Apple’s WWDC Ups and Downs: Expectations Met But Future Shaky
Apple (NASDAQ:AAPL) had a lot to show off during its keynote speech Monday, but it was software, software, and more software. Hopeful expectations were anticipating an uncharacteristically early premiere for major devices like the iPhone 6 or iWatch, but more reasonable expectations were instead met. Though some are satisfied with what the updates mean for Apple moving forward, others are worried there’s more to contend with coming up.
In an analyst note received by Wall St. Cheat Sheet from Piper Jaffray’s Gene Munster — a long time Apple analyst — all systems were go for Apple in the latter half of the year.
Munster noted that the iPhone maker wasn’t exceeding expectations Monday, as that would have entailed presenting the iPhone 6, iWatch, or iTV, which is definitely not in Apple’s style. However, that wasn’t a problem in Munster’s eyes. Apple’s operating system improvements, enhancements, and integration, as well as the step up in the health tracking field offer potential for the future devices. All of the operating system upgrades can lay the foundation for new smartphones, tablets, and personal computers. Rhe HealthKit system may be a sign for an upcoming iWatch.
The note said: “While investors and consumers are focused on devices in the back half of the year, we believe that yesterdays [sic] event delivered on strengthening the platform, which in turn will help drive device sales.” It also noted people’s “hyper interest in devices” as a reason why the keynote could only meet expectations. Twitter backed up the firm’s beliefs, as sentiment about Apple at the end of the presentation stayed in-line with sentiment up to that point.
Piper Jaffray’s expectations are for Apple to move into a strong second half of the calendar year, delivering “its strongest product line-up in recent memory.” The firm has set it as Overweight with a price target of $732.
Not everything is so certain
In a separate report received by Wall St. Cheat Sheet, Wells Fargo analyst Maynard Um, another highly regarded Apple analyst, saw the good things Apple had presented Monday in the same light as Munster, but he also perceived more downside risk. Apple’s positive signs weren’t enough to outweigh the negative ones. The analysis was also somewhat disappointed with the lack of hardware introductions and the limited presentation of the HomeKit app, which is a new area of growth for Apple.
The firm saw the HealthKit and HomeKit apps as the key new apps, with special important seen in HealthKit. HealthKit presents an opportunity “to side step privacy issues and potentially allow Apple to monetize the information” gathered by the app. However, the HomeKit app may not have as much potential at present, as Um considered the “limitations to widespread adoption given the high cost of products” within the home-automation category.
Though there were positive takeaways from the keynote, they may not outweigh the key downside risks, which Um lists as “operator subsidy reductions, mis-step in product cycle, legal disputes, and greater-than-expected gross margin pressures,” which led the firm to give Apple a valuation range between $595 and $640.
There’s plenty more to consider when look at Apple’s futures, and more could still be revealed as the Worldwide Developers Conference continues this week, but it seems unlikely that anything will be announced bigger than what was presented Monday.
If you’re interested in the upgrades and new services that Apple presented during the keynote speech, you can check out our earlier article on those items.
Apple CEO Tim Cook took the stage at San Francisco’s Moscone West on Monday to open up the company’s weeklong Worldwide Developers Conference with a keynote address that was live-streamed. Cook noted several historic milestones that have been reached on the 25th anniversary of the WWDC. According to Cook, more than 1,000 engineers from 69 countries attended this year’s event, and two-thirds of the attendees were there for the first time.
Cook also highlighted the success of Mavericks and the Mac product line. According to him, Mac sales went up 12 percent in an industry that declined 5 percent. Meanwhile, Mavericks has been adopted by 51 percent of Mac users — the fastest adoption of any PC operating system in history.
The CEO also took a moment to take a dig at rival Microsoft by pointing out that only 14 percent of Windows users had installed Windows 8, even though Windows 8 had shipped a full year before Mavericks. Finally, Cook turned the stage over to Craig Federighi, Apple’s senior vice president of software engineering.
OS X 10.10 Yosemite
Federighi confirmed that the new OS X 10.10 would be named Yosemite and noted that the design was focused on “clarity and unity.” As predicted by a number of industry watchers, many of the changes found in OS X Yosemite centered on bringing the appearance of the operating system closer to the minimalist design of iOS. Design changes included a “dark mode” for the menu bar that makes it less distracting, transparent windows, cleaner typography, and iOS-like desktop icons.
The Notification Center was also redesigned with a new Today View, where widgets exported from apps can be dragged in. Federighi further demonstrated new Spotlight enhancements that can be used to search for docs or apps on your computer, as well as information on the Internet.
