By Gene Munster of Loup Ventures
- Apple’s annual developer conference starts next Monday, June 4th.
- Consistent with past WWDC’s, announcements will be software heavy. Most notably a preview of iOS 12 and the upcoming MacOS.
- We expect Monday’s keynote to be highlighted by extending the reach of Siri (most likely adding new domains, opening HomePod to more capabilities, and integrating Spotlight), along with additional AI tools (new Core ML extensions).
- We also anticipate new features around digital health (privacy and device management) and ARKit (development tools).
- Expect Siri integration with Beats.
- Collectively, these announcements advance the ease of use and intelligence of Apple’s mobile and desktop experiences.
Consistent with past WWDC’s, announcements will be software heavy. We expect the tone of this year’s developer conference to be similar to past years. Since 2000, we counted 47 software related announcements made at WWDC, 11 new hardware announcements, and 8 hardware update announcements. That compares to the past five years with 19 software, 3 new hardware, and 6 hardware updates. This year we are expecting 5 software announcements and 1 hardware-related announcement.
New Siri domains. In our testing of Siri over the past two years, we found the product lags measurably behind Google Home and marginally behind Alexa and Cortana. In our December-17, 800 question Siri test, she was able to correctly answer 75% of questions compared to 66% in April-17. Siri would have been able to answer about 85% correct if she was more competent within commerce and information. That 85% would essentially be on par with Google Assistant. Siri on HomePod is more limited in the number of domains, so adding support for things like navigation and email would quickly improve the experience. Siri can also improve the information utility by simply integrating Spotlight Search.
AI extensions. At the 2017 WWDC Apple announced Core ML. Core ML is a machine learning framework that sits beneath apps and third-party, domain-specific AI models, but above processing hardware inside of a Mac, iPhone, iPad, Apple Watch, or Apple TV. Core ML allows app developers to easily incorporate third-party AI models into their apps. App developers don’t need to be experts in ML to deliver an experience powered by the technology within their app. In other words, Apple will take care of the technical side of incorporating ML, which allows developers to focus on building user experiences. Core ML currently has the 15 domains listed below. We expect new domains to be announced at this year’s WWDC.
Digital Health. Apple has been a leader in the privacy movement. We expect further announcements related to new features that notify users when their data is being shared with developers. Additionally, iOS 12 will likely have new device management features to curb screen time and digital anxiety.
ARKit. We remain optimistic regarding AR’s potential. That said, the use cases of AR to date have lagged our expectations, due to a lack of reliable hardware and software to enable developers to build compelling AR experiences. We expect Apple to announce subtle new developer tools to improve the AR development process and ultimately yield more compelling AR applications.
Siri integration with Beats. The knock on HomePod is its $349 price is about 2-3x the price of a typical smart speaker. We believe Apple can advance its digital assistant ambitions with a $250 Beats-branded option that does not compromise HomePod’s $349 price point. We are currently modeling for HomePod to have a low-to-mid teens digital assistant market share, and this Beats integration does not change our market share outlook.
Disclaimer: We actively write about the themes in which we invest: virtual reality, augmented reality, artificial intelligence, and robotics. From time to time, we will write about companies that are in our portfolio. Content on this site including opinions on specific themes in technology, market estimates, and estimates and commentary regarding publicly traded or private companies is not intended for use in making investment decisions. We hold no obligation to update any of our projections. We express no warranties about any estimates or opinions we make.