Excerpts from the notes we’ve seen. More as they come in.
Wamsi Mohan, Merrill Lynch: WWDC keynote focused on privacy, health, collaboration and developer tools. As expected, WWDC 2021 showcased many new software features enabled by new versions of the operating systems for iPhones, iPads, Mac, TV and Watch. Key takeaways are (1) Improved privacy features (apps, Safari, e-mail), (2) Focus on Healthcare (watch, fitness +, health information tracking and sharing with families or Doctors), (3) Allowing access to features that only Apple’s apps had access to in prior OS releases perhaps to proactively address regulatory scrutiny and pressure. More and more functionality used for identity verification is now available on iPhone (Driver’s License, Hotel keys, Car keys, Subway transit cards etc.). As the installed base of devices gets larger and Apple enables more cross platform features (FaceTime with Android), Apple is positioning its products to take a more central role in our lives in Health, privacy, and collaboration. Neutral. $160.
Martin Yang, Oppenheimer: Audio as an interface. WWDC 2021 Keynote is a relative letdown comparing to prior years. Many key features coming to next gen iOS/iPadOS/ macOS are already widely in use from alternative apps, devices, and operating systems. However, Apple managed to shine brightly in audio-related features. Apple’s unique integrated hardware and software design not only makes AirPods a Fortune 500-sized business, but also the centerpiece of a new generation of an audio-centric user interface. No competing device, software, or services are remotely close to Apple regarding its audio interface’s overall usability, consumer touch points, and accessibility. Apple’s leadership in audio features seem even more fearsome considering how Siri, as a standalone voice assistant, is a less capable product than Amazon Alexa or Google Assistant. Outperform. $160.
Katy Huberty, Morgan Stanley: WWDC Highlights Software Differentiation. There were a number of key themes evident in this year’s OS updates, from greater cross platform integration of features (i.e. bringing Widgets to iPadOS 15), to more intelligent personalization and customization options, to new work and learn from home enablers, and a renewed focus on putting the consumer at the center of their health decisions. And in our view, what remains clear is that Apple’s vertically integrated ecosystem of world-class hardware, software, and industry- leading services remains a key point of differentiation that competitors cannot replicate, which has allowed Apple to take share in every major hardware category it participates in over the last 6 months. We expect these new software updates combined with new hardware launches later this summer and fall to allow Apple to post a third consecutive year of growth in FY22, equating to a 12% topline CAGR between FY19 and FY22. Overweight. $161.
Amit Daryanani, Evercore: Top 5 announcements. Apple hosted its annual developer conference and unveiled new operating systems, improvements to FaceTime, Live Text, and many additional updates across its various product lines. Major announcement include: 1) iOS 15, which comes with major FaceTime updates including cross platform functionality, spatial audio and voice isolation. iOS 15 will also include new privacy controls that include moving Siri to on-board processing. Apple Wallet will now support a wider range of functions, including hotel room keys and identification information that can be used to pass through TSA at airports. 2) iPadOS 15, which includes updates to multi-tasking and a more customizable home screen. Overall, far fewer updates to iPadOS relative to iOS. 3) watchOS 8 with upgrades to its health tracking and a new Mindfulness app. WatchOS will also be able to take advantage of some iOS features including car key support and a new home app for controlling smart home devices. 4) Siri is coming to third-party devices with integration available for HomeKit accessory makers. 5) Mac OS Monterey will include more interoperability between Mac and iPad devices including the sharing of a keyboard/mouse. Outperform. $175.
Harsh Kumar, Piper Sandler: Apple Keeps Raising the Bar. At its WWDC, Apple introduced a series of small but interesting user-friendly changes across its product families that keep pushing the performance bar higher. In our view, some standouts include making FaceTime more user and corporate friendly, text recognition from pictures, and pushing UWB beyond cars into homes, hotels, and offices. On the privacy front, Apple is making email information less trackable while also providing an App Privacy Report on individual apps. Finally, we feel Apple continues to make great progress on the healthcare front, with new features measuring steadiness, lab result explanations, and health sharing. Overweight. $160.
Gene Munster, Loup Ventures: Announcements we were hoping for and didn’t see. Apple did not reveal new MacBook Pros with M1 chips, which was a WWDC prediction of ours. Separately, there was no mention of MR goggles, which we had in the long-shot category. Our best guess is that an MR device will be previewed at next year’s WWDC.
Daniel Ives, Wedbush: Initial Recap of WWDC Keynote; All About iOS 15 and New Macs. As usual for WWDC, all eyes were on iOS upgrades and software enhancements for the coming year as developers are eagerly awaiting the next software improvements to come out of Cupertino with surprisingly no new product introduction on the Mac front as part of the festivities. iOS 15 was introduced and is very focused around new device privacy protections, various notifications/lock screen changes, and a revamped iMessage feature set. This follows the iOS 14.5 release which has doubled down on privacy features for the consumer at a time which Apple has directly put itself on a collision course with Facebook around the ability for users to block data tracking. Outperform. $185.