Ken Ray’s WWDC-palooza Wrap Up

Mac OS KenI will be honest cats and bigger cats, my head has been swimming for most of the week. So much stuff announced from the WWDC keynote, then so much more in its wake.

Apple, on Monday, showed off three big things: Mac OS X Lion, iOS 5 and iCloud, as well as a bunch of little things inside those three big things.

OS X Lion: Now More Touchy-feely
Lion, we are told, will have over 250 new features, of which Apple Senior VP of worldwide product marketing Phil Schiller was proud to show ten, including Multi-Touch gestures, Mission Control, Launchpad, an improved Mail client, full-screen applications, Resumé, Auto Save, Versions, and AirDrop.

May I tell you the most surprising part though? Well… relatively surprising?

Lion will be available in July as an upgrade from Snow Leopard for US$29.99-cents, and if you think you’ll lie to the guy at the Apple Store and tell him or her it’s an upgrade when really it’s not, best of luck. Lion — as had been supposed by a number of sources — will be Mac App Store only.

That was the tenth thing featured in the Schiller show on Monday: The Mac App Store, making that bit a little like a snake head eating the head on the opposite side.

Also available will be Mac OS X Lion Server, though it will not — as had been suggested — be built into Lion. It’ll run buyers a separate $49.99, and it too will be out in July through the Mac App Store.

Apple says “Lion requires an Intel-based Mac with a Core 2 Duo, i3, i5, i7 or Xeon processor and 2GB of RAM,” and it can be installed on all of your authorized personal Macs, provided they’re all running Snow Leopard.

iOS 5: It’s Like Getting a New iPhone
Up next, Apple Senior VP of iOS Software Scott Forestall previewed iOS 5.

Apple says “the iOS 5 beta release includes over 200 new features that will be available to iPhone, iPad, and iPod touch users…” including Notification Center, borrowing heavily from the jailbreak app Mobile Notifier (Mad props to the Mac OS Ken: Live caller who said that was the one thing HE’D want from the OS update.) Then there was iMessage, Newsstand, a better Safari with a read later feature and tabbed browsing, super deep Twitter integration, better camera software… Oh, and did I mention you don’t need a computer anymore?

Quoting Apple’s site:

With iOS 5, you no longer need a computer to own an iPad, iPhone, or iPod touch. Activate and set up your device wirelessly, right out of the box. Download free iOS software updates directly on your device. Do more with your apps — like editing your photos or adding new email folders — on your device, without the need for a Mac or PC. And back up and restore your device automatically using iCloud.

The iOS 5 beta and SDK are available NOW for members of the iOS Developer Program. It’ll be available as a free software update for iPhone 4, iPhone 3GS, iPad, iPad 2, and the third and fourth generation iPod touch this fall.

iMessage: Apple’s Jab at Cell Carriers
When’s the last time Apple held an event without upsetting somebody’s established order of things? I’m not sure, but they kept the streak alive this week.

I mentioned iMessage earlier. Apple describes it as bringing the functionality of iPhone messaging to all of your iOS devices — iPhone, iPad and iPod touch. Built right into the Messages app, iMessage allows you to easily send text messages, photos, videos or contact information to a person or a group on other iOS 5 devices over Wi-Fi or 3G.

iMessages are automatically pushed to all your iOS 5 devices, making it easy to maintain one conversation across your iPhone, iPad and iPod touch. iMessage also features delivery and read receipts, typing indication and secure end-to-end encryption.

What does it not include? The need for a text messaging or multi-media message plan, which could really annoy the 200 carriers with whom Apple has partnered to get the iPhone out on a global scale.

Daring Fireballer John Gruber says that carriers may not have seen it coming. Quoting his piece: A well-informed little birdie tells me that Apple’s phone carrier partners around the world found out about iMessages when we did: during today’s keynote.

And that was the first of two smacks delivered by iMessage, with the second landing on the jaw of Research in Motion. Electronista says “Apple made clear its intentions to steal away BlackBerry users by launching its own equivalent to BlackBerry Messenger in iOS 5…” that would be the iMessage service that’s likely also giving the carriers the agita. Gruber: Source Says Carriers May Not Have had Heads-Up About iMessage

Of Steve Jobs and iCloud
So far I have failed to mention Apple CEO Steve Jobs, though as promised last week. He was there, kicking off the Keynote and talking up iCloud.

