Apple ()
Apple’s (AAPL) annual Worldwide Developer Conference (WWDC) kicks off Monday in San Francisco. And unlike in years past, the week-long event — which runs from June 5 to 9 — could be even more crucial to Apple's core business, given that Apple shares, trading at all-time highs, just received a downgrade from Pacific Crest analyst Andy Hargreaves.
Apple shares have risen largely in anticipation of the company’s September hardware refresh cycle, particularly the highly-anticipated tenth anniversary iPhone. But Hargreaves told CNBC on Sunday that the surging stock is not pricing in possible iPhone 8 risks related to Apple’s supply chain.
At 10 a.m. Eastern on Monday, Apple CEO Tim Cook is expected to take the stage to deliver his keynote speech. Cook likely won’t address the iPhone 8 nor confirm that’s what it will be called. But by discussing other aspects of the business and key revenue drivers, Cook can assure investors that the Cupertino-based tech giant has not plans to disappoint them.
There’s a good chance Cook will unveil Apple's latest iPhone operating system iOS 11 in addition to new hardware and software or updates. The spotlight is also expected to be on artificial intelligence (AI), which has become a new battleground growth area where Alphabet (GOOGL) and Amazon (AMZN) are believed to be well ahead of Apple — particularly with voice-controlled home systems. All that that can change Monday.
Apple is rumored to be working on a Siri-based smart speaker to compete with Amazon's record-breaking Echo and Google's Home. Bloomberg reports that Apple’s smart speaker, which is being manufactured by Inventec, will feature better sound quality and "virtual surround.” What’s more, Apple is said to be integrating the smart speaker within its iOS and MacOS ecosystem too, allowing Siri to stream music, control HomeKit-linked smart home devices, and answer basic questions.
And similar to what Amazon and Google have done for their smart speakers, Apple also plans to allow third-party developers to create their own apps for the device. It’s anyone’s guess whether Apple will unveil or even confirm it is working on such a product. But in order for Apple to not fall further behind Amazon and Google, it needs to enter the space for cloud-based AI services. The WWDC would be an ideal time to do it.
Elsewhere, in addition to software updates for Apple Music that focuses on video, rumors suggest that Apple’s new iOS 11 might include a "dark mode," which would replace the white background for a black one at night. Some users believe that darker interface is easier on the eyes. Plus the darker background won’t require as much power to run, which would preserve the iPhone’s battery.
Apple Pay is also expected to receive an update — one that would allow peer-to-peer mobile payments and new augmented reality features. In terms of hardware, Apple could also refresh the company's line of MacBooks and iPads. The 12.9" iPad Pro is approaching two years old and has yet to be refreshed or redesigned. Meanwhile, the smaller 9.7" iPad Pro is now over a year old. New iMacs and Mac Minis could also be unveiled. I don’t expect Apple to say anything about the new iPhones or Apple Watches until its September event.
Suffice to say, there will be plenty to talk about this week. From an investment perspective, Apple shares have shown a tendency to sell off on the days of the WWDC as the market often takes a “sell the news” approach. Investors who are waiting for a better entry point in AAPL stock should monitor the shares closely heading into the close Monday. To watch the WWDC, you can use Apple's live stream link starting at 1:00 p.m. Eastern on Monday.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
