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Apple's Hard-Driving Software Splurge

Apple's Hard-Driving Software Splurge

Apple's decision to forego the unveiling of a new iPhone model and instead focus entirely on software for its WWDC keynote presentation may have been a little risky. But what the company did show in San Francisco Monday, especially iCloud, has been greeted with enthusiasm. The cross-device connections the new service makes possible could be a boon for Apple's sales across the board.

By Richard Adhikari MacNewsWorld ECT News Network
06/08/11 5:00 AM PT

Monday's announcements at Apple's World Wide Developer Conference (WWDC) in San Francisco cheered up Wall Street analysts.

"We believe these innovations are laying the foundation for the next round of share gains in mobile phones, tablets and computers, especially with 4G connectivity going mainstream next year," Barclays Capital analysts Ben Reitzes and Jennifer Thorwart wrote in a note to investors shortly after the announcement.

Others, including RBC Capital Markets' Mike Abramsky, Piper Jaffray's Gene Munster and Ticonderoga Securities' Brian White, expressed the belief that the announcements would give Apple yet another boost.

However, Brian Marshall, an analyst at Gleacher, sounded a warning, pointing out in a note to investors Tuesday that while iCloud increases the stickiness of Apple's ecosystem, the condition of company CEO Steve Jobs appears to be worsening.

While he lauded iCloud, like the other analysts, and said Apple remains the best technology company on the planet, Marshall kept his price target for Apple shares unchanged at US$450.

Another person with concerns about Jobs' health is JMP Securities' Alex Gauna, who has fears about Apple's ability to execute without a healthy CEO. He didn't set a target price for AAPL stocks.

Apple stocks closed Tuesday at $332.04, down 1.77 percent. Granted, an early morning general rally by Wall Street fizzled out, partly on concerns about what United States Federal Reserve chairman Ben Bernanke would say in his statements about the economic outlook at a banking conference in Atlanta, Ga.

However, Apple has generally outpaced the overall market, and seeing its share prices fall so steeply, particularly after announcing a dazzling array of new technologies that are widely seen as laying the groundwork for its future, is a tad unsettling.

The company did not respond to requests for comment by press time.

Floating on the iCloud

iCloud, a set of free cloud services that work seamlessly with applications on users' iDevices, Macs and PCs, was announced Monday.

It lets uses automatically and wirelessly store content in the cloud, which will push it to all their devices with no effort on the part of the user.

Contacts, Calendar and Mail, the three major components of the now-defunct MobileMe service, have been re-architected and rewritten to work seamlessly with iCloud.

iCloud downloads purchased iOS apps and books to up to 10 of a user's devices at no extra cost. It automatically and securely backs up iOS devices daily over WiFi when users charge the iDevices.

That backed-up content includes purchased music, apps, books, photos and videos, device settings and device data. This makes firing up a new iDevice easy -- users just have to enter their Apple ID and password during setup and iCloud will do the rest.

All documents created on a user's iDevices are automatically stored in the iCloud, which pushes any changes in these documents out to all the user's devices.

Users get up to 5 GB of free storage for their mail, documents and backup. This is exclusive of the storage for music, apps and books purchased from Apple, and their photos and videos. Users can buy more storage. Details will be announced when iCloud ships in the fall together with iOS 5.

iCloud is free on iDevices running iOS 5 or Macs running Mac OS X Lion, which will be out in July.

That could lead to more iDevice and Mac sales, analysts speculate.

Hi Ho, iOS 5, Away

On Monday, Apple also previewed iOS 5.

The beta release of this OS has more than 200 new features that will be available to iDevice users when the OS hits the market in the fall.

These features include Notification Center, which centralizes notifications; iMessage, a new messaging service that works between iDevices; and Newsstand, with automatic updating of content.

iOS 5 includes built-in Twitter integration and single sign-on capability so users won't have to log in into every app they use. It has a new Reminder app that can set time- or location-based reminder alerts.

The Camera and Photos apps also have new features, and the new Photos app will let users edit and organize their photos on their iDevice.

iOS 5 will also have Game Center and an AirPlay Mirroring feature. The latter wirelessly displays everything users do on their iPad 2s on their HDTV through Apple TV.

Simba Stalks the Mac

Mac OS X Lion, which was also previewed at WWDC, will have more than 250 new features and 3,000 new developer APIs (application programming interfaces).

It will be available in July as a download from the Mac App Store and will be priced at $30.

Features include multi-touch support; full-screen app support; Mission Control, which lets users see everything running on their Mac; Launchpad, a new home for users' apps; and a redesigned Mail app.

Mac OS X Lion also includes a Resume feature which brings users back to the place they left their apps before quitting it or shutting down their Macs; AutoSave, which automatically records the history of documents while users work on them; and AirDrop, which finds nearby Macs and automatically sets up a peer-to-peer wireless connection for fast and easy file transfer.

Reaction to the WWDC Announcements

The ability iCloud has to sync a user's content on all the user's devices is the next step toward providing more convenient service on mobile devices, Harry Wang, a research director at Parks Associates, told MacNewsWorld.

"Your different mobile devices -- tablets, MP3 players and smartphones -- play different content," Wang pointed out. "Having one central location, the cloud, to which everyone can connect and get different contents from on any one device, is a natural evolution."

Further, iCloud currently puts Apple ahead of the competition -- Google and Amazon, Wang said.

These two giants are wrestling with the problem of autosyncing on "a broad array of systems and devices" with differing protocols, which cannot be matched up with easily, Wang remarked.

However, over time, Amazon and Google will catch up, Wang said.

The announcements put Apple back in the lead because it has thought through the post-PC connected experience, Carl Howe, a research director at the Yankee Group, opined.

"Apple has opened up its ability to market to literally billions of consumers worldwide who can't afford to own two devices but can afford to buy one," Howe told MacNewsWorld. "Prior to this, buying into an iPhone or iPad had a hidden cost -- you had to own a computer too."

And, while serving customers better, Apple has a chance to further line its pockets. The mobile application market is going to erupt, In-Stat predicts.

The research firm expects mobile app downloads to approach the 48 billion mark in 2015. That will be largely due to the prevalence of touchscreens in handsets, although increased on-board memory capacity will help, Amy Cravens, a senior analyst at In-Stat, stated.


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