), in its ongoing annual Worldwide Developers Conference (WWDC)
announced a bunch of new applications for its upcoming iOS 6
operating system. The thing that stood out was its homegrown
The company also previewed its new Macintosh operating system,
Mountain Lion, and announced a number of updates for the MacBook
Over the years, Apple has used the WWDC platform to launch new
services, hardware products and software such as iCloud, iPhone 4,
3GS, 3 and operating system iOS 4. Last year, Apple previewed an
upgraded iOS 5, and released a beta version to iOS Developer
Program members in the same conference. However, in 2011 Apple
broke away from its tradition of unveiling a new iPhone at the
This year, Apple again refrained from providing any details of
the upcoming iPhone, amid growing speculation of a late 2012
release. The company also did not provide any update on its highly
anticipated Apple Television, much to the dismay of investors and
An iOS Focused WWDC
Lately, Apple has been focusing on enhancing the features of its
mobile operating system iOS, in order to boost its weakening market
) Android operating system. According to Gartner, Android was the
#1 platform in the first quarter, with 47.0% market share, whereas
iOS had 23.0% market share and was placed at #2.
Apple announced approximately 200 new features for the upcoming
iOS 6 (scheduled to release in fall this year), including a new
mapping service. The internally developed mapping and navigation
software will come pre-loaded on both iPhone and iPad replacing
The new mapping software is based on 3D technology. The
application has a Flyover function which provides 3D images of
cities, along with a turn-by-turn navigation system and real-time
updating of traffic data. Moreover, the application is capable of
offering alternative routes depending on traffic conditions.
The new service reflects the growing animosity between Apple and
Google. Although Google remains the most-favored search engine for
iPhone and iPad, Apple's move reflects the company's policy of
reducing dependence on Google. The new mapping service is
definitely going to hurt Google as the company used to generate
approximately half of its mobile map traffic from Apple's mobile
Other iOS features include an updated Siri (Apple's voice
command application launched with iPhone 4S) which will now be able
to launch applications. The database has also been expanded, and
now includes a number of languages, including Cantonese and
Mandarin, a clear indication of Apple's growing focus on China.
Siri is also available with the new mapping service.
Along with these, Apple launched a new application called
"PassBook" which helps users to store boarding passes, ticket
information and other important documents. The company also
announced a tighter integration with
), which now allows Siri users to post photos carrying voice
commands. The company also launched lots of new software that helps
users block messages and text notifications by choice, set
reminders and other features.
Apple announced a new lighter MacBook Pro, which is only 0.71
inches thick and weighs 4.46 lbs. The new MacBook features retina
display, well popularized by iPhone and the "new iPad." MacBook Pro
comes with a 15.4 inch screen with a pixel density of 2880 X 1800,
2.3 Ghz processor, 8 GB RAM and is priced at $2,199.
Apple announced an updated faster MacBook Air which features a
2.0 Ghz i7, a third generation Ivy Bridge processor and up to 8GB
of memory. Apple also updated the existing MacBook Pro lines.
Apple previewed the Macintosh operating system Mountain Lion,
which supports iCloud. The new operating system allows voice
commands and the dictation facility is also available. Mountain
Lion costs $19.99 and will be available from next month through the
Mac App Store.
We believe that the lack of new surprises (much expected from
Apple events) and absence of new iPhone and iTV details has left
very little to cheer about at the WWDC. Except the mapping
software, we believe there is not much in the headlines to move the
stock upward in the near term.
Moreover, this reflects iPhone's key position in Apple's
portfolio in our view. We don't expect much detail from Apple in
the remaining three days of the conference (concluding on June 15
). However, we believe that consumers can defer their purchases
based on rumors surrounding the fall release of iPhone, which may
hurt Apple's top-line growth in the upcoming third and fourth
That said, we believe that Apple's innovative product portfolio,
loyal customer base, huge cash balance and international expansion
opportunities remain positives for the stock. At the same time, we
expect Apple to continue to face significant competition from
handset makers such as Samsung and HTC on the hardware side and
Google's Android on the software side.
We have an Outperform rating on Apple over the long term.
Currently, Apple has a Zacks #2 Rank, which implies a Buy rating
over the next 1-3 months.
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