Why consumers will eat up Apple's new products

Apple hosted its annual spring event to unveil new products. Yahoo Finance’s Dan Howley shares the details.

Video transcript

MYLES UDLAND: Yesterday afternoon, before we got the excitement of Netflix's latest quarterly report, we had Apple's latest presentation on some new products, some new software updates. Dan Howley joins us now for the latest on all of this. Howley, I want to start with something that really caught my eye, I think the new Macs look beautiful. I think they're great. I'm not sure-- it's been an interesting driver for the business because people are at home, setting up at home offices and at home schooling, but let's start with the Macs, and then we can get into some of the other things Apple announced.

DAN HOWLEY: Yeah, the new iMacs, they're the first iMacs that are purpose built for Apple's M1 chip. That's why they have that new unique design, the thinner body there. Apple basically said that they wouldn't be able to do that with an Intel chip, without so much saying Intel by name, but they also pointed out how much more powerful this is than Intel based systems. They compare it to the 21.5 inch version, and they say that it's leagues faster as far as CPU performance, overall performance, as well as GPU performance, and they say it's even faster than the AMD Radeon Vega, that's a discrete graphics card that they have in the 21.5 inch version.

So it really is a better looking and more powerful system. I think one of the cooler things that they have on there is this magnetic power adapter. It plugs into the back, and then part of the power adapter is your ethernet cable, so basically, you would plug it into the little box that sits on the floor, and then this way, it keeps fewer wires up by your computer. So a little touch there.

But then obviously, the big star of the show is the new iPads, the iPad Pros. Basically, those are now competing directly with the MacBook Air, to a degree. They have the exact same processor, according to Apple, the M1 chip, they're going to be able to do much of the same, performance wise, when it comes to iOS or iPadOS apps. The only thing they won't be able to do is Mac OS specific apps.

But Apple is kind of coming to a convergence with those two platforms, with both being able to run those iOS apps, or apps out of the app store. So it will be interesting to see what the future goes here, but much more powerful performance.

Design, essentially unchanged. The 12.9 inch has a sick new screen with 10,000 micro LEDs. That's basically what you would get out of a mid-range to high end TV, as far as the technology goes, because they have something called local dimming. There's 2,500 dimming zones in there, and what that means is the LEDs will be able to dim separately rather than as a single sheet, and that will ensure less light bleed, a better contrast between lights and darks, and overall better vibrancy.

So those are really, really fantastic upgrades, and then obviously, you have the Air Tags. This is something that we've been expecting for some time from Apple. The issue, though, is, they're also going to be part of an antitrust discussion, just because there's a company named Tile that makes something similar, and they say that Apple has unfairly hit them with extra rules in iOS. Essentially, whenever it needs to ping your location, or if it frequently needs to ping your location, it's going to ask you, so they say that that's unfair because these Air Tags don't need to do that. So it'll be less customer friendly to have that kind of functionality.

And look, they've already complained to the EU, they've made mention to members of Congress on this. So it's going to be an issue, but $29 to help you find your lost bag or lost keys, you can't beat that.

JULIE HYMAN: I've actually had a Tile before this new thing even existed. It's a cool product, makes sense. So we'll see how Tile does in that legal battle, and actually the market competition. Speaking of market competition, Dan, I do want to ask you about a hearing that's happening today that's looking at competition in the market when it comes to the App Store, and how Apple handles and polices the App Store. I believe that Alphabet's Google is also involved in this. So explain to us today, how significant is this hearing?

DAN HOWLEY: I think it's going to be relatively significant. Mostly because it's not going to be one of the dog and pony shows that we usually see when CEOs are there. That's not what we're going to get today. We saw Tim Cook, Sundar Pichai, we had Jeff Bezos, Mark Zuckerberg, but really it was Tim Cook and Sundar who are relevant to this conversation, as far as the app stores go.

