Monday June 13, 2016
Welcome to our TOPLive blog of Apple's Worldwide Developers Conference, where the Cupertino company tells its community of programmers and acolytes what is coming up.
Apple's stock has struggled over the last year as investors worry the company won't be able to keep up the pace of revenue growth amid a slowdown in China and weakening global demand for smartphones.
We'll go live at 9:50 am PT and will continue with news, analysis and market reaction starting at 10 am in San Francisco's Bill Graham Auditorium. I'm Jack Clark and I'll be joined by fellow tech reporter Gerrit De Vynck in leading coverage today.
Here's a list of today's contributors:
- Gerrit De Vynck, Lead Blogger, Tech reporter
- Alex Webb, Tech Reporter
- Jack Clark, Tech Reporter
- Dani Burger, Stocks Reporter
- Rita Devlin, Social Media Monitor
- Shira Ovide, Bloomberg Gadfly Columnist
- Anny Kuo, TOP Editor
- Caleb Solomon, TOP Editor
- Romaine Bostick, TOP Editor
- Tal Barak Harif, TOP Editor
Amidst the operating system upgrades for all of its hardware, Apple's widely expected to announce today new ways its developers can tap into its Siri personal assistant, as it competes with more fleshed-out proto-AI systems from rivals Google (Google Assistant), Amazon (Alexa), and Microsoft (Cortana).
It will also talk more about price changes it has made to the app store, where it will also add new discoverability options, a revamp of its music streaming service, and may throw in some wildcard announcements around its messaging products and Apple Pay.
Apple has used WWDC to unveil software announcements since 2013, leaving new iPhones, iPads and laptops to separate hardware-focused events.
Last year, the big announcement at WWDC was Apple Music, punctuated by a performance from Toronto rapper Drake. The streaming service has grown quickly since then to 11 million users, largely helped by the fact that Apple made the first three months free and already had millions credit cards on file from iTunes customers.
Still, it's been challenged by critical reviews and executive departures. Apple could unveil a revamp of the streaming service today to fix some of those problems and make it more intuitive to use, people familiar with the product told Bloomberg News in May.
Previous years have usually featured updates to the operating systems for Apple's various devices. Expect more of that along with the Siri and Music updates.
Siri was the first voice-activated virtual assistant from a tech giant when launched back in 2011, but its abilities have fallen behind those of Google and Amazon in the intervening years. Here's what customers would like to see updated.
Apple is seeking to extend Siri at a time when its arch-rival Google is pouring more resources into its own conversational systems. Google is preparing to launch a new messaging application, named Allo, that comes with its own personal assistant. That's the first in a salvo of AI-related products the company plans to release as it tries to cement its ties to its users and developers. If Apple can add more smarts to Siri and make it easier for its vast community of developers to tap into, then it stands a better chance of keeping its customers using products designed by Apple to get things done.
AI-based personal assistants are becoming the main way that companies try to build a relationship with their customers. Amazon has sold millions of its well-reviewed 'Echo' personal assistant, giving the e-retailer a footprint in kitchens and living rooms across the world. Google is expanding into this area as well via a smart assistant called Google Home. Though Apple does not have products here today, having a better, smarter Siri would lower the risk of people defecting to other assistants fielded by other companies.
Last quarter, Apple's sales growth was negative for the first time in 51 quarter. CEO Tim Cook said the overall smartphone market isn't growing amid global economic uncertainty.
All of this plays into Apple's central goal: sell more iPhones. With Spotify still winning the music streaming game and Amazon and Google pushing ahead with personal assistants, Apple needs to keep pushing into both of those capabilities to keep customers coming back for new iPhones every year or two.
Also, Apple's revenue is set to drop for a second consecutive quarter as iPhone sales slow. Part of Cook's response has been to push the services business to secure more stable cash flows. Since software products such as Apple Music, iCloud and the App Store account for most of the services, that's lent an added importance to WWDC, which in the past has played second fiddle to the hype-heavy iPhone and iPad launches.
Apple marketing head Phil Schiller will probably expand on changes to the App Store announced last week. This is a bigger deal for developers than an improved Siri since it affects their bottom line.
This is a bigger deal for developers than an improved Siri since it affects their bottom line. Starting today, developers will pay 15 percent of their revenue to Apple if a customer has subscribed to an app for more than a year. At the moment, Apple takes a flat 30% of every cent spent via the App Store.
The new model incentivizes subscription-based apps, allowing Apple to get more predictable, long-term revenue from the store. He'll also explain the `Search Ads', which will let developers pay for their apps to get more prominent placement in search results. The product is pretty similar to what Google does with web searches, placing a clearly marked ad at the top of the search results.
The following Apple bigwigs are likely to take the stage:
- Tim Cook, chief executive officer
- Eddy Cue, senior vice president of internet software and services
- Phil Schiller, senior vice president of worldwide marketing
- Craig Federighi, senior vice president of software engineering
We could also see Jimmy Iovine, the legendary music producer who sold Beats Music to Apple in 2014 and now helps run the Apple Music streaming service. Canadian rapper Drake made a guest appearance last year too, so there may be another musical artist gracing the stage.
Quite a crowd was waiting to get inside the Bill Graham Civic Auditorium:
A huge rush to get to the seats with power plugs when the doors opened 20 minutes ago. A 10-ft high Apple logo built out of seemingly random, multi-colored lines of code dominates the screen at the front of the auditorium.
Shares are down 1.3% heading into the event. Some of that slump might be collateral from the Microsoft-LinkedIn deal.
Read our main story here:
Tim Cook takes the stage. He wants to talk about the shooting that occurred yesterday in Orlando, Florida. "We want to offer our deepest sympathies to everyone whose lives were touched by this violence".
Tim Cook has WWDC's attendees rise and join in a moment of silence for the victims.
Tim Cook publicly came out as gay in Bloomberg Businessweek in 2014 and he has talked far more about civil rights and environmental impact of Apple products than Steve Jobs did. He seemed choked up during that moment of silence.
"Really big and jam-packed morning planned for you,'' Cook says. Previous reporting says AI, music, software updates and App Store changes could all be covered.
The App Store's 200 million apps have been downloaded 130 billion times Cook says. Crowd is mostly developers, who've made those apps.
First up of Apple's four operating systems is Watch. Apple's Kevin Lynch is talking about updates that'll make the Apple Watch faster. "Don't blink," he says as he loads an app.
Apple doesn't disclose sales figures for the Apple Watch, but IDC estimates about 11.6 million of them shipped in 2015, representing the first eight months of the device's life on store shelves. That's impressive for a brand new type of tech product, but the Watch isn't considered an out-of-the-gate hit.
Updates to Watch announced today are pretty incremental. Faster app loading, easier to respond to messages and a Minnie Mouse watch face instead of just Mickey Mouse.