WWDC Live Blog: Key Takeaways For Apple Investors
The day has come. At 10 a.m. PST, on June 22, Apple will kick off the first-ever online version of WWDC, the company's developer conference.
The Apple Maven channel will follow CEO Tim Cook's keynote address in real time. The focus of this coverage is to present and discuss what matters most from an Apple investor perspective. Let's start by doing a quick preview of what's to come – or scroll straight down to the "Live Coverage Starts Here!" section.
Previewing WWDC's key announcements
WWDC 2020 is certainly an attention-grabbing event for developers and enthusiasts. But what's in it for investors? The answer is more subtle.
The operating system updates could be the most important announcements of the day for shareholders, even if it may be hard (impossible?) to quantify the benefit of each new feature. As a reminder, the App Store facilitated over half a trillion dollars in billings and sales last year, and produced what I estimate to be one-third of Apple service revenues. Keeping the ecosystem alive and well is crucial for the business.
Otherwise, the possible announcement of a shift to ARM-based architecture on the Mac side could be an important landmark that leads to more control of the supply chain and, possibly, better margins in the future. Lastly, any developments regarding the bundling of service offerings could be impactful to the investment thesis – although I don't believe that this is the ideal event for such business updates.
Other "shiny objects"
Other key announcements of the day will probably make the headlines, but they may be less meaningful to investors. Among these "other shiny objects", I highlight the following:
- New iMac: the desktop computer could get an overdue face lift. The current 27-inch version is still slow to ship from Apple's website, suggesting a potential pullback in inventory levels ahead of the product refresh. Consensus suggests that the version to see the most noticeable changes will be the 21.5-inch model, whose screen size could increase to 23 inches in an iPad-like bezel design.
- Over-ear headphones: the device could be called StudioPods, a complement to Apple's thriving wearables and home business. The Cupertino company is already a force to be reckoned with in wireless, in-ear devices. It remains to be seen whether Apple will add to the Beats lineup and compete more heavily with the likes of Bose, Sony and LG.
Live coverage starts here!
8:56 a.m. PST: Welcome! We are less than one hour away from the start of the event.
8:57 a.m. PST: For what it's worth, Apple shares are currently trading up +1.9% on an otherwise quiet day in the equities market.
9:07 a.m. PST: By the way, I will be following the event live on YouTube. Use this link to access the broadcast.
9:09 a.m. PST: I have a poll on Twitter: "Apple's WWDC is here! What potential announcement are you most excited about?". Cast your vote here.
9:24 a.m. PST: Let's take a quick look at what non-finance Apple channels have been saying about today's event.
9:25 a.m. PST: 9to5Mac: "There is the possibility of new hardware in the form of a redesigned iMac, but last-minute rumors suggest we’ll have to wait until later this summer instead."
9:27 a.m. PST: Cnet: "The biggest change may not be about the look of Apple's Macs or a new feature for the iPhone. Apple is expected to announce that the chips powering its Mac computers will change, shifting from chips made by Intel to new Arm-based ones similar to those built for the iPhone."
9:29 a.m. PST: Engadget: "The company is gearing up to introduce a handful of substantial software updates and will reportedly chart a new, ARM-powered path for its Macs, all while facing heightened scrutiny from lawmakers and developers alike. In other words, we might be looking at the most impactful WWDC Apple has held in years."
9:38 a.m. PST: MacRumors: "Last-minute rumors have indicated that hardware announcements are unlikely this year."
9:45 a.m. PST: we are 15 minutes away from the start!
9:48 a.m. PST: here's a word from CEO Tim Cook...
10:00 a.m. PST: WWDC has started! Again, watch it on YouTube.
10:05 a.m. PST: CEO Tim Cook starts addressing "the topics of the day": COVID-19 crisis and racial inequality.
10:08 a.m. PST: to start, the iOS 14 is announced, as expected.
10:10 a.m. PST: the App Library helps with app organization on the iPhone home screen. The new function should increase usage of most popular apps. Overall good for Apple, as it could help with monetization of best apps.
10:13 a.m. PST: Picture-in-Picture looks very interesting. This is a big deal for device usage and attention retention. Once again, I believe this bodes well for Apple.
10:15 a.m. PST: updates to Siri. Apple's battle for making its voice assistant more competitive continues. The company seems to be pushing for ease of device use, e.g. Siri for voice messages.
10:18 a.m. PST: the updates in Messages also lean towards ease of use, including pining messages, collapsing conversations, etc.
10:22 a.m. PST: by the way, no sign of investor enthusiasm so far. Apple stock is up +2.2% for the day, a bit better than early in the morning. But the increase seems in line with broad market movements.
