It’s Apple World Wide Developers Conference time again. Cupertino’s announcements generally break down as one product announcement in the first quarter, a second in the third quarter and, in June, a look at PCs and the software than holds the entire Apple ecosystem together. Thanks to some high-profile acquisitions and unfortunate leaks we already know a bit about what to expect from this evening’s keynote at the Moscone West centre in San Francisco. Here’s a summary of the prediction with some idle speculation of our own thrown in.
1) A music streaming service
Starting with the easy bit. Apple acquired Beats Electronics in May 2014 for an estimated $3.2 billion and hasn’t done a whole lot with it. We haven’t seen any innovations in design or sound from on the headphones end of its business, but attention has always focused not so much on the successful hardware end of its business so much as the underperforming music streaming end. According to a report in Recode in May 2014, Beats Music had 250,000 paying across two pricing tariffs of $9.99 per month for a single user and $14.99 for a family account of four users (the latter only available through partner AT&T). Beats’ management were playing a long game but the numbers were low enough and the back-end robust enough to make it a sensible purchase.
Getting Beats Music on board solves a big problem for Apple. Having already taken on music locker services with iTunes Match and curated playlist services like iTunes Radio, the addition of an on-demand music service makes sense from a functionality perspective, never mind the fact that revenue from paid downloads is starting to decline.
One issue worth noting is whether Apple will see a streaming service as a way to generate revenue or merely block competitors like Spotify from growing their subscriber base. Artists like Taylor Swift and Radiohead have pulled their music from Spotify over royalty rates, so Apple will have to come up with a better deal for record labels and musicians. It will also have to deal with regulators over its walled garden approach that already cost it $450 million over price fixing in e-books with six major publishers. Apple likes exclusivity but regulators don’t. Can it get around this with the promise of exclusive content? Never mind content, what price point will it go for? Will it have a limited free tier like Spotify? Our take is an on-demand service will keep its $9.99 price point and add additional content for paying subscribers. Apple doesn’t do ‘free’ often and has openly criticised Spotify for convincing a meagre 15 million of its 60 million users to pay up for better audio quality and infinite track skipping. We’re expecting premium content for a premium price.
2) OS X without the bugs
One of Apple’s great tricks is keeping users up to date with the latest version of OS X and, if your machine can’t handle it, making sure consumers keep their hardware up to date to handle it. Speeding up the software’s refresh cycle to annual free releases has largely worked. It hasn’t always gone to plan, though. According to figures from Netmarketshare.com, Mac OS X Snow Leopard is still the third most popular version, despite being released in 2009. Stability issues and being the last version of the OS to run Power PC apps would have helped its longevity.
In 2013, Apple moved away from feline nomenclature to being more of the mobile experience of iOS to OS X in Yosemite. Last year, Yosemite added a feature called handoff, which allowed work began on one Apple device to be completed on another.
Yosemite, however, has been criticised for performance issues, chief among them Wi-Fi connectivity. This week we’ve been promised a new OS X focused on performance rather than new features. Will we be seeing the next Snow Leopard?
3) A new iOS
It’s been all of eight months since iOS 8 went to market with a range of updates such as including iBooks as standard, better privacy protection, picture organisation and a healthcare app, Healthbook. With the Internet of Things, quantified self and personal digital assistants becoming more sophisticated we’ll see improvements in all these areas and even Car Play, because someone somewhere must be using it. Let’s not forget the impact of the Apple watch and what changes, if any, it will force on the iPhone, iPad and iPod touch. We won’t get a full ‘download today’ release but a preview that will give us a few months to mull over how our handsets will be changed/improved, if at all.
4) More partnerships
In the same way streaming music and e-book services need partnerships to function, so too do the underused Apple Pay and CarPlay. In the case of the former, a rollout beyond the US would be a start. As for the latter, we need to see brands beyond Audi and BMW treating it as a premium add-on.
5) One more thing
A new line of Mac desktop and laptop computers are a given but one curveball we might see is a revamped Apple TV. A new iOS and streaming service would pave the way for a new streaming box and also give a chance to revise the price point, hopefully, downwards. Given the Apple TV is more a September/October style release, we may be disappointed but it’s the one product line crying out for a bit of attention. Maybe this week will be the time for it to happen.
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