In case you missed it, Apple’s still got it. The “It” is a certain je ne sais quoi. While putting on a great show to a very sympathetic audience, the company redefined the smartphone conversation without really introducing any new revolutionary products. Long time Apple watcher and co-head of tech blog Re/Code, Walt Mossberg summed up yesterday’s developers conference fairly succinctly (emphasis mine):
the overwhelming theme at WWDC was that your digital life can be better if your phone, tablet and laptop all have the familiar Apple logo. Unlike in the past, it wasn’t just about a better laptop operating system, or a better phone-and-tablet platform. It was all about the advantages you get if you use Apple hardware, software and services for everything.
In some ways, throughout the 2 hour streaming event it almost felt incomplete without the much rumor/anticipated larger screen iPhone (4.7 inch) and Phablets (5.5 inch), but remember this event is held to get app developers geeked-up (pun intended) to create software/apps for the new iPhone and Mac operating systems. If that was their goal, and by reading the reviews of the presentations of the new Mac OS Yosemite and iPhone iOS8, then they were a massive success. Apple Fanboys have been all over the Twittersphere, Blogosphere (yes they are 2 different digital places) and traditional media singing the praises of Apple for finally leveling the playing field with Android.
As it relates to Apple’s competition, yesterday’s presentation signaled what seems to be a much tougher stance with Android, and possibly a newfound focus on halting their growing market share gap with iOS by giving developers, who’ve gravitated to a more open environment with Android, an unprecedented level of freedom.
If Tim Cook had one job in yesterday’s keynote it seemed to be to deliver a shot across the bow of Android. The shot is that Apple’s mobile growth is now at Android’s expense. Cook stated:
Over 130 million customers who bought an iOS device in the past 12 months were buying their first Apple device……..Many of these customers were switchers from Android………Nearly half of our customers in China in the past six months switch from Android to iPhone”
One feature that stuck out to me was their focus on “Continuity.” The idea is to allow users to multi-task between devices. The demos made it look easy, but for any of you who have frustratingly wrestled with iCloud (formally MobileMe), the proof will be in the pudding. The ability to make phone calls from your Mac or iPad with your iPhone across the room is also pretty cool. I was surprised that, given the well placed rumors of a platform for connected home, and the months of health monitoring chatter, both seemed to be an afterthought (more to come for sure).
The most exciting take-away for me was their focus on iMessage and the company’s combining of many popular features from popular messaging and photo/video apps like WhatsApp, Vine and Snapchat. I have made this argument before (MorningWord 2/21/14: WhatsApple Gonna Do?) that Apple has some fairly under-appreciated proprietary apps that could be at the vanguard of halting Android’s market share advance. An obvious first step is to match the competition with capability (which it appears they are doing) and then to go cross platform and compete head to head with WhatsApp (soon to be Facebook) on Android turf, as I suspect the new and improved iMessage could make WhatsApp and afterthought on iOS.
So the big winners here are developers with more access to develop for Apple ecosystem and Apple users as the new iOS seems to be a far bigger jump than that of iOS7. And the company itself, as represented by the confidence on the stage, seems to be getting a little swagger back. Samsung’s “Next Big Thing” in the Galaxy S5 made a bit of a thud when it dropped early this year, and Cook’s statement of how few Android phones are running on current software suggests that many of their customers are making accidental choices.
And lastly, the big loser in my opinion is Facebook’s $19 billion price tag for WhatsApp. If Apple’s upgrade of iMessage is successful (and I think it will be wildly popular causing many iOS users to drop WhatsApp) and they break with history and license to Android as a trojan horse app, we will be seeing a $5 – $10 billion write-down by Facebook of this purchase in the next couple years.
As for Apple stock, it has been a monster. If it weren’t for the impending 7 for 1 stock split scheduled for this coming Monday, I am hard pressed to think we would not have had a more significant “sell the news” reaction to a fairly incremental software update, without any new major product introductions.