Apple has this week introduced a new version of its all-important operating system iOS, alongside other minor improvements in the Apple eco-system. It has rattled no cages, introduced few radical innovations, and does not come with new hardware, as yet.
The two OS upgrades (iOS 7 and OS X Mavericks), the expected iTunes Radio, and new hardware – MacBook Air and Mac Pro models plus AirPort – were the highlights of the first day of the Apple WWDC developer conference. Both operating systems were made flatter, with a very different look and feel, especially for iOS 7, whose icons have been redesigned to be simpler and clearer. Other new features for the mobile platform include Control Center, AirDrop and major updates to Notification Center, Multitasking, Siri, Camera, Photos and Safari. Control Center provides a slide-up tray with quick access to AirPort, Bluetooth, music, AirPlay and a flashlight.
Both the smartphone giants, Apple and Samsuing, are seeing intense pressure on their share price, amid gloomy predictions about their flagship devices. Apple has been suffering from investor doubts about continuing iPhone growth for months, and it is not clear that its launch of the next release of the iOS operating system will reverse the trend. In fact it’s fairly clear that on its own, it won’t.
Meanwhile, in the past couple of weeks Samsung too has lost its gloss with analysts. Morgan Stanley cut its earnings estimates for the Korean giant this year by 1.6%, as it lowered sales forecasts for the Galaxy S4 flagship.
Analyst Shawn Kim reduced Galaxy S4 sales predictions to 61m from 71m for 2013, following in the footsteps of JPMorgan Chase, which cut its profit estimate last week, also citing slowing demand for the S4. Samsung says it sold 10m S4 units within a month of the device’s release, and shipped 69.4m smartphones in the first quarter, before releasing the S4. In Q113, its market share was 33.1%, up from 28.9% a year earlier, while Apple’s had slid to 17.9% from 22.8%.
Apple lacks Samsung’s ability to roll out new devices quickly if one product flags – the low end S4, the rumored 12-inch Galaxy Note, and so on. However, it is expected to release a midrange iPhone this fall – though perhaps not a radically redesigned high end smartphone, which many believe to be essential to its turnaround. At its annual WWDC developer conference this week, its only new hardware was on the Mac side, but it did produce a major refresh of iOS, with release 7, described by CEO Tim Cook (and many commentators) as the biggest upgrade since the original version.
Nevertheless, most of Wall Street remained unconvinced that iOS 7 and other new products like iTunes Radio and the latest Mac OS X would turn the tide for Apple’s stock. JPMorgan’s Mark Moskowitz wrote in a client note: “We do not expect investors to cheer the latest software and services roll-outs at Apple’s WWDC 2013. The tech improvements appear to be suitably impressive, but we do not expect them to move the needle in the model in the near to mid-term. The new specs reinforce, however, Apple’s enhanced user experience, in our view, but the bigger story remains whether or not Apple can jumpstart its revenue growth profile.”
That particular story must perhaps be laid at the door of its next iPhone or its much anticipated iTV launch (see separate item).
There was also an updated version of the Safari browser, featuring a new homescreen with top sites and a ‘reading list’ tool, which lets users scroll from the end of articles to the next stories.
The most hotly anticipated new offering was iTunes Radio, which was heralded when Apple signed a deal with Sony Music Entertainment at the weekend – the final major music publisher yet to make an agreement for streamed music on iOS.