Apple Inc. (NASDAQ:AAPL) is hosting its annual Worldwide Developers Conference (WWDC) next week. Nothing has been confirmed as of yet, but tech pundits are anticipating several things from the Cupertino tech giant.
Tech investors should keep a close eye on news emerging from the conference — it could have a profound impact on companies like Pandora Media Inc (NYSE:P), Google Inc (NASDAQ:GOOG), and of course, Apple itself.
Apple is expected to refresh iOS
iOS is, without a doubt, the single most important product Apple makes. As Steve Jobs once explained, although the company makes its money selling hardware, Apple Inc. (NASDAQ:AAPL) is fundamentally a software company:
An iPod is really just software…and it’s in a beautiful box, but it’s software. If you look at what a Mac is, it’s OS X…if you look at what an iPhone will hopefully be, it’s software.
The vast majority of Apple’s revenue and profit comes from the sale of iPads and iPhones — both of which are really just boxes containing Apple’s true product: iOS. Consequently, any changes to iOS could have a profound impact on Apple.
Jony Ive, famous for the design of Apple’s products, was put in charge of iOS after the departure of Scott Forstall. It’s widely expected that he’s radically changed the appearance of iOS, opting for a flat look similar to Microsoft Corporation (NASDAQ:MSFT)’s Windows 8.
But looks only go so far. Apple Inc. (NASDAQ:AAPL) investors should really keep an eye out for any performance tweaks that might have been made.
As Google’s Android has continued to advance, iOS has received some criticism for staying roughly the same. Android offers a more seamless experience in terms of one app interacting with another, while Android’s hardware partners like Samsung have added their own features (such as multi-window view) to the operating system.
Android is also far more customizable than iOS. While this keeps iOS simpler, users lose out on things like third party keyboards (most notably Nuance Communications Inc. (NASDAQ:NUAN)’s Swype). With Google expected to launch the fifth version of Android sometime soon, Apple investors should be concerned about iOS devotees defecting to newer, high-end Android phones.
An update to iOS that includes some additional features and customizability could go a long way in terms of rebuking any Android challengers.
iRadio could be announced
Various media outlets have reported that Apple Inc. (NASDAQ:AAPL) is planning to unveil its long anticipated streaming music service next week. Unlike Google’s All Access, the service should be closer in functionality to Pandora rather than Spotify.
Shares of Pandora plunged on Monday. Given that so many Pandora users are also iPhone owners, a default radio application built into the iPhone could lead many Pandora users to defect.
If Apple’s iRadio is as planned, expect Pandora shares to fall further. However, if iRadio is delayed, or does not look appealing, Pandora shares will likely recover.
As for Apple itself, iRadio isn’t likely to be a game-changing product, but it is a necessary development. The rise of streaming music services are increasingly pressuring the iTunes music purchasing paradigm, and Apple Inc. (NASDAQ:AAPL) needs to do something to defend its business model.
Could there be a surprise waiting in the wings?
Apple isn’t expected to launch a new product next week. CEO Tim Cook has said that the company’s new products are coming this fall and next year.
But, if investors are looking for a short-term pop in Apple shares, a new product announcement would do it. It’s been over six months since Apple unveiled the iPad Mini, its last major product announcement.
New products would be unexpected, and would definitely generate some positive buzz. Possible products could include a TV, a cheaper iPhone, and the iPhone 5S (or 6).
The importance of Apple’s WWDC
Historically, Apple’s WWDC has brought many major announcements. Past WWDCs have been used to announce Apple’s move to Intel Corporation (NASDAQ:INTC) (2005), the launch of the app store (2008), and the Macbook Pro with Retina display (2012).
This year ought to be no different. Anyone invested in Apple Inc. (NASDAQ:AAPL), or any related tech companies, should keep a close eye on the event.
Joe Kurtz has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple and Google.
The article What to Expect from Apple’s WWDC originally appeared on Fool.com.
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