Previewing WWDC 2021
Apple’s annual Worldwide Developers Conference (WWDC) will take place June 7-11. The event is a time for the company to preview its software updates to developers, alongside the occasional hardware update. Below we’ve outlined what we expect Apple to announce this year, along with a long-shot prediction, a preview of mixed reality goggles.
We expect an enhanced notification management system that will allow users to control their notification flow based on their current status, e.g., driving, working, sleeping. For example, when a user’s location or status is identified as “working,” they may be notified of calls, but not push-notifications from third-party apps.
Additionally, iPhone users may gain the flexibility to create automatic text replies based on their current status. Today, the feature is limited to a one-size-fits-all response when a user appears to be driving (Do Not Disturb While Driving).
At its most basic level, we view better notification management as a key workflow tool. This will be a welcomed improvement, given the fact that our phones are attached to us every hour of the waking day and are used constantly for communicating, working, learning, and playing. Knowing what you need to know, when you need to know it, is crucial for maintaining concentration and productivity.
White Noise focus feature
iOS 15 may bring background and white noise options to help users increase focus while working or studying.
We expect an update to the iOS Messages app adding social features around personal profiles, statuses, and public channels. This is in line with a Bloomberg report that the goal is to make the app “more of a social network” akin to WhatsApp. We view Messages as a super app, and one of the most powerful elements of the Apple ecosystem. Over the past few years, we’ve observed Messages increasingly being used as a combination of WhatsApp, Slack, and Venmo, thanks to the previous two major iOS updates that brought more personalization and organization to individual and group chats, along with the ability for peer-to-peer payments with Apple Cash.
We anticipate new 14-inch and 16-inch MacBook Pros featuring the second iteration of Apple’s M1 chips (M1X). M1 chips are currently available in the MacBook Air, MacBook Pro 13-inch, iMac 24-inch, and Mac mini. The new MacBook Pros are likely to come with a design refresh and expanded color selection, similar to the iMac update in April. Historically, Apple has used color to motivate people to dollar up (and increase margins).
Apart from the work- and learn-from-anywhere tailwinds, completing the Mac transition to Apple silicon is an additional reason we believe the Mac segment can outpace consensus growth expectations in FY22 and FY23.
We expect any updates to WatchOS will be geared towards personal health monitoring applications, a key emphasis in Apple’s long-term wearables strategy. We believe wellness monitoring features will slowly increase Apple Watch adoption in the years to come. Today we estimate about 12% of iPhone users are Watch users, and long term we believe the attach rate could reach 40%, which implies about 125m units a year (compared to our 46.5m estimate for CY21)
As an aside, Apple recently released a video previewing accessibility features coming to Apple Watch, including the ability for users to control certain functions with movements of their hand:
We view AssistiveTouch as a hint of Apple’s research and development regarding augmented and mixed reality devices because the underlying logic is the same: using physical gestures as inputs to control devices.
The long-shot: previewing Apples Mixed Reality goggles.
The wildcard for the event is whether Apple will preview its mixed reality (MR) goggles. Although hardware announcements are less frequent at WWDC, if a piece of hardware’s value is particularly dependent on developers, and the new product won’t cannibalize sales of an existing Apple product, it make sense to reveal it at WWDC. The question: is the product even ready to be previewed?
While the timing of MR goggles being revealed is an unknown, we believe its debut is a function of time. Aside from Tim Cook’s and Craig Federighi’s continued endorsement of the AR theme, the company has been inching the paradigm forward with features found in other Apple products. For example, AssistiveTouch is an example of gesture technologies that can be paired with a headset for control. Additionally the ‘Hey Siri’ voice-driven user interface would be foundational to any headset wearable product.
MR goggles will likely be a high-end niche product at the outset. As developers dream up new use cases and build AR/MR applications, we believe broader consumer adoption will follow, paving the way for consumer AR glasses from Apple around 2025. In our view, mixed and augmented reality is an open-ended opportunity for Apple.