Apple Inc. wasn't the first company to make a smartphone or a tablet computer. But its iPhone and iPad redefined those products, helping to make Apple the most valuable company in the world.
Now, Apple is betting that it again can succeed where others have struggled, by changing the way consumers pay for purchases, how they think about a computing device on their wrists and how much they're willing to pay for a phone.
Apple Chief Executive Tim Cook on Tuesday introduced a new payments system for mobile devices, a series of sleekly designed smartwatches and a pair of larger iPhones.
The blitz of new offerings—incorporating hardware, software and services—aims to resolve questions about Apple's ability to innovate under Mr. Cook, and highlights its willingness to tackle the thorniest problems facing technology companies, and their users.
"This is one of the most important days in Apple's history," said Mr. Cook in an interview with The Wall Street Journal. "Innovation is alive and well at Apple. You can scream it from the rooftops."
Each of the three initiatives faces challenges. Existing mobile-payment systems have failed to convince consumers that they are superior to swiping a credit card. Smartwatches and fitness bands have yet to sell in big numbers. And with its new top-of-the-line phone, Apple is asking consumers to pay more at a time when smartphone prices are plunging.
The new offerings "are pretty strong demonstrations of Apple's unique credibility to make products that resonate with consumers," said Bernstein Research analyst Toni Sacconaghi. He added, speaking of the new Apple Watch, "The question is how mass market can this be."
Here's a look at three bets:
Apple's move into mobile payments seems to legitimize overnight a nascent industry.
The new digital-payments service, Apple Pay, will let users buy merchandise simply by waving a newer iPhone or Apple Watch in front of a reader. Apple said it hopes to speed up the checkout process and, ultimately, to replace physical wallets.
The service uses a technology known as near-field communication, or NFC, that works by transmitting a radio signal between the device and a receiver, when the two are fractions of an inch apart or touching.
Previous efforts at mobile payments, from Google Inc., eBay Inc. and a host of startups, have foundered because few merchants participated. Payments using NFC technology will nearly double this year to $8.2 billion, but still make up just 2.5% of total mobile payments, according to market researcher Gartner.
Apple is attempting to solve that problem by lining up big payment networks like American Express Co., MasterCard Inc. and Visa Inc., as well as big-name retailers and restaurants like McDonald's Corp., Walgreen Co. and Macy's Inc.
"This should be a very natural extension of smartphone technology," said Gil Lauria, a Wedbush Securities analyst. "Imagine walking through Macy's and getting an offer for 15% off sent right to your phone and then being able to apply that just by flashing your phone at the register."
