Bloomberg News

Apple Adds Software Features to Stay Ahead of Google in Apps

June 11, 2012

Apple CEO Tim Cook

Tim Cook, chief executive officer of Apple Inc., speaks at the Apple Worldwide Developers Conference in San Francisco, California, U.S. Photographer: David Paul Morris/Bloomberg

Apple Inc. (AAPL:US) unveiled the next version of its mobile software, adding maps and integration with Facebook Inc. (FB:US) to ratchet up pressure on Google Inc. (GOOG:US) in the market for handheld devices and online applications.

Apple’s iOS 6 will have more than 200 new features, including turn-by-turn map navigation and tools to make it easier to access Facebook from iPhones and iPads, Cupertino, California-based Apple said today. The company also upgraded its MacBook computers, adding faster chips and sharper displays to the high-end Pro model months before competing devices with Microsoft Corp. (MSFT:US)’s Windows arrive in stores.

Chief Executive Officer Tim Cook is using new software, unveiled at the company’s annual Worldwide Developers Conference, to widen Apple’s user base and woo developers who can add to a store that has more than 650,000 downloadable games, magazines and productivity tools. The new mapping service, which replaces Google Maps, and new voice-recognition tools that make it easier to bypass traditional search engines, reflect Apple’s efforts to diminish Google on its devices.

“The rift between Google and Apple couldn’t be clearer than it was today,” said Gene Munster, an analyst with Piper Jaffray Cos. “They just keep raising the temperature.”

The rivalry has grown as Google puts its software on machines made by Samsung Electronics Co. (005930) and other electronics companies to challenge the iPhone and iPad.

Facebook Integration

Smartphones running Google’s Android operating system combined accounted for 56 percent of global sales in the first three months of the year, compared with 23 percent for the iPhone, according to Gartner Inc. The iPhone is the best-selling smartphone.

Apple announced today that it’s working more closely with Facebook, another big rival to Google. The new features make it easier for iPhone and iPad users to post pictures and other content to the social network. Apple also is adding Facebook “like” buttons to the App Store and iTunes. Google introduced its own Facebook competitor, Google+, this year.

Apple is also adding Baidu Inc. (BIDU:US)’s search engine as an alternative to Google for iPhone, iPad and Mac users in the world’s most populous country. In another move to appeal to Chinese users, Apple is updating its voice-recognition service Siri to work for Mandarin and Cantonese speakers.

Strengthening Siri

Apple announced several other changes to Siri. The company is making the service available for iPad users and added the ability use voice commands to search for sports scores and make reservations through OpenTable Inc. (OPEN:US)’s service. Apple said that it’s working with carmakers, including Bayerische Motoren Werke AG (BMW), General Motors Co. (GM:US), Honda Motor Co. and Toyota Motor Corp. (7203), to add a button to car steering wheels to quickly activate Siri.

Another new feature is called Passbook, an application that organizes electronic gift cards, boarding passes or movie tickets. The feature could eventually include credit-card data and may mark an early step toward wireless payments for iPhone, said Ross Rubin, an analyst at NPD Group.

Apple has more than 400 million credit cards on file via iTunes and the App Store.

The mobile software upgrades will be part of Apple’s next iPhone, which analysts including Munster have predicted will be released by October. The iPhone is Apple’s best-selling product, accounting for 58 percent of its revenue (AAPL:US) last quarter.

Mountain Lion

Apple also showed off its upcoming Mountain Lion operating system for the Mac, which will be released next month for $19.99. The software includes many features from the iPhone and iPad, including a notification system so text messages sent to an iPhone or iPad will show up on the Mac as well.

The changes to the mobile and Mac software underscore a broader push by Apple to make its products work more seamlessly together, encouraging customers to purchase multiple devices. Users can safeguard documents and files on Apple’s iCloud storage service and access them from whichever machine.

That fosters “stickiness” so that users won’t want to switch to another product because of all the time and effort they have invested with Apple’s gadgets, said Chris Jones, an analyst at market researcher Canalys.

Today’s event highlighted the difficulty Apple has keeping new product details secret. Many of the biggest announcements from the day had leaked out in the weeks leading up to the developer conference.

MacBook Revisions

Case in point: an updated MacBook Pro. Apple is tweaking its laptops as other computer makers such as Hewlett-Packard Co. (HPQ:US) prepare machines that feature the new version of Microsoft’s Windows this year. Apple introduced a thinner, lighter MacBook Pro that boasts high-definition screens and sells for at least $2,199. It starts shipping today, Apple said. The MacBook Pros feature more powerful chips from Intel Corp. (INTC:US), graphics capabilities from Nvidia Corp. (NVDA:US) and an HDMI port for playing videos to TVs.

