Analyst: WWDC Announcements Should’ve Included Hardware

| Apple Stock Watch

Apple's two hour keynote event to kick off its annual Worldwide Developer Conference Monday morning was filled with details about OS X Yosemite, iOS 8, and developer tools, but it didn't include any new hardware announcements, and Wells Fargo analyst Maynard Um says that was a disappointment.

No WWDC hardware announcement disappoints Wells Fargo's Maynard UmNo WWDC hardware announcement disappoints Wells Fargo's Maynard Um

In a note to investors, Mr. Um said,

Relative to the expectations going into WWDC, the event, to us, was a slight disappointment given the lack of any new hardware announcements and a cursory address of the home automation capabilities (there was much more media attention relative to the short portion of presentation dedicated to this). The most important announcement, in our opinion, was Apple's HealthKit/health app.

HealthKit is the new platform Apple unveiled that lets health and fitness tracking and monitoring devices aggregate the data the collect into Apple's new Health app. The app will give users a single place to view all of the information their various tracking devices collect, and can transmit information to their doctors for review. Both Nike and the Mayo Clinic are supporting HealthKit, and other companies will no doubt follow suit.

The lack of hardware announcements shouldn't have been a surprise to Mr. Um considering Apple rarely uses WWDC to unveil big device updates or new products. Instead, Apple usually focuses on major operating system updates, just as it did today.

Mr. Um wasn't overly impressed with Apple's new HomeKit platform that uses a single app to control supported smart devices from several third-party companies. The advantage of HomeKit is that it uses a single app to control devices like smart lightbulbs and outlets, and can trigger actions, such as opening a garage door, based on a user's proximity.

"While we applaud the open ecosystem approach, we believe there are still some limitations to widespread adoption given the high cost of products (Hue bulbs: $59.97/each; Nest Thermostat: $249/each), which we believe doesn't do much to drive incremental developed market penetration today," Mr. Um said.

Despite his disappointment, Mr. Um did see some things in the keynote that he liked. Tighter integration between iOS and OS X, for example were winners, as was the improved Spotlight search feature and the introduction of iCloud Drive and it's lower storage prices. iCloud users will get 5GB of storage for fee, while 20GB will cost US$0.99 a month, and 200GB will cost $3.99 a month.

HealthKit's ability to log and process information from multiple health and fitness monitoring devices was big for him, too, although that excitement came in part from his feeling that Apple plans to monetize the health information it collects from users -- a notion that seems to go against Apple's policy of avoiding collecting user information.

"While details were lacking, the opt-in feature [in HealthKit] to allow apps access to data is, in our opinion, a critical element that could help side step privacy issues and potentially allow Apple to monetize the information," he said.

Considering Apple's aversion to collecting user data, and the backlash the company would likely see from selling that information, it doesn't seem likely the company would choose to go down that path. Apple has had plenty of opportunity to gather and sell user information as a revenue stream and so far hasn't, which makes the possibility it would decide to do so now in such a controversial way very unlikely.

Apple will launch iOS 8 and OS X Yosemite this fall. The company still hasn't announced any new hardware this year, although there have been hints from executives that product announcements are on the way.

Mr. Um is maintaining his target price range of $388 to $645 and "Market Perform" rating for Apple's stock. Apple closed on Monday at $628.65, down 4.35 (0.69%). The company's stock is at $628.39, down 0.26 (0.04%) in after hours trading. 

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Comments

Lee Dronick

Settle down Maynard, I would bet that in a month or so Apple will announce new Macs be they iMacs, portables, or Minis.

Intruder

“I like what Apple announced and am really pleased with what they are doing.” Said no analyst ever.

mouring

Lack of hardware updates didn’t bother me.  They only have done that at WWDC a few times, and normally on big product revamps (e.g. iPhone 4). 

What is a bit depression not to see is anything about AppleTV and how that ecosystem is going to advance (or not) this year.

Lee Dronick

Tomorrow the investors will be “punishing” Apple for not announcing an iWatch and the iGlass.

jdb8167

It is all about swift. Nothing gets developers more excited than a viable new language. They don’t happen very often.

KitsuneStudios

Had they released a new iMac today, I probably would have bought it.

Instead, I’ll just have to be very, very happy about improved Mac/Phone integration, widgets, extensibility, Metal, Swift, and the OS X design elements. (Also very happy that the 4s is still supported)

jameskatt

The World Wide Developer Conference is for DEVELOPERS. 

And this conference was the most earthshaking developer conference EVER from Apple since the introduction of the App Store.

For DEVELOPERS, the most important announcement is SWIFT, Apple’s new industrial-strength but completely easy to learn new language which is the future of OS X and iOS development.

Nearly every Developer and even children who will grow up to be developers will learn this new language.

More than any hardware announcement, Swift will guarantee that more and more developers will move into Apple’s ecosystem and create fantastic, world-class software.

Software is the heart of the Mac and iOS devices. Apple showed groundbreaking disruptive software products for DEVELOPERS.

MacFrogger

Jameskatt:  Spot on!  DEVELOPER is even in the title of the conference, in case the so-called “analysts” ever want to do any real analysis…

Maynard Uhhh…er…Um is so consistently wrong anyway - like most “analysts” - that the only mystery to me is why anyone would ever listen to any of them.  With a few exceptions, of course, like Horace Dediu, Ben Bajarin,

aardman

Seems that one day after the keynote, Wall Street is happy about no hardware announcements.  Who woulda thunk?

Lee Dronick

Aardman that is interesting.

MacFrogger

aardman:  Yes, the stock price is up today.  But is that due to demand from individual investors, institutional investors, or ??

I haven’t seen any anal-lists upgrade the stock, say what a great presentation Apple made at WWDC (c.f. intruder’s comment above), etc.

So at least for me, “Wall Street” usually means anal-lists, brokerage firms, etc.  IOW, the stock is rising despite their disappointment that no hardware was introduced at WWDC.

ctopher

So Steve Ballmer was right after all? “Developers, Developers, Developers, Developers!”

Lee Dronick

  So Steve Ballmer was right after all? “Developers, Developers, Developers,
Developers!”

Yes but these days he is chanting “Clippers, Clippers, Clippers!” smile

davebarnes

It is all because “analysts” do not understand software.
Hardware is easy to grasp: lighter, shiny, curvy, etc.
Software, if you are not a developer, is very difficult to comprehend.

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