NEW YORK (TheStreet) -- Apple (AAPL) hosts its Worldwide Developer Conference next week, and while the event has delivered bombshells in the past it's largely gone as expected in recent years. That may be about to change, though, especially as it relates to software and services.
"Apple's closed ecosystem has always been valuable but in the coming years the potential contribution of earnings and revenue growth from the service side will surprise on the upside," said Channing Smith, Capital Advisors managing director. "The developers conference will take a giant step in this direction." Capital Advisors is long Apple shares.
This year's WWDC, held in the Moscone Center West in San Francisco, as it is most every year, largely will focus on updates to the next version of iOS, as well as Mac OS X. The look of Apple's iOS was drastically redesigned when iOS 7 was released, so this year Apple is likely to continue improve upon the look and functionality of the operating system. Piper Jaffray analyst Gene Munster said the system could include an updated version of Apple Maps with transit directions and the ability to split screen apps.
Apple is live streaming the keynote of its developer conference on Monday, June 8, which starts at 1 p.m. EDT. TheStreet will be in attendance and will live blog the event.
Here's what to expect from WWDC.
iOS 9/OS X
"We expect the main event at WWDC will be the preview of iOS 9 and hints it may give around the iPhone 6S," Munster wrote in a note. "Recent reports suggest that the new iOS could include split screen iOS apps, mass transit directions in Maps, and an app for connected home devices."
It's expected that iOS 9 as well as the new version of Mac OS X will be shown in beta to developers. It will then be releasedto the public in the early fall, ahead of product launches, including a new iPhone, as it has been in previous years.
Following Google's (GOOGL) developer conference last month, in which it announced several cloud-based offerings including Google Now on Tap, an updated photos app and the much-revered Google Photos app, there are expectations Apple will do the same at its developers conference. "We wouldn't be surprised if Apple announced advancements in Cloud Services at WWDC," Jefferies analyst Sundeep Bajikar wrote in a May 31 research note. Jefferies rates Apple shares hold with a $135 price target.
Last year, Apple unveiled a completely new developer language, Swift, much to the delight of developers around the world. Swift, a programming language for both iOS and OS X, is supposed to make it easier for developers to create apps by making the coding language simpler and easier to use, compared to Objective-C, the current form of programming language.
Scott Jenkins, a developer at a Fortune 100 company, hopes the company will continue to make Swift easier to use. "Swift is still rough around the edges," Jenkins said via email. "I have a few things I been working on in Swift and there is marked improvement over the last year. [I'm] hoping that WWDC brings the facelift that I've been looking for the clean up some of those kinks."
Last year, Apple introduced Handoff, a feature for Max OS X, to much fanfare. Handoff lets you start an activity on one device and continue working on it on another. It also unveiled Instant Hotspot, which makes using your iPhone's hotspot as easy as connecting to a Wi-Fi network. You can even make iPhone calls on your Mac using Yosemite. Jackdaw Research chief analyst Jan Dawson expects more about that feature this year, "possibly incorporating some of what they did with the Watch in this regard."
It's clear that Apple is helping drive the push toward consuming content everywhere and anywhere, according to data from Adobe Digital Index, which looked at 2.8 billion TV everywhere accounts and more than 200 billion online plays to compile data.
"The use of TV everywhere (where you use cable account to login) is growing mainly because of Apple," Adobe Digital Index principal analyst Tamara Gaffney said in an interview. "When consumers get access to content this way, they don't give it up. They consume more and more." Gaffney noted that more Apple TVs were sold this holiday season, with the set-top box doubling in market share to 10% from 5% year over year by the end of the first quarter of 2015.
The new version of Apple TV is expected to be Apple's Trojan horse to win the living room, noted J.P. Morgan analyst Rod Hall. "We believe the Apple TV is likely to see a software update that will make it a HomeKit hub," Hall wrote in a note. "As a result we expect further partner announcements at WWDC and potentially some expanded HomeKit functionality in updated iOS/Watch/OSX SDKs."
Cupertino, Calif.-based Apple may unveil an updated version of its Apple TV set-top box, amid grander plans for disrupting the television market.
"We're likely to see new Apple TV hardware, partly just to refresh the box but partly also to support some new services and functionality," Jackdaw Research's Dawson said via email. "The new hardware will likely have a new remote to support the TV service, and also will be able to act as a hub within the home for HomeKit home automation devices. It's quite likely that we'll also finally see Apple open up the Apple TV software to third party developers beyond the few hand-picked partners it has today."
It is expected that Apple will introduce a dedicated app store for Apple TV along with bringing Siri to the set-top box, similar to what Amazon (AMZN) has with its Amazon Fire TV.
An updated version of Apple TV would help developers, as 62% of all video plays are occurring on an Apple device, Gaffney noted. "It's easier to build there first."
Despite the hype surrounding the new set-top box, Apple may not show it off on Monday. The New York Times first reported the product was not ready to be unveiled, leading to a change in Apple's plans.
The company is also long thought to offer its own slimmed-down streaming service, offering about 30 channels for roughly $40 a month, which Dawson said is likely to be announced at the conference but which may not launch right away."It's likely to be a sort of pay TV bundle, like Sling TV or Sony Vue, with lots of key partners already signed up but perhaps some local broadcasters not yet in the mix."
Re/Code recently reported the subscription service will not be announced at WWDC next week.
Apple is also expected to introduce its own streaming music service next week, in an effort to compete with Spotify and others, while boosting revenue for iTunes.
In May 2014, Apple purchased headphone maker and streaming service company Beats for $3 billion, which is widely believed to be a major part of the revamp of Apple's music streaming service. The service, which does not have an official name yet, is likely to cost $10 per month service to help offset declining revenue at iTunes, Apple's music download platform. Revenue from services that includes iTunes, the App Store and iBooks, was $4.9 billion in the quarter ended March 30.
Apple currently offers a customized radio service -- iTunes Radio -- which was intended to help offset the slowdown in music downloads, but it has struggled to gain traction. Pandora (P) is the leader, holding 27% of the market as of February, while iHeartRadio (IHRT), Spotify and iTunes Radio each hold 7% of the market, according to eMarketer.
It's not a definite that WWDC will offer anything for Apple's third mobile operating system, Watch OS, which helps run the Apple Watch.
But given it's a software-centric forum, it stands to reason Apple will have a thing or two to say about its latest product and the software that runs it, developer Jenkins stated, citing the reason that a lot of developers want to do more with the Watch than they're able to currently.
Though Cantor Fitzgerald analyst Brian White noted "weaker-than-expected volumes" after meeting with companies in Apple's supply chain, there is still plenty of hype surrounding the product, with Apple Senior Vice President of Operations Jeff Williams recently making public comments that Apple has sold "a lot" of Apple Watches.
There's been plenty of complaining, both from developers and Watch wearers, that the apps are constrained since they run on the iPhone as opposed to the Watch and don't offer the same type of performance that iPhone apps do, Dawson noted. "This should help spark quite a few new apps for the Watch, and make the performance of existing apps better."