Rio store recently, Vanessa Perreira, 25, a university student, was browsing the 65 models on display, looking at the offerings from Samsung and LG but ignoring the six from Apple. She once owned an iPhone, she lamented, but could not afford to continue buying them. “Price is the most important factor for me,” she said.

Still, the iPhone is coveted by wealthier Brazilians, many of whom buy the phone while traveling abroad to avoid their country’s high costs. “There will always be users in Brazil that will be interested in buying it,” said Tina Lu, a senior analyst with Counterpoint Research.

China’s reception to the $1,000 iPhone will be even more crucial to Apple. The Greater China region, which includes Hong Kong and Taiwan, contributed $8 billion to Apple’s revenue last quarter, but sales have been sluggish.

Brian X. Chen, our lead consumer technology writer, gives answers to more than two dozen reader questions about Apple’s new devices.

Apple’s market share has declined slightly in China over the past year, according to Counterpoint. High-end phones from Chinese brands like Huawei and Oppo have gained ground, in part by undercutting Apple on price.

The new iPhone has the potential to reverse that trend. More than any other tech product, the iPhone has long denoted status in China. If a new iPhone looks the same as the previous one — and won’t be recognized by others as new — it often doesn’t sell well.

“If the phone’s appearance changes, I think people are going to be crazy about it, because we’ve seen the iPhone with a similar look for such a long time now,” said He Peihuan, a Shanghai-based financial analyst.

Apple has also faced pressure from the Chinese government. State-run media outlets have called attention to a feature that tracked a user’s most commonly visited locations and also criticized the company’s after-sales policies. And government employees and leaders at state-run companies try to avoid being seen using foreign technologies like the iPhone.

For all that, Zhang Xiang, a phone reseller and repairman in Shanghai, said that he still expected strong demand for the new iPhone. “I think when people can afford it and want a high-end phone with good features, they’ll still choose to buy an iPhone,” he said.

One important factor offsetting the next iPhone’s expected high price is the increasing prevalence of financing options for buyers around the globe. In the United States, most phone carriers allow customers to spread the cost of a new phone over two years, and the new phone would add less than $10 a month to the payments a customer would make on an iPhone 7 Plus.

“There’s not that much difference in the monthly fee you have to pay,” said Brian Blau, a technology analyst at Gartner, a research firm.

Similar installment purchase plans are emerging in China, Brazil and other countries, making Apple’s products more affordable there.

“I’ve seen some banks providing installment plans for the iPhone with very low, or even no interest, so ordinary people could get an iPhone that way,” Mr. Zhang said.

Neil Cybart, an independent Apple analyst who writes at the site Above Avalon, said that he would be looking to see what Apple says about lower-priced models on Tuesday. Analysts already expect the company to announce two phones that are upgrades of the existing iPhone 7 and 7 Plus and will be priced at similar levels to those phones’ current prices. But if the company also offers a model below $400, particularly in developing countries, that could help lure a new generation of users onto the iPhone platform, he said.

That would play into Satish Meena’s theory of iPhone adoption in developing countries.

Mr. Meena, a senior forecast analyst at Forrester who is based in New Delhi, said that in places like India and Brazil, where millions of new smartphone users are entering the market, the first phone that people buy is a cheap Android. The second tends to be a fancier Android. Finally, they upgrade to an iPhone.

“The iPhone is your dream phone,” he said.

Correction: September 11, 2017

An earlier version of a chart accompanying this article misstated the number of active smartphone subscribers in various countries. The figures for each country are for millions of subscribers, not thousands.

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Apple Moves Toward a Wireless Future, One Tweak at a Time

For more than a decade, Apple has experienced explosive revenue and earnings growth thanks to new hit products, including the iPod, the iPhone and the iPad. That streak stopped with the release of the Apple Watch last year, though executives maintain that sales have exceeded expectations.


The Nintendo game Super Mario will come to the App Store. Credit Jim Wilson/The New York Times

Apple’s stock price is just about where it was a year ago, and this year the company has posted two consecutive quarters of declining revenue. For the first time, iPhone revenue also dipped, as the global market for smartphones began to shrink and consumers began replacing their smartphones less frequently. Executives expect sales to fall again this quarter.

But there are probably plenty more dollars to be wrung from Apple’s existing products. This update to the iPhone has been a cause for excitement — and controversy — among Apple fans.

Removing the port for headphones from the iPhone means they now connect only wirelessly or through a charging port. The redesign also encourages users to upgrade to Apple’s new wireless earbuds, AirPods, which cost $160.


The new version of the Apple Watch emphasizes fitness and health. Credit Jim Wilson/The New York Times

While the updates to the iPhone were incremental, Apple executives hinted that the iPhone changes were part of a companywide effort to wirelessly connect everything inside a home. Timothy D. Cook, Apple’s chief executive, explained how his company’s technology could be the central way to control all sorts of home wireless devices.

