A big factor in every Apple announcement is how investors react and how share prices fluctuate based on its new products. As a result, Wall Street’s financial analysts are quite clued-up on what sort of moves the Cupertino-based giant could make at any given event.
With WWDC 2013, Apple is expected to follow the same format as last year – which means plenty of emphasis on its Mac operating system, OSX, and its mobile software: iOS 7.
Specifics of what we’ll see on these fronts remains a big unknown, what with Apple being so secretive and all, but there are a few rumours going round which analysts can work with.
Of course the big thing many are talking about is iOS 7’s apparent re-design at the hands of Apple’s Jony Ive, who’s said to have introduced a ‘flatter’ aesthetic. It’s hoped this will go further than just plain visuals though as there is plenty of missing functionality on iOS compared to rival platforms.
Ben Reitzes at Barclays says the most significant thing to watch at WWDC will be the new software and services Apple is previewing and ‘whether these initiatives start to change the ‘narrative’ for Apple’.
Reitzes describes expected reveals to include: ‘a new look for iOS, the facilitation of mobile payments through Passbook, new subscription services through iTunes and further integration efforts with developers to fuel adoption of Siri and iCloud.’ He also mentions the rumoured ‘iRadio’ to ‘defend iTunes against the emergence of new music models.’ So Spotify, then.
‘This event is key in terms of showing that the ecosystem remains strong over the long term and warrants premium priced Apple products, while attracting more users through new user cases,’ Reitzes summarises.
Amit Daryanni of RBC says: 'the new iOS will have flatter icons and will move away from skeumorphism (digital interfaces that replicate the physical look). In addition, we expect enhancements to maps, iCloud and Siri.'
He describes iRadio as ‘one of the more exciting launches at WWDC,’ saying that it would ‘enable the company to leverage its 'iAD' product to offer free (and premium) streaming radio service.’
‘A successful streaming service would bring back the stickiness that AAPL's ecosystem has lost given the launch of multiple third-party streaming music services,’ adds Daryanni.
Katy Huberty of Morgan Stanley throws the often sceptical conclusions of many analysts into a glaring light, saying: ‘Apple's 500MM account base grows faster, interacts with and spends more than other platforms, and yet is valued at a discount,’ adding: ‘New services and products are key to unlocking value, in our view, with WWDC the next opportunity to showcase innovation.’
Huberty points to mobile payments as one possibility: ‘Hypothetically, Apple could leverage existing credit card accounts registered with iTunes and the App Store, but allow users to purchase products and services outside of Apple's own properties with ease.’
Then there’s the much-rumoured music services, according to Huberty Apple has every reason to go big in this space: ‘Apple could also launch a music streaming application to complement its existing iTunes ecosystem... We estimate Apple could generate $1B of annual revenue through a streaming music product.’ Holy dollar, dollar bills Batman.
Huberty’s last point is what she calls ‘Ad exchange’: ‘Apple could leverage its iAd product to differentiate its platform for developers and users by creating an ad exchange. Developers could potentially charge higher rates than ad impressions on other devices.’
Chris Whitmore of Deutsche Bank highlights a number of key points to watch at the event, including iOS 7’s interface overhaul and tweaks to Siri, iCloud and Maps. On the subject of post-WWDC, Whitmore stresses that the ‘impact of a lower end iPhone’ will be pivotal.
Peter Misek of Jeffries says the ‘main focus’ will be iOS 7 and its flat UI reboot.
‘We also expect Apple to introduce the long-awaited ‘iRadio’ streaming music service,’ he adds. Misek also believes the rumoured ‘iWallet’ payment services could be a ‘surprise at the event’.
Matthew Hoffman of Cowan said there ‘is little doubt’ of an iOS 7 announcement and that ‘Software remains Apple's primary point of differentiation, so the launch should help to rebuild growth as the OS spurs upgrades of older hardware and captures the attention of new users.’
‘We expect iOS 7.0 will run well on iPhone 4S hardware, less well on devices with older processors,’ he added.
Rather conservatively, Hoffman closed by saying: ‘Services (iCloud, iRadio, PassBook with NFC, etc.) remain a key source of potential revenue growth, but we await the WWDC details before getting more enthusiastic.’
Very sensible.
WWDC 2013 kicks off in earnest from 6pm tonight UK time and we'll be covering it as it happens.
by pbriden via Featured Articles
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