Apple WWDC 2021 – Inching juggernaut.

Apple takes no risks at WWDC 2021.

• Apple inched the juggernaut of its ecosystem forward with a series of incremental updates that bring it into line with the competition and beyond that focused on user experience tweaks that took no real risks at all.
• This is exactly what happens when a company reaches this level of size and power because the legacy business is now so huge that it cannot be put at any risk meaning that it will inevitably miss the next trend that disrupts the smartphone.
• This is exactly what happened with Nokia in 2007 and I suspect that unless Apple is very lucky, history will repeat itself someday.
• That being said there is not much on the immediate horizon other than augmented reality, but this is so expensive to develop that only a handful (of which Apple is one) can afford to work on it.
• Hence, Apple looks safe for at least the next few years.
• Apple’s announcements inched its ecosystem along the long-term roadmap with some nice tweaks but very little that was consequential other than mouse input slowly coming to iOS and an admission that Siri is not a core asset for Apple.
  • First: iOS 15 which will be available as a free update in Q3 2021 which is in line with historical norms.
  • Here, Apple is integrating music and video into Facetime and is bringing Facetime’s functionality to be closer in line with Zoom and Teams.
  • The aim here is to keep usage within its own apps as much as possible as this is a big factor in terms of driving loyalty to its hardware.
  • This was echoed in its new Focus function which helps users have more granular control of notifications as well as a new feature that supports text recognition and re-use from within the photos app.
  • Wallet is also being enhanced to support government ID but given the scope for fakes, this will have to be rolled out slowly and tested very carefully.
  • Hence for those outside of the USA, this will be a very long time coming if it ever comes at all.
  • Probably the most interesting update in iOS 15 is Maps where Apple has added some very nice user experience upgrades that others don’t have.
  • Where Apple has its own map (USA/UK/Ireland & Canada) overlapping roads are much better displayed and the 3D rendering of buildings and landmarks is best in class as one would expect from Apple.
  • Apple has also improved public transport with reminders of where to get off and AR-based navigation to help the user find his bearings when he exits public transport.
  • Second, iPadOS where again the updates were nice to look at but only incrementally improved utility.
  • An obvious example is Widgets which has been updated to offer better and richer widgets that fit directly into the home screen and subsequent pages.
  • Another is Quick Notes which allows notes to be quickly taken while on a web page and then linked for subsequent reference.
  • However, the big update is the ability to better use the iPad in conjunction with a Mac.
  • Putting the iPad next to the Mac allows the Mac’s mouse and keyboard to be used on the iPad in a seamless way (called Continuity).
  • I suspect that the functionality will be quite limited, but this is yet another step towards putting mouse input onto the iPad and merging iPadOS and MacOS into one.
  • This is another example of how Apple takes no risks when it comes to its innovation.
  • It moves an inch, sees how it goes, and then moves another inch.
  • This will work very well until there is a paradigm shift in the digital ecosystem and then Apple will be caught with its trousers down.
  • Third, Smart home: This is the first time Apple has done something in the home for a long-time.
  • The focus was on tightly knitting together Apple’s products in the home context as well as making it easier for 3^rd parties to bring in their products.
  • Apple has created a new open alliance called Matter but it is only open to the point at which 3^rd parties are willing to play by Apple’s rules.
  • Hence, this will only improve 3^rd party support from the point of view of ease of use and not openness.
  • The most interesting announcement was the support of Siri on 3^rd party devices.
  • This is because it is a tacit admission that Siri is a 3^rd rate product and does not add any differentiation to the Apple ecosystem.
  • If Siri was like iMessage and a reason to own an iPhone, there is no way Apple would allow this onto third-party devices at it would diminish the appeal of its own.
  • It is through premium-priced hardware that Apple earns a return on its ecosystem and it would not willingly allow this to be undermined.
  • Apple continues to lag both Amazon and Google in the smart home and I didn’t see much here that is going to change that status quo unless there is a massive uptick in support for Matter.
  • Fourth, Miscellaneous bits and bobs: Some of the other nice-to-have features included Safari web extensions reaching iOS and iPad OS, better marketing tools for developers in the App Store, and a deepening of recreational health monitoring on the Apple Watch.
• The net result is that Apple is increasingly bringing its device ecosystem closer together which increases the incentive for the user to buy all of his devices from Apple.
• The company’s complete integration makes it much easier to make this work better than anyone else and this is where Apple still has a reasonable lead over everyone else.
• Many of the other updates especially related to AI merely bring it up to date further underpinning that Apple still lags Google in AI by a good 2 years.
• Apple’s ecosystem looks safe from any real competition for a few years to come but I see this as fully priced in.
• Hence, I do not hold Apple and find Alibaba a much more interesting ecosystem in which to invest for the next 12 to 18 months.