“This is Apple’s way of saying that someday the smartphone experience will be wireless,” said Tim Bajarin, an analyst at Creative Strategies. But will it be enough to reignite iPhone sales? “Not by itself,” he said. “But this along with the other tech upgrades like cameras and processors should drive high interest for those needing to upgrade, as well as draw interest by new customers too.”

Talk about a wireless future had people already looking toward big changes that could be in store for next year, the 10th anniversary of the iPhone, and beyond. Mr. Bajarin, for example, expects Apple to introduce wireless charging to the iPhone in the near future. Should wireless connections become a bigger part of Apple’s future, it is not a leap to imagine closer integration between the company’s various devices and its software meant for cars, called CarPlay.


Philip W. Schiller of Apple introduced the new iPhones’ revised home button with force sensitivity, which will vibrate to give feedback. Credit Jim Wilson/The New York Times

This isn’t the first time Apple has risked angering customers by moving away from a traditional design. Its desktop computers accommodated a 3½-inch disk, rather than the standard 5¼-inch floppy disk; and more recently it eliminated the CD drive and several ports from its laptops. Some customers considered those changes shocking, even downright hostile acts. They got over it.

“Apple has a history of doing what it wants and making people believe that it’s the best idea ever,” said Julie A. Ask, an analyst at Forrester Research. “The company has an affluent customer base that has in the past paid to upgrade because it cares about the quality of the experience.”

Other cosmetic changes were made to the new iPhone 7 and 7 Plus, which look much like their predecessors and will have starting prices of $650 and $770. The phones will come in new colors, including a shiny, jet black and matte black, in addition to the existing options of silver, gold and rose gold.

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Apple also unveiled an updated version of the Apple Watch that includes GPS tracking, which would make it more appealing to runners. It has a faster operating system that lets apps work more quickly and could make performing some tasks easier on the watch than on an iPhone. The Apple Watch Series 2 starts at $370. And the original Apple Watch, rebranded Apple Watch Series 1, starts at $270.

The company emphasized that the Apple Watch was a useful tool for monitoring health, one of the few functions that users have embraced, and announced a partnership with Nike. It also made the new version water-resistant and added tracking for swimmers.

“The watch is still missing a killer app,” Ms. Ask said, noting that some of the functions that the Apple Watch performs especially well, such as payments, have not taken off.

The Apple Watch still accounts for such a tiny portion of the company’s revenue that Apple doesn’t break out the number when it reports quarterly earnings. But Mr. Cook revealed on Wednesday that Apple was now the No. 2 global watch brand, measured by revenue, behind Rolex, and that Apple’s was the top-selling smartwatch.

The overall market for wearable devices is growing. In the United States, 63.7 million adults, or about a quarter of the population, use a wearable device. That number is expected to increase by more than 17 percent next year to 74.8 million adults, according to the research firm eMarketer.

Apple has grown increasingly dependent on software and services for growth. On earnings calls with analysts, the company has emphasized the role that software and services play in keeping customers hooked on Apple’s products. Ben Schachter, an analyst with Macquarie Securities, estimates that services such as Apple Music account for nearly one-third of Apple’s quarterly profits.

Mr. Cook underscored that idea at the event with updates on Apple Music and the App Store. Mr. Cook said that Apple Music had 17 million subscribers and that the company would work to nail down more exclusive deals with artists. He also said that the hit game Super Mario would come to the App Store and that Pokémon Go would be available on the Apple Watch.

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Apple Sees Value in Its Stand to Protect Security

The company is playing the long game with its business. Privacy and security have become part of its brand, especially internationally, where it reaps almost two-thirds of its almost $234 billion a year in sales. And if it cooperates with one government, the thinking goes, it will have to cooperate with all of them.

“Tim Cook is leveraging his personal brand and Apple’s to stand on the side of consumer privacy in this environment,” said Mark Bartholomew, a law professor at the University at Buffalo who studies encryption and cyberlaw. “He is taking the long view.”

Mr. Cook, who has called privacy a civic duty, said as much in a letter to Apple customers on Tuesday. He described how the United States government was asking for a special tool to break into the San Bernardino attacker’s iPhone and said, “The government suggests this tool could only be used once, on one phone. But that’s simply not true. Once created, the technique could be used over and over again, on any number of devices.”


An Apple Store in Beijing. For Chinese consumers, the iPhone’s high security has become a way to thwart hackers and criminals. Credit Greg Baker/Agence France-Presse — Getty Images

An Apple spokeswoman declined to comment beyond the remarks in Mr. Cook’s letter.