The MacBook Pro will boast 7 hours of battery life and as much as 768 gigabytes of flash memory, Apple said. The company updated the existing line of MacBook Pros, which will also boast faster chips. These will sell for $1,199 to $2,199.

New MacBook Airs -- which are thinner and less pricey than Pros -- will sell for $999 to $1,499, Apple said today.

“While they’re not dramatic new hardware, these were important improvements to make for Apple to be ahead of the competition,” said Walter Piecyk, an analyst with BTIG LLC in New York. “These incremental improvements are going to further integrate the Apple experience into the user’s life.”

Facebook Apps

The event kicked off Apple’s weeklong conference for developers who make the software that populates its App Store. More than 30 billion apps have been downloaded from Apple digital store, and developers have received $5 billion from the sales, Apple said today. Apple keeps 30 percent of the revenue raised from app-store sales and developers get the rest.

The success of Apple’s App Store has helped create a market for applications that will reach $58 billion in 2014, according to Gartner Inc.

“The products we make, combined with the apps you create, can fundamentally change the world,” Cook said.

Fellow technology companies also are trying to lure the developers. Even as Apple works more closely with Facebook, it will also compete with the owner of the world’s most popular social network in sales of apps.

Facebook opened an online bazaar last week. Google’s store has more than 500,000 apps, while Microsoft has lined up design firms, recruited interns and sent engineers on an around-the- world road show to line the shelves of its app store. Google hosts its own developers conference in San Francisco June 27-29.

This is Apple’s first developer conference since co-founder Steve Jobs died in October. Last year’s event, where he introduced Apple’s iCloud service, was the last Apple event he led. Jobs had used previous conferences to introduce such products as earlier iPhone models.

To contact the reporter on this story: Adam Satariano in San Francisco at asatariano1@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

Tim Cook, chief executive officer of Apple Inc., speaks at the Apple Worldwide Developers Conference in San Francisco, California, U.S. Photographer: David Paul Morris/Bloomberg Phil Schiller, senior vice president worldwide marketing of Apple Inc., with the new MacBook Pro laptop computer during the Apple Worldwide Developers Conference in San Francisco on June 11, 2012. Photographer: David Paul Morris/Bloomberg June 11 (Bloomberg) -- Tim Cook, chief executive officer of Apple Inc., speaks about the company's App Store and work with software developers. Cook, speaking at Apple's annual Worldwide Developers Conference in San Francisco, said the company has paid developers $5 billion, sharing a portion of the revenue raised from 30 billion application downloads from its online store. (This is an excerpt. Source: Bloomberg) June 11 (Bloomberg) -- Brian Blair, an analyst at Wedge Partners Corp., talks about Apple Inc.'s changes to its MacBook computers and its mobile software. He speaks with Jon Erlichman at Apple's Worldwide Developers Conference in San Francisco on Bloomberg Television's "Bloomberg West." (Source: Bloomberg) June 11 (Bloomberg) -- Tim Cook, chief executive officer of Apple Inc., Phil Schiller, senior vice president of product marketing, Craig Federighi, senior vice president of software engineering, and Scott Forstall, senior vice president for iPhone software speak about the company's relationship with third-party software applications developers, Apple's latest products and the company's outlook. They speak at Apple's annual Worldwide Developers Conference in San Francisco. (This report is an excerpt. Source: Bloomberg) June 11 (Bloomberg) -- Shaw Wu, an analyst at Sterne Agee Leach Inc., talks about the next version of Apple Inc.'s mobile software and MacBook computers, and the outlook for the company's share price and China strategy. Apple's iOS 6 will have more than 200 new features, including turn-by-turn navigation and tools that make it easier to access Facebook Inc's social networking site from iPhones and iPads. The company unveiled the new software and computers at its annual Worldwide Developers Conference. Wu speaks with Pimm Fox on Bloomberg Television's "Taking Stock." (Source: Bloomberg) June 11 (Bloomberg) -- Brian White, an analyst with Topeka Capital Markets, talks about Apple Inc.'s World Wide Developers Conference and outlook for company's new products. White speaks with Betty Liu and Sheila Dharmarajan on Television's "In the Loop." (Source: Bloomberg) June 11 (Bloomberg) -- Scott Sutherland, an analyst at Wedbush Securities Inc., talks about Apple Inc.'s World Wide Developers Conference, the outlook for the company's shares and its products. Sutherland speaks with Scarlet Fu on Bloomberg Television's "InBusiness." (Source: Bloomberg)

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Companies Mentioned

  • AAPL
    (Apple Inc)
    • $100.96 USD
    • -0.83
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  • FB
    (Facebook Inc)
    • $77.91 USD
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