WWDC 2019: Apple makes renewed push into services
Apple’s competitors have caught up in the smartphone race, often equipping their devices with better cameras or selling them at price points that call into question why the iPhone commands any premium at all.
Google’s Pixel 3a, a new mid-range phone with a vaunted camera, sells for just $399 — one-third the price of an iPhone XS Max with the same 64 gigabyte memory, or $50 cheaper than an iPhone 7 with half the memory.
At Apple’s Worldwide Developers Conference in San Jose on Monday, the iPhone maker responded to the increased competition by taking an aggressive stance on intangible features that its rivals will struggle to match.
“Today was all about the ecosystem,” said Neil Cybart, an Apple analyst at Above Avalon. “[Apple] wants to compete on things that aren’t just the technology, but something more.”
One example is Apple Maps, a service that was much derided when it debuted in 2012. But Apple said on Monday that it has rebuilt Maps from the ground up, flying planes and driving 4m miles to collect detailed images for Look Around, an on-the-ground viewing experience akin to Google Street View.
A key feature for Maps is Apple’s pledge to let users navigate while “protecting user privacy”. Google parent Alphabet made a similar claim last month when it expanded Incognito Mode from its Chrome browser, but its credibility in guarding consumers’ data has been questioned, given that 80 per cent of its revenue come from advertising.
“Compared to what’s out there, Apple goes further and says, ‘We have the privacy model’,” said Mr Cybart. “The business model is built on that, whereas for other companies it’s not.”
The Maps improvement was one of dozens of small iterations announced on Monday. Others included menstrual cycle tracking on the Apple Watch and replacing the iTunes store with three distinct apps for music, videos and podcasts. Many of the new features were similar to those already used by rivals Spotify and Netflix, such as showing the lyrics of a song in real time, or giving personalised TV recommendations.
But in many cases Apple riffed on a theme rather than just copying it, as in the case of “Sign in with Apple”, a feature enabling users, including those on Android, to log into third-party apps.
Facebook and Google already offer this feature, but have gotten into trouble for handing over data to developers without users’ knowledge. Apple emphasised that its version would closely guard a user’s identity, even giving the option of logging in with a random email address that will auto-forward messages.
Carolina Milanesi, analyst at Creative Strategies, said it was hardly a game-changing innovation, but one that could earn Apple plaudits with customers for an emphasis on privacy.
“It’s not a question of higher moral ground, it’s that their business model allows them to do it,” she said.
The only significant hardware revealed on Monday was a new Mac Pro, starting at $12,000 and aimed at creative professionals. At $999, its display stand alone costs more than a mid-range desktop from Dell, putting it far out of reach for most consumers.
The market for such a product is limited, but it harks back to the 1990s when Apple had a small market share yet was popular among musicians and film-makers. Analysts say the premium offering could also create a “halo effect” that makes other Apple products more appealing to consumers.
Monday was also a big day for the iPad. Craig Federighi, senior vice-president of software engineering, spent much of his time on stage emphasising new capabilities, including split-screen functions and simpler ways to copy and paste images or text across apps. The iPad will now support external USB drives, appealing to users who want a tablet for more than just reading, listening to music and watching films.
“It’s like the iPad is graduating to the next level,” said Wayne Lam, analyst at IHS Markit.
Analysts say Apple’s push into services is rooted in a goal to be at the centre of consumers’ digital life. That push is less about creating the best products, and more about embedding users into an interconnected system that is simple to use across devices.
“The value you get from the whole ecosystem is way more than the 1+1=2,” said Ms Milanesi.
“You’re more and more entrenched. It’s getting to the point now where maybe the iPhone is not the reason I’m with Apple, maybe it’s the iPad. But the fact that I have an iPhone makes my iPad perform better, so I’m not going anywhere.”
“It’s finding out in those four or five devices that you use, what is the sticky point, what is the glue?” she added. “That’s different from person to person. So whichever way they go with it, they get you and they keep you.”