I’m not sure how to describe iCloud without lapsing into marketing speak, especially if you have more than one Apple or iOS device. Apple calls iCloud “a breakthrough set of free new cloud services that work seamlessly with applications on your iPhone, iPad, iPod touch, Mac or PC to automatically and wirelessly store your content in iCloud and automatically and wirelessly push it to all your devices.

Revolutionary words in that sentence… “free” and “PC.”

“When anything changes on one of your devices,” claims Apple, “all of your devices are wirelessly updated almost instantly.” Jobs was funny in his intro of the service saying, “Why should I believe them, they’re the ones who brought me MobileMe?”

“It wasn’t our finest hours,” he acknowledged, “but we learned a lot.”

So, what’s different? Contacts, Calendar and Mail. They were the big selling points for MobileMe, though they’ve now been reworked and rewritten to work seamlessly with iCloud, including such additions as shared calendars and push mail accounts that are both ad-free and free.

The App Store, iBookstore, and iTunes can now download purchased audio, apps and books to all your devices, not just the device on which they were purchased, by which I mean NOW. That’s already been activated on iPhones, iPads, and iPod touches.

iCloud Backup automatically and securely backs up iOS devices once a day over Wifi guarding purchased music, apps, books, pictures and video on the Camera Roll, device settings and app data.

And it stores all documents created using iCloud Storage APIs, and automatically pushes them to all your devices, and it’s got the long rumored Photo Stream feature, and other stuff about which you can find out more at Apple’s iCloud Web site.

There was more to the music side than just being able to download songs you’ve bought from iTunes on other devices. iTunes in the Cloud does include the “Scan-and-match” service about which we’d heard speculation, and it’ll work with stuff not bought on iTunes.

I know.

According to Apple’s press release, “music not purchased from iTunes can gain the same benefits by using iTunes Match, a service that replaces your music with a 256 kbps AAC DRM-free version if we can match it to the over 18 million songs in the iTunes Store.” And if they can’t, that they’ll upload to the cloud.

iTunes Match will be available this fall — as will most of the rest of the iCloud features — for $24.99 a year. The rest of iTunes in the Cloud is — as I mentioned — already available.

So, to recap: iCloud includes 5GB of free cloud storage for Mail, Document Storage and Backup. Purchased music, apps, books and Photo Stream do not count against the storage limit. All of that’s free.

And then iTunes Match will run buyers 25 bucks a year, and it looks like — for now at least — iTunes Match will be for US consumers only.

WWDC Analyst Roundup
So, there were the announcements and demos, and then Apple shares dropped close to five-and-a-half bucks. Apparently someone was still expecting hardware. The thing is, I can’t figure out who.

We know the home-run hitting amateurs weren’t expecting anything along those lines, and neither were the pros. In fact the pros were pretty much stoked by what they saw, issuing note after note after note by Tuesday morning.

Fortune outlined a slew of them, saying — for the most part — analysts who follow Apple understood that “the hundreds of improvements in its software ecosystem — big and small — that Apple announced Monday could, in the long run, sell more devices, convert more customers, and make more money for the company than the new iPhone some were apparently still expecting Steve Jobs to pull out of his sleeve.”

Running down a few:

Ticonderoga Securities analyst Brian White In our view, these new announcements further strengthen Apple’s digital ecosystem by providing consumers with increased functionality, enhanced ease of use, greater efficiency and cool new features that we believe will drive further adoption of Apple devices in the future.

Plus he liked seeing Steve Jobs on stage.

Deutsche Bank’s Chris Whitmore We believe iCloud will greatly increase the stickiness of the Apple platform, particularly for multi-device iPad/iPhone/Mac owners, and further differentiate the Apple platform in terms of scale and size.

He also likes the fact that it’ll be free, iTunes Match not included.

