Apple's WWDC is today and it's likely to be one of the most closely-watched Apple events in years.
This year's conference will take place in an all-virtual format, a change the company announced weeks ago in response to the COVID-19 pandemic. Apple shares were up 0.6% to $351.70 in pre-market trading on Monday and are up 19% this year.
Unlike past years, this year's virtual WWDC is also free to join. Tickets for past WWDC events have topped $1500, if you could get one; many developers also traveled long distances to attend the event in prior years.
"As a free online event, the barriers to joining the Apple developer community have never been lower. I'd challenge Apple to take it one step further and reduce or even eliminate the $98.99 per year subscription cost for the Apple Developer Program," wrote Loup Ventures' Gene Munster, a longtime Apple bull. "All of this is an investment in making the Apple ecosystem better. A more diverse offering of software and solutions is a better offering."
This year, investors and analysts will be especially keyed in to Apple's software and services-related announcements, given the critical role both will play during a challenging period for iPhone sales.
Macs, Without Intel
Apple is expected to introduce a new MacOS that includes a number of enhancements, such as a built-in language translator and improvements to heavily-used apps like iMessage and Siri. Investors will also be watching for clues about Apple's reported plans to move away from Intel (INTC) - Get Free Report and towards its own Arm-based processors. Apple is close to making the switch, Bloomberg reported recently, but the exact timing is unknown. Apple could announce the new in-house chips at WWDC -- and once implemented, they could allow the company to more closely control the timing of new computers. Apple told investors in April that it expects Mac sales to tick up in the current quarter.
The iPhone is still Apple's largest source of revenue, but Apple bulls view the company's growing services business as the key to realizing its full valuation potential and capitalizing on its installed base. Apple's services growth, which is expected to accelerate as more consumers stay at home and engage with apps, also helps to offset the impact of lower iPhone demand. Apple is likely to spotlight any updates to its services slate, which now includes Apple TV+, Apple News+, Apple Arcade and Apple Card. Beta code for a forthcoming iOS update suggests that a services bundle may be coming soon. If a services bundle is indeed on the way, as has been long rumored, it may be introduced at WWDC on in an iOS update in the coming weeks.
Munster expects iOS 14 updates to be relatively "modest" this year, but to build upon an already world-class operating system. Updates could include an updated fitness app and the ability to recall iMessages. WatchOS 7, meanwhile, could present a whole new set of features on the popular smartwatch, such as a sleeping app and a blood-oxygen estimator. Apple cautioned last quarter that Apple Watch sales are likely to fall this quarter, with more people using computers than activity-centric devices like smartwatches. But analysts expect the Apple Watch, which already dominates the smartwatch market, to be adopted by many more iPhone users over time.
In its software previews, Apple often drops hints about products coming down the pike. Its iOS 14 announcement will help set the stage for the 5G iPhone, one of Apple's most heavily anticipated iPhone upgrades in years. The company will also show off under-the-hood enhancements to its core operating systems that could point to long-rumored projects, such as a possible augmented reality headset.