For Apple CEO Tim Cook, iPhone, Smartwatch Launch Is Biggest Test

After three years of closely guarding his strategy for Apple Inc., AAPL -0.62% Chief Executive Tim Cook will show his hand Tuesday, with an ambitious blitz of new products and services that aim to resolve questions about the company's ability to innovate. Apple is expected to unveil two new iPhones with larger screens, its first wearable device—a smartwatch—accompanied by new services around healthcare, home automation and digital payments. It's the type of new-product wave that Apple fans have been waiting for since Mr. Cook succeeded Steve Jobs in August 2011.

"It seems really clear that Apple intends to make a big splash," said Forrester principal analyst James McQuivey. 

Apple is trying to prove that it can still deliver the type of groundbreaking products that vaulted it from the brink of bankruptcy to become the world's most valuable company by market capitalization. It established itself as a leading innovator by redefining the mobile phone in 2007 with the iPhone, and the tablet computer in 2010 with the iPad.

More recently, Apple's technological ambition has seemed to pale, compared with rivals like Google Inc., GOOGLE +0.64% Facebook Inc. FB +0.82% and Amazon.com Inc. Google is tinkering with driverless cars, aerial drones and a network of connected home devices through Nest, started by ex-Apple employees. Facebook is buying virtual reality headset maker Oculus and paying $19 billion for messaging service WhatsApp. Amazon is making set-top boxes and phones, and recently bought Twitch, a popular network for watching videogames.

By revealing new hardware products together with service offerings, Apple is trying to show how it can create experiences that can't easily be replicated by competitors, to keep users loyal at a time when Google's Android mobile-operating system runs about 85% of smartphones. Google, Facebook and Amazon all are essentially software companies that are trying to find their stride in hardware. Amazon Monday cut the price of its two-month-old Fire phone to 99 cents, a signal it hasn't been selling well. Apple's most prominent hardware rival in terms of sales and market share, Samsung Electronics Co., is weaker on software and services.