And I think that what we're going to get is more discussion on whether or not the fees that are charged by Apple and Google are fair, whether or not they put app companies or app developers under the gun, as far as providing revenue to Apple and Google. Remember, right now it's a 30% cut for any sale through the app store, for Apple's side, over a million dollars of revenue a year.

So if you're a company making less than a million in revenue, you pay Apple 15%. If you make more than a million in revenue, you pay Apple 30%. And basically, in Apple's telling, the vast majority are going to be paying 15% because they don't make more than a million dollars a year.

So it'll be interesting to see, but we have people from Match group, we have people from Spotify, we have people from obviously Tile, they're all going to be there, testifying. So I think as far as antitrust goes, and big tech, for Google, it's all over the place, right? Their hands are in so many different pots that you can have antitrust conversations about multiple issues. But for Apple, it really is about the App Store, and I think that would be the one area where they could be hit.

Microsoft is supposed to be revamping its Microsoft app store, its Windows 10 app store, where they may do away with fees entirely for third party, so we'll have to see how that goes. But if they do, then there's precedent for a big tech company to be doing that, and that could hurt Apple and Google in the long run.

MYLES UDLAND: Howley, it's always funny, we show this big tech screen, and a name that's on there that gets to skate by all this is Microsoft. Some news from Microsoft yesterday on what they're not going to be doing, which is, at this time, acquiring Discord, which is-- I'd be interested in how you describe it. I would describe it as sort of a slacker video games. I'm not sure that entirely encapsulates what the platform is all about. But I guess take us through the decision to not buy Discord, but also this little acquisitive spree that Satya Nadella has been on, and I think being a lot more strategic and frankly, more aggressive in building up the Microsoft infrastructure through acquisitions, obviously LinkedIn and GitHub, we've seen those, but maybe there's something bigger on the horizon for them.

DAN HOWLEY: Yeah. The Discord conversation was really interesting, just because look, $10 billion is a huge company, and it's video game related, they recently closed a $7 billion plus acquisition of ZeniMax Media. They're the makers of Bethesda Games, as well as Id, so you're looking at Doom, Skyrim, Elder Scrolls franchises, Fallout, so huge games there.

But I think for Discord, it could have been more than just gaming, though that could have also alienated the core audience. They have 140 million people on Discord right now. It's largely free. They make money through selling nitro passes, which basically provide a little bit better standard of service as far as the capabilities go. And you get better avatars. So it's not really something that I would personally buy, but there are some people out there who do.

But I think Discord is really kind of part of the wave of these audio apps, obviously Fun House-- Clubhouse, rather-- it's kind of a fun house too-- but Clubhouse is one of them. And I think that for Microsoft to miss out on Discord probably stings, but I don't think it's the kind of acquisition that obviously would have made or broke them, because there is that issue of whether or not they would have alienated the original user base of gamers.

And look, if you start integrating teams or work stuff into that, it's just going to lose its luster, and gamers are a very fickle group. They'll dump something just because of a perceived slight, and that'll be that. So I think unless it was just going to be specifically for games, it would have been great. But look, Microsoft has tried to make acquisitions in the gaming space that aren't necessarily game companies. They've picked up a company and then renamed Mixer, which was going to be their answer to Twitch, but it never really took off.

And now where Mixer was, it just redirects you to Facebook's gaming platform. So I think it may have been a smart move, but as far as the acquisitions sprees that they've been on, look, they're a company that, like you said, they're avoiding this regulatory scrutiny that the other companies have been because they went through this before. That doesn't necessarily mean that they can avoid it entirely in the future, they are one of the richest companies in the world as far as market value goes. And they're one of the most important. So I do think that they need to tread a little lightly, but I don't think any other tech company is in the space either.

MYLES UDLAND: Well, reports that Discord is now going to explore potential public listing of some sort, whether it's a direct listing or an IPO, so maybe Microsoft can take another crack at them at some point in the future there. And Howley, we'll save the Clubhouse LinkedIn synergies conversation for another time there, maybe for the Microsoft brand. All right, Dan Howley with everything going on in the tech world.