The business advantage Apple may get from privacy has given critics an opening to attack the company. In a court filing on Friday, the Justice Department said Apple’s opposition to helping law enforcement appeared “to be based on its concern for its business model and public brand marketing strategy.”

Apple senior executives responded that their defiance was not a business choice. They said there had not been any business fallout and that Mr. Cook had received supportive emails from customers across the country.

In fact, Apple has not made a point of advertising data security and privacy. The company has quietly built privacy features into its mobile operating system, known as iOS, over time. By late 2013, when Apple released its iOS 7 system, the company was encrypting by default all third-party data stored on customers’ phones. And iOS8, which became available in 2014, made it basically impossible for the company’s engineers to extract any data from mobile phones and tablets.

Mr. Cook has also been vocal about how Apple is pro-privacy, a message that he discussed more widely after revelations from the former intelligence contractor Edward J. Snowden about government surveillance. Mr. Cook argued that the company sold hardware — phones, tablets and laptops — and did not depend on the mass collection of consumer data as some Silicon Valley behemoths, such as Google and Facebook, do for their advertising-oriented businesses.

At a conference in October, Mr. Cook called privacy a “key value” at Apple and said, “We think that it will become increasingly important to more and more people over time as they realize that intimate parts of their lives are sort of in the open and being used for all sorts of things.”

For Apple, cooperating with the United States government now could quickly lead to murkier situations internationally.

In China, for example, Apple — like any other foreign company selling smartphones — hands over devices for import checks by Chinese regulators. Apple also maintains server computers in China, but Apple has previously said that Beijing cannot view the data and that the keys to the servers are not stored in China. In practice and according to Chinese law, Beijing typically has access to any data stored in China.

If Apple accedes to American law enforcement demands for opening the iPhone in the San Bernardino case and Beijing asks for a similar tool, it is unlikely Apple would be able to control China’s use of it. Yet if Apple were to refuse Beijing, it would potentially face a battery of penalties.

Analysts said Chinese officials were pushing for greater control over the encryption and security of computers and phones sold in the country, though Beijing last year backed off on some proposals that would have required foreign companies to provide encryption keys for devices sold in the country after facing pressure from foreign trade groups.


Timothy D. Cook, Apple’s chief, in 2014. Mr. Cook has received emails of support for refusing to decrypt an iPhone. Credit Jeff Chiu/Associated Press

“People tend to forget the global impact of this,” said Raman Jit Singh Chima, policy director at Access Now, a nonprofit that works for Internet freedoms. “The reality is the damage done when a democratic government does something like this is massive. It’s even more negative in places where there are fewer freedoms.”

Governments in Russia, Britain and Israel also have robust surveillance operations. Some governments have tried to use technology to gather intelligence on citizens at home and abroad.

Apple’s resistance to the United States government’s demand has been polarizing. Apple supporters have held protests in cities like San Francisco in recent days to show their support of the company and have used hashtags on social media like #freeapple and #beatthecase.

“We’re fighting to maintain even the assumption that companies should protect us,” said Evan Greer, the campaign director at Fight for the Future, a civil liberties group that is organizing protests nationwide on Tuesday to support Apple. “Apple is doing what every company should be doing.”

Others, including the Republican presidential candidate Donald J. Trump, have criticized Apple, and Mr. Trump has suggested boycotting its products.

Around the world, people are aware of the impasse but many say it does not affect their decision to buy iPhones and the company’s other products. In Rome on Friday, Simone Farelli, a 34-year-old history teacher who was browsing for a new iPhone at an Apple Store, said she “didn’t see why” the company’s standoff with the Federal Bureau of Investigation “would change my mind about buying a new phone.”

In China, the iPhone continues to hold a special place as a symbol of middle-class status.

Wen Shuyue, a 35-year-old consultant, who on Friday was waiting outside the Apple Store in Beijing’s upscale Sanlitun district, is one of Apple’s millions of Chinese users. He said he liked the iPhone because it was simply better than models made by Chinese companies such as Xiaomi and Huawei.

“I’ve never used Xiaomi or Huawei, because I think their designs are rough and not all that personal,” he said.

Apple’s shareholders have so far been quiet. In the past, investors who complained that some of Apple’s socially driven initiatives were superfluous to the company’s core business were quickly subdued. At a 2014 shareholders’ meeting, Mr. Cook told investors that if they wanted him to make decisions based only on the bottom line, “then you should get out of the stock.”

But data privacy may eventually motivate investors — and ultimately more customers — to vote with their wallets because “it’s an issue that speaks directly to the business,” said Michael Cusumano, a professor at the M.I.T. Sloan School of Management. “Right now people buy phones regardless of encryption issues, but we have to wait and see how bloody this fight gets.”

