After Apple Inc. WWDC Analysts Looking Toward iPhone 7

After Apple Inc. WWDC Analysts Looking Toward iPhone 7
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Apple’s Worldwide Developers Conference (WWDC) got underway on Monday, and analysts are weighing in on what the iPhone maker unveiled during its keynote speech. The general consensus is that the company is taking great strides to strengthen its ecosystem even further. As expected, Siri was the star of the show, playing a big role in iOS 10.

Analysts praise Apple’s iMessage update

One big part of iOS 10 is updates to iMessage, which got full-screen animations and invisible ink that keeps a message invisible until the person who receives it actually swipes over it. BMO Capital Markets analyst Tim Long highlighted the new iMessage features as especially important because of the increasing competition in the messaging space. Apple is also adding a messaging app store to integrate third-party content and services, and the company focused on setting iMessage apart from Google in privacy and encryption.

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He was also impressed with the updates to watchOS and tvOS that were announced at WWDC as Apple addressed some important issues. For the Apple Watch, the company reconfigured part of the interface, while for the Apple TV, the company added a single sign-on feature that can be used for multiple apps. Management also focused on making the set-top box a home hub, and Long believes the new Home app will speed up usage of the box.

iOS 10 brings updates for Siri

As had been widely expected before WWDC even began, Siri was the star of the show as Apple added its digital assistant to the renamed macOS, enabling users to search documents in addition to the web and apps. Credit Suisse analyst Kulbinder Garcha and team believe all the new updates strengthen what they already saw as a “superior ecosystem.” They also like that Apple has been able to innovate across platforms, and they see the new features as not only improving the company’s compute platform but also bringing consistency to all of its product lines.

Deep learning was also a key part of the WWDC keynote speech as it is the basis for making Siri more intelligent. Deutsche Bank analyst Sherri Scribner noted that Siri’s algorithms, quicktype features, and photos also received some key updates. Further, she likes the redesign of Apple Music. Overall, she said the WWDC keynote speech was about as expected, and she believes that the focus on machine learning was incremental for Apple because the company hasn’t emphasized it in the past. However, she added that there wasn’t anything she felt to be “incremental enough” to impact Apple stock.

Still looking toward Apple’s iPhone 7

Before WWDC began, Goldman Sachs released analysis of what happens to Apple stock before and after the event each year and found that it usually is pretty unkind to the stock. Citi analyst Jim Suva noted after Monday’s keynote that the event is a software-focused one, and as such, he doesn’t expect much of a reaction in Apple’s stock price.

In fact, he expects the shares to remain range-bound because data points suggest that the summer will be slow as usual. He also continues to look toward the iPhone 7. He notes that expectations for the iPhone 7 look muted as the consensus for units in the December quarter is only 74 million, representing a 1% year over year decline.

However, he also believes the iPhone maker can still gain share, especially in big markets like India. Unlike some investors who have questioned whether Apple will go the way of BlackBerry, he believes that the company still has a strong future. He expects the iPhone installed base to keep growing and points out that this metric was a “leading indicator for past examples of consumer electronic peak to fail turning points.”

Apple shares edged higher by as much as 0.09% to $97.42 during regular trading hours on Tuesday.

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