How Apple Aims to Stay a Step Ahead

by Brad Moon | June 12, 2012 10:00 am

How Apple Aims to Stay a Step Ahead

At Apple’s (NASDAQ:AAPL[1]) 2012 Worldwide developer Conference (WWDC) yesterday, CEO Tim Cook demonstrated that Apple isn’t resting as the competition for mobile dominance increases. It’s going on the offensive.

Indeed, 2012 has the potential to be watershed year for the mobile industry. Microsoft (NASDAQ:MSFT[2]) is prepping Windows 8 for smartphones and tablets, Google’s (NASDAQ:GOOG[3]) Android version 4.0 — or Ice Cream Sandwich — is gaining traction and there’s even the possibility that Research In Motion’s (NASDAQ:RIMM[4]) upcoming BlackBerry 10 may be worth considering.

So, at WWDC, Apple announced the release this fall of its newest smartphone operating system, iOS 6, which will offer over 200 new features, including key developments intended to keep it ahead of the pack and to leverage the growing movement from desktop to mobile. Here’s a look at some highlights from WWDC:

Siri Gets Smarter

The voice-recognition system that was a big part of Apple’s iPhone 4S marketing campaign gets a big boost. Besides expanding to additional markets (including Canada), Siri gains new capablities, including: Access to sports scores (even individual player statistics) and movie listings (along with integration with film review site Rotten Tomatoes[5]); restaurant bookings through OpenTable (NASDAQ:OPEN[6]) and ratings thanks to Yelp (NYSE:YELP[7]) integration; voice control of Facebook (NASDAQ:FB[8]) and Twitter; and Siri-controlled app launch. Apple has even inked deals with nine auto manufacturers to integrate Siri[9] into their vehicles via an “Eyes Free” steering-wheel button that will launch Siri from your iOS device. Carmakers  onboard include General Motors (NYSE:GM[10]), BMW and Toyota (NYSE:TM[11]).

Beyond Google for Maps

I wrote last week about Apple’s feud with Google[12] and the likelihood that Google Maps’ tenure as the default navigation app for iOS was done. Now, Apple confirms that Google has been given the boot in favor of a homegrown Maps app. Dutch digital mapmaker TomTom appears to be working with Apple[13] to provide the street maps, but Apple has acquired technology to handle much of the heavy lifting in-house. Map features will include 3D aerial views, turn-by-turn navigation, real-time traffic and Flyover — a feature that offers close-up views of major architectural attractions.

Combined with Siri and local search, the new Maps app has the potential to make Apple a serious contender in the rapidly expanding local-search ad market.

Other significant features in iOS 6 include Facebook integration, the ability to make FaceTime video calls on a cellular network, new Mail functions including VIP designation to make specific senders stand out and a new Passbook feature that manages digital passes, gift cards, coupons and tickets with location-aware alerts.

MacBook Pro Gets Retina

When Apple started this whole “retina” display arms race that has seen ppi (pixels per inch) become a standard that smartphone displays are measured by, it was only a matter of time before it expanded into PCs. The iPhone 4S has a 326 ppi display; the new iPad’s display is 264 ppi, but Apple’s highest resolution MacBook Pro had a 135 ppi display that seemed positively fuzzy in comparison.

The new 15.4-inch MacBook Pro with Retina display offers a 2,880 x 1,800 pixel display (over 5 million pixels) for a ppi of 220. The new MBP loses its optical drive and a few pounds — not quite a MacBook Air, but at under 4.5 pounds, it’s significantly sleeker and a full pound lighter than a standard 15-inch MBP. Starting price is $2,199, a $400 premium.

Other hardware was updated, including the MacBook Air line, which faces increased pressure from Intel’s (NASDAQ:INTC[14]) Ultrabook[15] platform.

What Wasn’t Said

Cook didn’t mention two things, which also offers signals about where Apple is going.

First is that iOS 6 won’t run on the first-generation iPad. This means the company is willing to draw the line at two years for hardware before it becomes obsolete in terms of being able to run current operating systems. While good for investors (people may be more likely to buy a new device in order to enjoy the benefits of a new operating system), it does risk alienating people who may be wary about buying into an expensive device with such a short “supported” lifespan.

This also cuts the pool of potential customers that iOS app developers can expect to sell to if they want to leverage new iOS features.

The second is that Apple axed the 17-inch MacBook Pro from its notebook lineup. It did update the Mac Pro, the company’s professional desktop system, after letting it languish for two years (a lifetime in computer terms), but only minimally. This follows the January 2011 discontinuation of Apple’s Xserve servers.

The message seems to be a shift away from the professionals who used to be Apple’s core customers — the ones who bought the high-end portable and desktop workstations — and a stronger focus on consumers and general business users. This is a much bigger market, but it risks driving some of the these professionals (along with accompanying software developers) to the Windows platform.

At the end of the day, it was clear that Apple isn’t content to just hold its current market share in mobile; it’s preparing to grab a bigger chunk. While iOS 6 represents the foundation, the 4G iPhone 5 — expected in the fall — is likely to be Apple’s main entrance. And while PC sales may be fading, Apple is strengthening its offerings for those who might find an iOS device is a gateway to an Apple computer.

Endnotes:
  1. AAPL: http://studio-5.financialcontent.com/investplace/quote?Symbol=AAPL
  2. MSFT: http://studio-5.financialcontent.com/investplace/quote?Symbol=MSFT
  3. GOOG: http://studio-5.financialcontent.com/investplace/quote?Symbol=GOOG
  4. RIMM: http://studio-5.financialcontent.com/investplace/quote?Symbol=RIMM
  5. Rotten Tomatoes: http://www.rottentomatoes.com/
  6. OPEN: http://studio-5.financialcontent.com/investplace/quote?Symbol=OPEN
  7. YELP: http://studio-5.financialcontent.com/investplace/quote?Symbol=YELP
  8. FB: http://studio-5.financialcontent.com/investplace/quote?Symbol=FB
  9. nine auto manufacturers to integrate Siri: http://www.thecarconnection.com/news/1076863_apples-siri-coming-to-nine-automakershands-and-eyes-free
  10. GM: http://studio-5.financialcontent.com/investplace/quote?Symbol=GM
  11. TM: http://studio-5.financialcontent.com/investplace/quote?Symbol=TM
  12. Apple’s feud with Google: http://investorplace.com/2012/06/apples-map-app-could-cramp-google/
  13. TomTom appears to be working with Apple: http://www.engadget.com/2012/06/11/apple-tomtom-ios-6-maps/
  14. INTC: http://studio-5.financialcontent.com/investplace/quote?Symbol=INTC
  15. Ultrabook: http://investorplace.com/2012/01/5-stocks-to-surge-ces-intc-msft-dell-glw-siri/

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