10:24 a.m. PST: the key takeaway to me so far is that Apple is going for simplification, ease of use and integration among functionalities (e.g. picture-in-picture and Siri for voice messages). It's all about keeping users engaged and focused on what matters most to them.
10:27 a.m. PST: digital car keys is an interesting feature. This is the Tesla approach being rolled out to other vehicles. Once again, it's all about user engagement with and dependence on the iPhone.
10:30 a.m. PST: App Clips helps to integrate the "real world" and the smartphone. Also a great opportunity for Apple Pay.
10:33 a.m. PST: that's a wrap for iOS 14! Interesting updates. To re-emphasize, "Apple is going for simplification, ease of use and integration among functionalities (e.g. picture-in-picture and Siri for voice messages). It's all about keeping users engaged and focused on what matters most to them."
10:34 a.m. PST: iPad OS is next. Over 1 million iPad-specific apps available. Impressive.
10:38 a.m. PST: compact notification for incoming calls. Yet again, Apple is going for uninterrupted multi-tasking, which should lead to more engaged usage.
10:41 a.m. PST: so far, iPad OS updates seem a bit less impactful to me than the refresh to the iOS. As a reminder, iPad revenues accounted for only about 7% of Apple's total revenues last quarter. The trend has been slightly declining in the past few years.
10:44 a.m. PST: AirPods will connect back and forth to different devices automatically. Neat feature! This function could help to bring together the device ecosystem. This is a big theme for Apple.
10:46 a.m. PST: AirPod Pro also gets some feature upgrades. Very interesting from a technology perspective, less meaningful to investors.
10:47 a.m. PST: Watch OS 7 is next!
10:49 a.m. PST: Face Sharing allows users to sync a new watch face from the App Store and other sources to the Apple Watch. See the theme here again? It's all about connecting the ecosystem together.
10:51 a.m. PST: Activity app is getting an upgrade, and will now be called Fitness. Fitness tracking is an important feature of the wearable device.
10:52 a.m. PST: sleep tracker is announced, which is something that I had been expecting. This is a very interesting announcement, in my view. It may appeal to certain potential customers and increase demand for the device.
10:56 a.m. PST: that could be a wrap for operating system updates.
11:00 a.m. PST: another quick check on Apple stock price today: still hovering around +2.0%. Share are at an all-time high.
11:02 a.m. PST: let's talk about home. Not expecting anything groundbreaking here, we'll find out.
11:04 a.m. PST: cool features in smart home. At first glance, nothing that investors should care too much about.
11:06 a.m. PST: Apple TV makes tweaks to help with the gaming experience. Apple Arcade has not been a very exciting new product, but it's worth keeping an eye on it.
11:07 a.m. PST: the company discloses that Apple TV+ has reached 1 billion screens. Interesting bit of information. The service has not been a big hit with streaming video users.
11:10 a.m. PST: Mac OS Big Sur is announced. ARM-based architecture could be discussed.
11:15 a.m. PST: single view for widgets and notifications on the home page. Again, ease of use and ability to multi-task better, keeping users more engaged.
11:20 a.m. PST: Mac Catalyst is a developer-specific topic that makes it easier to create Mac apps from iPad apps. It underscores the importance of the App Store, which I estimate to account for one-third of Apple's service revenues.
11:22 a.m. PST: quick reminder, Mac accounted for nearly 10% of Apple's total revenues last quarter. Once upon a time in 2000, Macs represented nearly 90% of sales. The trend has been flat lately, which is consistent with (if not a bit better than) the overall desktop and laptop industry.
11:24 a.m. PST: another quick check, Apple stock continues to cruise along. Very low volatility day for it and the overall market.
11:27 a.m. PST: "historic day" for the Mac. Here we go.
11:28 a.m. PST: Mac will be on Apple's own silicon. As expected.
11:30 a.m. PST: Apple justifies the move on performance and energy efficiency. Once again, it makes sense. The Mac will be following in the footsteps of the iPhone, iPad and Apple Watch.
11:36 a.m. PST: it is still unclear to me whether the new architecture will be a positive or negative for developers. I would think, however, that this was an important consideration before Apple pushed forward with the changes.
11:38 a.m. PST: Apple stock got a small bump in the past 10 minutes, while the S&P 500 did not move much. It is believed that ARM will allow the Cupertino company to increase margins over time.
11:41 a.m. PST: Rosetta 2 will allow for smoother transition between old Intel and new Apple silicon architectures.
11:47 a.m. PST: back to Tim Cook. Is this a wrap, or the announcement of a new iMac?
11:48 a.m. PST: new device on Apple silicon expected for late 2020. Apparently, nothing new on hardware today.
11:50 a.m. PST: as I sign off, Apple shares continue to trade up +2.4%. Investors seem pleased with what they saw. Enjoy the rest of your Monday, and thanks for checking in with the Apple Maven today!