Mail was enhanced with several new features. A new MailDrop feature allows users to send attachments up to 5GB in size to other Macs via iCloud. Other email clients can also access the file via a link. A MarkUp feature was added, which allows users to doodle on emails or images. MarkUp will also recognize shapes that users are trying to draw and make them better.
The Safari browser gained a Tab View that allows users to more easily scroll through their tabs, no matter how many are open. Users can also access a “bird’s eye” view of all their open tabs.
However, Yosemite gained more than just a superficial iOS makeover. Federighi demonstrated a number of new Continuity features that greatly increase the seamlessness between Apple’s iOS devices and Macs. Air Drop now works between iOS and Macs, and users have the ability to pick up the same work across devices. For example, Federighi showed how a half-composed message on an iPhone could be finished on a Mac without any steps taken by the user, thanks to the two devices’ “proximity awareness.”
The Continuity features also include the ability to handle phone calls and SMS messages from the Mac. Much to the delight of the WWDC audience, Federighi showed off this OS X feature with a quick phone call to Beats co-founder Dr. Dre. Although Yosemite won’t be publicly available until the fall, Apple made a developer preview available on Monday, and the software will also be made available to the public through Apple’s beta program this summer. Following the precedent that was set with Mavericks, Apple will also be offering Yosemite update for free.
Cook briefly returned to the stage to introduce iOS 8. Cook said that more than 800 million iOS devices have now been sold: 100 million iPod touch devices, 200 million iPads, and 500 million iPhones. As many industry watchers had predicted, iOS 8 expanded the design ethos established by iOS 7 without any implementing any major changes in its appearance. However, the new mobile operating system offered several new operational features for both the iPhone and iPad, including interactive notifications, a new intelligent keyboard enhancement called QuickType, and support for iCloud Drive.
Interactive notifications allow users to respond to messages without leaving an app, while QuickType offers “predictive typing suggestions” based on frequently used words or phrases that the program gleans from a user’s SMS messages and emails. However, QuickType goes further than most other intelligent typing systems by offering customized suggestions based on a user’s individual communication style with different people. In case this program seemed intrusive to some users, Apple emphasized that the data acquired is only stored locally in order to protect users’ privacy.
While iCloud Drive allows users to more conveniently access their documents across devices, a new Family Sharing program allows up to six family members on one credit card to share purchased content. The program includes a feature that prompts adults to approve any purchases that a child tries to make. Apple also introduced several editing enhancements to photos and noted that pictures will soon be able to be shared across devices.
HealthKit and Health App
Confirming the many rumors about a health-related announcement, Apple unveiled HealthKit, a health data storage platform that Apple developed with the cooperation of the Mayo Clinic. HealthKit will store any data related to health, exercise, and diet that is collected by the Health app. Partners such as the Mayo Clinic and third party health-related apps will be able to use the data to provide personalized feedback on a user’s overall fitness. A Mayo Clinic doctor cited by Apple said that, “HealthKit will revolutionize how the health industry interacts with people.”
It should be noted that Samsung recently announced its own health data platform called SAMI, the Samsung Architecture Multimodal Interactions, as well as a prototype wrist-worn health-tracking device called Simband at an event last week, reports VentureBeat. It is unclear if Apple’s Health app will eventually work with a similar wearable tech peripheral, such as the long-rumored iWatch.
Apple introduced several enhancements to the voice activated personal assistant Siri, including the ability to purchase iTunes content and the addition of dozens of new dictation languages. Users can also now access Shazam song recognition by simply saying, “Hey, Siri.”
Developer enhancements: HomeKit and more
After introducing the consumer-end improvements, Apple unveiled the many enhancements that have been added for developers. This included new extensibility features that allow apps from the App Store to project user interface features and services into other apps, including Safari. The ability to use Apple’s Touch ID was also opened up for third-party app developers for the first time, although fingerprint data will still be protected and stored in a secure enclave on the iPhone 5S.
In another widely predicted move, Apple unveiled HomeKit, a software platform that will allow developers to more easily create iOS apps for home automation products such as light dimmers, thermostats, and door locks. Apple also revealed CloudKit, a “free with limits” toolkit for developing cloud apps, and Metal, a new tool that gives game developers better access to the power and graphics potential of Apple’s A7 chip. Finally, Apple introduced Swift, a new programming language that is faster, more efficient, and less prone to errors than Objective-C.
Cook reemerged to close the keynote address with a short speech that focused on Apple’s unique ability to provide its users with a seamless experience across products. He also thanked all the Apple employees before he exited stage left. Although WWDC 2014 appeared to fulfill many industry watchers’ expectations, the market appeared to respond with a shrug.
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