A slew of analysts weighed in on Apple Inc.’s (NASDAQ:AAPL) Worldwide Developers' Conference (WWDC) on Monday and noted that the software-focused conference didn't include any new hardware announcements, but the company did unveil a bevy of upgrades that will roll out in the coming months across various products. Naturally, some were more impressed than others.
Apple CEO Timothy D. Cook, opened the company’s annual conference for developers in San Jose, California on Monday amid high expectations. In fact, RBC Capital analyst Amit Daryanani raised his price target on Apple to $210 from $203 after attending the conference.
On the other hand, UBS analysts maintained their Buy rating on Apple and US$210 price target.
Apple was up 0.66% to $193.10 in premarket trade.
Progress on AR
Analysts at UBS pointed out that there were no hardware announcements, but good progress on augmented reality (AR).
“The App Store turned Apple into a platform company with substantial developer support. This week marks US$100bn in payments to developers,” UBS analysts Steven Milunovich, and Munjal Shah wrote in a note to clients.
“Apple nixed hardware announcements — no new iPads or Macs — to focus on iOS12 and applications. The event lacked big announcements, but there is progress in augmented reality.”
Apple claims it has the largest AR platform and announced enhancements such as “multi-user support, Measure tool, and a new file format to aid content development.”
“We still don't see the AR killer app, but there is time with AR glasses likely 2-3 years away,” wrote the analysts.
The analysts maintained their Buy rating on Apple and US$210 price target.
Apple was up 0.66% to $193.10 in premarket trade.
Privacy and screen time
Apple says Safari will prevent share buttons and widgets on websites from tracking users without their permission. This announcement comes on the heels of new reports of Facebook sharing user data with technology partners, including Apple. Safari will also block advertisers from collecting characteristics specific to each user's mobile device so they can't identify your device and retarget ads to users.
The analysts said Apple continues to make a statement about privacy, “a potential competitive differentiator.”
Apple will also give users a new app called Screen Time to monitor how long they are spending on specific apps.
“Apple added new protections for user data that can be accessed by applications. Screen Time addresses concerns of consumer advocacy groups. This feature gives consumers a weekly summary of how they use their phones, amount of time spent on each app, and an ability to set time limits for particular apps,” wrote the analysts.
Milunovich, and Shah said the “joke on twitter was that Apple is limiting time on the phone” but now providing more multitasking capability for the Apple watch.
Updates for Siri, group FaceTime, CarPlay
The company's latest iPhone operating system update brings a host of new features. With iOS 12, users will be able to FaceTime with up to 32 people.
“Siri Suggestions allows users to embed Siri into applications. The company is making life tougher for advertising when Siri can stop tracking,” wrote the analysts.
“Group Face Time should be a popular feature for consumers. Adding support for third-party apps such as Waze and Google Maps could increase adoption of CarPlay. Also significant is that Apple takes revenue on Office subs on the Mac, and Apple TV revenue has grown 50%,” they added.
RBC Capital raises price target
Meanwhile, Apple’s price target was raised to $210 at RBC Capital after the WWDC keynote.
RBC Capital analyst Amit Daryanani raised his price target on Apple to $210 from $203 after attending the conference, saying the announcements focused on "small but critical" changes to strengthen the company's ecosystem over the long term.
In a research note to investors, the analyst, who maintained an Outperform rating, said he is increasingly confident that even in a "muted" smartphone unit sales environment, Apple could realize mid-teens EPS growth through gross margin upside from cost downs, NAND tailwinds and yield efficiencies, services growth and capital allocation.
Deutsche Bank less impressed
Meanwhile, Apple “software updates more incremental than game-changing,” says Deutsche Bank analyst Sherri Scribner who was less impressed by what came out of WWDC.
Apple's enhanced security and time-management features are the most meaningful new updates, Scribner tells investors in a research note. She says that with only "modest" software updates announced, her view on the stock remains unchanged. The analyst keeps a Hold rating on Apple.