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Apple Watch Success Will Hinge on Apps

For the Apple Watch to be remotely as successful, Apple will have to find a way to take that world of apps to the wrist. But a watch presents unique challenges with its tiny screen. And the way app developers make money from it will be different than with other Apple products.

Unlike the iPhone or iPad, the Apple Watch is not a stand-alone product. It relies on an iPhone to fully operate, partly because the brains of watch apps will live on the iPhone. So users will have to install watch apps on the iPhone as well.

The economics of that combination are tricky. Developers working on watch apps have to make an iPhone app first and expand it to include support for the watch. And it remains unclear whether they can double-dip. Apple has not said whether developers can charge for the iPhone app, then charge again for the watch extension.

Slide Show

Key Moments From Apple’s Event

CreditJim Wilson/The New York Times

Still, companies are trying, even though some are worried the watch’s tiny screen can limit features or — even worse — ads.

Christian Gaiser, chief executive of Retale, said his company found a path to using a watch app to complement its smartphone app. Retale’s iPhone app displays weekly deals for retailers like Walmart and Target.

Retale users who see something they want to buy in the iPhone app can push the nearest location of the retailer to the watch app, which will map out turn-by-turn directions on the watch screen. Retale collects fees from retailers whenever customers engage with their ads, so the watch app is meant to increase usage of the smartphone app, Mr. Gaiser said.

At its event, Apple also demonstrated an app from Uber, the ride-sharing service, to summon a car. The watch app shows where the driver is on a map, and from there, the user can place a phone call to the driver.

Apple also showed an app developed by Starwood Hotels. Starwood’s iPhone app can be used to book a hotel room. The watch app sends a notification to the watch wearer when he or she is near the hotel. When the guest arrives at the hotel, the watch app shows the room number, and after that the watch can unlock the user’s room door just with a hand wave over the lock.


Guests of Apple’s media event tested out the new Apple Watch. Credit Jim Wilson/The New York Times

“The end goal is to build loyalty with our most valuable guests,” said Chris Holdren, who led development of the Starwood watch app. “It continues to deepen the relationship we have with them.”

Unlike past Apple products, the Apple Watch has a complex pricing structure. Because a smartwatch is both device and fashion accessory, Apple designed the watch to be highly customizable to suit the tastes of various users, from fitness buffs to collectors of luxury watches.

Apple will offer three models, each with a casing made of a different material: Watch Sport, a version with an aluminum case; Watch, which has a stainless steel case; and Watch Edition, which has a case made of 18-karat gold.

Each model comes in two case sizes — 1.5 inches and 1.65 inches. And for each watch, customers will be able to choose from a variety of interchangeable bands in different colors and materials.

The cheapest model is the Apple Watch Sport, the one tailored to athletes, which starts at $350. The larger Apple Watch Sport costs $400.

The next step up is the Apple Watch, with a more fashionable stainless steel case. The smaller version of this watch costs $550 to $1,040, and the larger one costs $600 to $1,100. The price range for both depends on the band.

The golden Apple Watch Edition is a sure sign that Apple has entered the luxury market. Pricing for this high-end version starts at $10,000.

Preorders start April 10, and the watches will go on sale on April 24. They will first be available in a select number of countries, including the United States, Australia, China and Japan.

At the event, Apple also stressed some of the signature features of the device.

The company has highlighted the crown as its latest signature innovation for controlling a device, similar to the mouse for the personal computer, the click wheel on the iPod and the touch screen for the iPhone. On the Apple Watch, the crown can be twisted to zoom in or out of the screen or to scroll through a web page.

You can take and even make phone calls, as long as your iPhone is nearby.

“I have been wanting to do this since I was 5 years old,” said Timothy D. Cook, Apple’s chief executive.


Journalists, bloggers, and Apple employees waiting for Apple CEO Timothy D. Cook to talk about the new Apple Watch. Credit Jim Wilson/The New York Times

The watch includes a heart rate sensor and a sensor for tracking movement to complement fitness applications. It has a chip that helps it make wireless payments.

The watch also includes Digital Touch, an application that enables a new method of communication between watch users. Watch wearers can scribble sketches on the watch screen and send them to one another, or even send their heartbeats.

Apple also added to the watch a so-called taptic engine, which taps users on the wrist with a tactile sensation when they receive alerts, messages or notifications. Apple said the watch’s battery would last 18 hours.

Apple also announced a new MacBook laptop with a 12-inch high-resolution “retina” display. It weighs two pounds and measures 13.1 millimeters at its thickest point. It also includes a new port called USB-C. It is a versatile port that can be used for charging, plugging in a video monitor, or hooking up a USB accessory like a keyboard.

The MacBook’s starting price is $1,300 and it begins shipping April 10.

Apple on Monday also released upgrades for some of its other notebooks, including the MacBook Air.

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