In the keynote to their developers, Apple completely refreshed its notebook lineup, introduced iOS6, debuted Mountain Lion, integrated Facebook and highlighted its own mapping app.
New Notebook Lineup: Across the MacBookAirs and MacBookAirs, notebooks are supporting faster processors, faster graphics, enhanced USB, longer battery life and higher-resolution displays. Followers had hoped or expected Apple to announce retina display across the product line, which it did not. Apple did introduce a new product, dubbed the Next Generation Notebook, which operates like a high-end MacBookPro and looks like a MacBookAir. It is thinner, lighter and faster than the MacBookPro lineup and this one does offer retina display. The pixel density is 2880x1800 and with updated software from Adobe and Autodesk, it will enable designers to see details on a computer screen that have never been possible before. The resolution is higher than HDTV screens of the same size. Apple is shipping it immediately.
Importance: The refresh is great and will be appreciated by those are ready to replace their MacBookAirs and the MacBookPros. It has already been noted that there were a flood of Mac notebooks offered on the second-hand sites such as Gazelle within hours of the Mac refresh announcement, indication that users like the new features.
The new MacBookPro with retina display is a stunning computer, but so is the price tag at $2,199. For those in the graphics industry, it will be compelling; for the rest of us, for the time being, it's expensive. While some may be disappointed that Apple did not refresh the entire notebook line with retina display, there are positives to the limited introduction of retina display initially. First, there may be supply constraints to apply retina displays to the entire line. Second, all the software has to be rewritten to display properly on the new screens. It is highly likely that Apple did not want to debut new computers that made the programs people use most look blurry. Lastly, introducing high-end features breeds demand at the lower price points while Apple can learn how to maintain margins with higher-priced components. Investors should be happy about that.
Mountain Lion: Leading into the Mountain Lion discussion were these facts: There are 66M Mac users, which tripled over the past 5 years; Within nine months of Lion’s introduction, 40% had converted, in one-third the time as the last OS upgrade; iCloud now supports 125M users. Mountain Lion will incorporate 1,700 new features, and eight were highlighted in the address. iCloud will integrate iMessage, notifications and reminders. Notifications and alerts will be displayed in user-friendly ways. Dictation, straight into Microsoft word, is now possible. Sharing into social networking such as Twitter can be done from any application. Safari will now feature a unified search field. Power Nap enables the Mac to work in nap mode, and fetch email, software updates, and backup. AirPlay Mirroring enabled to televisions or projectors via Apple tv. And, Mountain Lion brings Game Center for Mac.
Importance: Mountain Lion intensifies Apple’s ecosystem among iOS devices and Macs. It makes a decision to buy a computer outside the ecosystem, such as an HP laptop, suboptimal. And, Apple has reduced the price of this OS to make it a no-brainer to upgrade. Apple is selling Mountain Lion for $19.99 for all Macs in the house, compared to the previous Lion release that was sold for $29.99. Whereas before, Apple had created a “Halo Effect” in which the purchase of one Apple device showcased the user experience leading to another device purchase, now Apple has created an “Inner Circle” of devices such that the user experience is the same among screens. Increasing the integration between desktop and mobile intensifies the stickiness for the entire Ecosystem.
However, most important to me as an investor were the features built in for China. The new Mountain Lion will include a new dictionary, new fonts and Baidu as the default search engine (already capturing 80% of the Chinese search market). This is extremely crucial, as China is one of the growth drivers for Apple over the next ten years.
iOS6: Again, leading into the iOS6 discussion were these facts: 365M iOS devices have been sold and 80% of these have upgraded to iOS 5. Over 1 Billion messages are sent everyday. Game Center Network has 130M users. iMessage has 150M users. Siri became much smarter in iOS6 with knowledge on sports, restaurants and movies through integration of content partners such as Open Table and Yelp. FaceTime is now possible without WiFi. Two highly-anticipated announcements, Facebook integration and Apple’s own Map program, materialized. Apple also introduced Passbook, offers boarding passes, movie tickets and “wallet” apps such as the Starbucks app.
Importance: All of these announcements are a direct hit against Google’s Android. Apple is bringing content partners into its Ecosystem to further make use of these features, such as Facebook, more convenient for users and a selling point against an Android phone purchase or Android app development. Given that many third parties are developing to FaceBook, it brings in all of those new apps or sites into the Apple Ecosystem too. Apple’s new Maps offer turn-by-turn directions and 3D rendering, and leapfrogs over the current Google Map app on the iPhone. Apple signed up BMW, Mercedes, Land Rover, GM, Chrysler, Jaguar and Toyota to integrate the new turn-by-turn Maps into the cars’ system, which will serve to upgrade many of these autos GPS systems. The auto partnerships reinforce Apple’s influence and Ecosystem.
Siri is now available in more languages and integrated into the New iPad.
Passbook is likely to be the precursor to an Apple wallet. Today, the Starbucks app is the poster child for a successful purchasing app and has had an enormous ramp since introduction. Expect more features to be rolled out with Passport.
The Missing Announcements on “tv” or Macs. Apple did not mention Apple tv or Mac desktop upgrades. One can surmise that with the refresh of the entire notebook lineup, introduction of the retina-display MacBookPro, the new OS and the new iOS, there was already too much content for any other announcements. Additionally, the coincidence of silence on both Macs and tvs could suggest that something is in the works between the two, such as a MacTV.
Summary. Even without Jobs, Apple continues to create a “must have” excitement about their new products. The new software reinforces the integration between mobile, notebook and desktop, and introduces integration amongst new partners to reinforce the Apple Ecosystem. Apple is focusing on features for China, a large growth area for the company. Apple is benefiting now from more than a “Halo Effect” in which the positive user experience influences one to buy another Apple product; Apple has created an “Inner Circle” of products that renders it difficult to purchase outside the Ecosystem. This WWDC achieved its mission: To create and reinforce excitement around a tighter band of Apple products.
