Apple doesn't need new hardware — it's going to make you buy everything it sells

Apple made the vast majority of its ever-growing multibillion-dollar hoard selling us hardware: iPads, Macs, Macbooks, Apple TVs, Apple Watches, speakers, headphones, docks, cables, and above all else that ultimate cash cow, the iPhone. 

So it may seem a little strange that the company's keynote at its WorldWide Developer Conference in San Jose Monday featured not one single hardware upgrade. No new entry-level iPhone, no iMac or Mac Pro, no iPad Pro with Face ID, not the long-rumored replacement for the Macbook Air. Just a string of incremental software improvements: Mac OSX Mojave, iOS 12, TV OS, Watch OS 5. 

SEE ALSO: Everything you need to know about Apple's iOS 12

And yet, counterintuitively, this was still a hardware keynote. Why? Because Tim Cook and his troupe of excited executives basically gave us a two-hour ad for how great life is when you're entirely inside the Apple ecosystem. Every software upgrade seemed designed to prove that the sum of all Apple products is greater than their whole. 

The pitch: If you only own an iPhone and you're not using our Mac/TV/Watch, you're missing out! Buy all our stuff and you'll be living your best digital life. Play in our walled garden and we'll keep you safe from the data-grabbing, attention-hogging Facebooks of the world. 

SEE ALSO: Apple just threw some serious shade at Facebook

The prime example of this is the new interoperability of Mac OS and iOS. Apple VP Craig Federighi went to great pains to say the two systems weren't merging — a giant "no" appeared on the screen behind him to answer that question. 

Well, of course the two won't ever merge — just as when two people get married, they retain their individual identities. They operate different devices, after all. MacOS is from Mars, iOS is from Venus. 

But they do appear to be dating rather seriously.  Apple News, Stocks, Voice Memos, and Books (formerly iBooks) apps will all run on an iOS shell inside the new MacOS. If that doesn't count as moving in together, I don't know what does. 

SEE ALSO: Apple launches macOS Mojave with Dark Mode, support for some iOS apps

And they're just the first tentative examples; it's not ridiculous to think you might be able to switch any app from your iPad to your Mac inside a year or two. If you own both devices, that is.  

If you think Apple's goal with the News app is to dominate the media landscape, then this move is tepid in the extreme: If they're aiming for sheer number of readers, shouldn't they produce an Android version of the app?

But if you see Apple News as an ad for the Apple software ecosystem as a whole — a place where you can open the same app and have it remember what you've read no matter what device you're on — then it is functioning exactly as intended. 

Similarly, Apple made Photos a lot smarter — so that you could, say, take a screenshot on your iPhone and drop it straight into your presentation on your Mac. If you own an iPhone and you're thinking about a new laptop, consider yourself the target audience here.

The hard upsell 

This strategy makes total financial sense when you're a company as large as Apple and you want to keep growing your profits (as the company is required by law to do for its shareholders). The company is facing the maturing of its smartphone market. Some 700 million people already use iPhones. 

Make a new iPhone, and the buyers will likely be drawn from a percentage of the 700 million looking to upgrade. Sure, you'll get a nice chunk of change, and it's not like Apple is going to stop giving us new iPhones. But that is not the only way to milk your market of true believers.

What if you could sell each of those 700 million iPhone owners — people who are already inside the ecosystem, and love it — on an Apple TV 4K, or the latest generation Apple Watch? Now we're talking easy profit margins. 

Everyone who's ever walked into an Apple Store intending to buy a small accessory and walked out with a shiny new device, their wallet hundreds of dollars lighter, knows this feeling. It's called upselling, and no one does it better than Apple — in store or in keynote. 

Indeed, even Federighi's insistence that iOS 12 will work better than iOS 11 on old iPhones could be seen as part of this strategy. If Apple treats you with respect through its core product, you're more likely to look at its offerings in other areas of your electronic existence. 

For years I've ridiculed the company for devoting so much time in each keynote to a product with a relatively small user base, the Apple Watch. It's the one thing made by the company that I don't currently own (my inventory: iPhone, iPad Pro, iMac, Macbook). I was quite happy with my Fitbit and didn't really need the Watch's bells and whistles.

But my wife does own one — and on Monday, Apple showed me two killer features in Watch OS 5 that might work for us. I could see us having fun with the new exercise competition, and saving a ton of time on phoning each other by just using the Walkie Talkie app, and well, I guess I'm buying an Apple Watch now. 

The company is also pretty good at getting other corporate giants on board with this sales effort. For example, a little noted feature of the Apple TV 4K presentation was "single sign-on": that device will now log on automatically to all TV content apps if you get your internet and cable service bundled from the same company. "It just works," enthused an Apple executive. Yeah, that should just work for AT&T and Comcast, who may use this feature to sell more bundles. 

The one piece of the Apple pie not on display? The HomePod, an overpriced and exceedingly dumb "smart" speaker that adds nothing to the ecosystem as a whole, and may even have devalued it by being mentioned. Every family needs its red-headed stepchild, I guess. 

Bottom line: Apple doesn't need fresh products to help its bottom line. That doesn't mean they're not coming; we're likely to see new iPhones and iPads, if not laptops and desktops, this fall, closer to holiday buying season. But if you don't think Apple is selling its hardware harder than ever, try walking into a store and seeing what happens. 

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