Apple is under pressure on its App Store rules from tough developers it will have to woo in the next WWDC
Apple Inc.’s annual WWDC developer event will have a different tone this year, and not just because the COVID-19 crisis has forced the smartphone giant to hold the annual conference virtually.
is in a tight spot with its developer community heading for Monday’s opening keynote as it faces an in-depth policy review of its App Store, which relies on third-party developers. European Union regulators recently opened antitrust investigations into the company’s App Store and Apple Pay services, and Apple has faced criticism from renowned developers, including Spotify Technology SA SPOT,
and the parent company of Tinder Match Group Inc. MTCH,
who think the company takes too much of the in-app purchases made by users of Apple devices.
The tension was highlighted this week in a dusting off with Hey, a messaging app that charges users $ 99 per year for its services but doesn’t give customers the option to purchase subscriptions through Apple. Apple asked the developers of Hey to add a subscription option in the app and threatened to remove the Hey app if they didn’t comply.
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Apple takes a reduction in subscription fees when customers purchase digital services through apps on iOS devices and developers are increasingly trying to direct users to websites for such purchases so that they don’t. not have to pay part of their subscription income to Apple. With that as a backdrop, CEO Tim Cook’s opening address – scheduled for Monday at 1 p.m. EST – could be much busier than in recent years.
“I think there’s more pressure on Apple to show what’s in store from a developer’s perspective,” Wedbush analyst Daniel Ives told MarketWatch in a phone interview. A massive developer exodus would be a problem for Apple, in his view, but he said developers are in a “quagmire” given the pervasiveness of the App Store.
Expected software updates
The virtual nature of the event will also give it a different feel, as “a big part of WWDC is the excitement, the crowd going up the escalators and the anticipation before Cook’s speech,” Ives said. This mood changes when developers are instead perched in front of their computers at home.
This year’s WWDC is expected to offer a preview of new software features slated for fall, when Apple is expected to launch its first 5G-enabled devices. Bank of America analyst Wamsi Mohan said health will be at the center of the story as he predicts the company will discuss a new fitness app that will allow users to watch fitness videos on their different devices and receive instructions as you exercise.
He expects the company to also be able to introduce a new augmented reality app that would allow users to engage in augmented reality experiences by scanning QR codes and roll out new options that would empower device owners. to personalize their home screens.
A new approach to semiconductors
On the hardware side, Apple is expected to officially announce that it will switch to a custom ARM processor for its Macs, although the company may not start rolling out devices with these chips until next year. The company currently uses Intel Corp. INTC,
chips in its Macs, but slowly evolved to outfit more categories of devices with custom processors.
“With Intel losing its transistor advantage (and not likely to regain its lead for several years, if ever), we think this has prompted Apple to change,” wrote Chris Caso, analyst at Raymond James, in a note to clients. .
Last year’s iPhone 11 custom processor “basically matches the performance” of top Intel and Advanced Micro Devices Inc. AMD,
processors, Caso said, citing computer hardware publication AnandTech. Apple plans to switch to TSM from Taiwan Semiconductor Manufacturing Co. Ltd.,
5-nanometer architecture with this year’s iPhone chips, he said, which could further improve performance.
Ives said the wider switch to custom chips gives Apple more control over its ecosystem, while Bernstein’s Mark Li argued the switch could also result in slight improvements in gross margins.
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WWDC generally focuses on software enhancements, but analysts aren’t ruling out the possibility of some hardware announcements beyond discussions about custom Mac chips. Apple could launch a new iMac, new on-ear AirPods, Bluetooth “AirTags” trackers or a new HomePod speaker, Mohan said.
Ives sees a strong possibility that Apple will stop including wired EarPods with new device purchases starting in the fall, which could both lower Apple’s costs and help spur more Apple purchases. AirPods.
Apple stocks have been resilient despite the trade disruption caused by the pandemic. The company has decided to temporarily close some stores in states that have recently experienced large spikes in COVID-19 cases, but investors appear broadly willing to overcome these challenges as the company prepares for the launch of its 5G device in autumn. Ives said 350 million of Apple’s 950 million iPhones in Apple’s installed base are ripe for upgrades.
Apple’s stock has risen 42% in the past three months and is trading slightly below a new all-time high set earlier in June. The S&P 500 SPX,
is up 29% over the past three months, matching the gains of the Dow Jones Industrial Average DJIA,
which counts Apple as a component.