Needham and Company’s Charlie Wolf What distinguishes iCloud is that it’s virtually invisible to the user. As Steve Jobs put it, “it all just works.” Synching files with a Mac or PC is now over.

UBS analyst Maynard Um It’s all coming together for Apple. Today’s Worldwide Developers Conference demonstrated Apple’s intense focus on making its hardware ecosystem attractive by differentiating itself through software. We believe the seamless integration of applications and content across the Apple ecosystem is a major step in the right direction for the company, and one that we believe will set Apple up nicely to continue to drive hardware sales to consumers well into the future.

BMO Capital’s Keith Bachman We believe iCloud will entice users to join the Apple family, and encourage users of Apple products to stay within the Apple family by allowing seamless integration of all devices.

Canaccord Genuity’s T. Michael Walkley With iTunes Match, Apple allows customers to essentially grandfather in all songs already in iTunes but not purchased from Apple into Apple’s cloud for use across a user’s iOS and Mac OS devices for only $25 per year. By doing this, Apple has significantly lowered the barrier to entry into the iOS cloud ecosystem for new Apple customers.

RBC Capital’s Mike Abramsky No Surprises, but Possible Game Changer… By “cutting the cord” to the PC, Apple may expand its addressable device market by 4x, addressing the approximately 3 billion handset users who have a phone — but not a PC. We believe we may see new devices in time, based off iCloud services. As we expected, Apple did not unveil a new iPhone at WWDC; however, we continue to expect iPhone5 in September.


Citi’s Richard Gardner In our opinion, the key positive surprises from today’s announcements included 1) the $29 upgrade price of Mac OS X Lion (versus $129 for prior Mac OS X upgrades… he apparently didn’t hear about Snow Leopard), 2) PC-less activation, software updates and content synchronization for iOS devices, and 3) FREE iCloud synchronization service.

Morgan Keegan’s Tavis McCourt We view iOS 5 as a highly significant upgrade, as it begins Apple’s transition from a Mac-centric company to a cloud-centric company.

And Sterne Agee’s Shaw Wu Other announcements we found interesting include: (1) iMessage; (2) Twitter integration; and (3) No PC required.

Apple Subscriptions Take it on the Chin
The Financial Times has sent a pretty clear message to Apple: Stick your subscription plans.

Engadget says the paper has launched a new Web app meant to get around Apple’s 30 percent revenue cut.

The Financial Times doesn’t say that’s the reason, of course. They say the single, cross-platform app will let them issue updates more frequently, which I guess makes saving the 30 percent and asking for whatever info you want just a happy accident.

The content is free until July 14th, at which point most of us can stop checking out the Financial Times.

And only a couple days after the FT announcement, it looks like Apple’s backed off of its most troublesome subscription rule… troublesome for content owners, that is.

Fortune says the company has pulled the requirement that companies with Apps that sell content have to provide an option for selling that content through the application. I’m not sure that that makes as much sense as I want it to, so let me use an example: Amazon.

As it stands right now, people who buy Kindle books buy those books through Amazon and can read them on the Kindle app for the iPad. It seemed that Amazon would be required to offer a way for buyers to buy those books through the application as well, which would have given Apple 30 percent of the sale price — and might have run the risk of wrecking Amazon’s eBook profit margin.

What do consumers care, though? They get to pay Apple through the same payment method used for iTunes and be done with it.

Under the changed rules, App developers do NOT have to provide the in-app purchase option, leaving their profit margins intact. There’s still a problem, though: While they can sell content online and allow people to read, listen to, or watch it through an iOS app, they cannot put a button in the app that sends people online to buy.

As AllThingsD’s Peter Kafka explains it: Now, apps can offer access to content purchased outside of Apple’s walls, as long as the app doesn’t have a “buy” button that connects consumers directly to an external store. That is: Apple won’t make it easy for users to buy in-app content without going through Apple’s store, but it won’t outlaw it, either.

Probably no big deal for the likes of Netflix. Still a potentially big deal for Amazon’s Kindle app since it’s going to add steps not necessary for current users of the app, assuming Apple makes them change the existing app.

Whatever the case though, it kind of looks like Apple blinked.