WWDC Will Offer First Hints at Apple's 'Year of Innovation'

Analyst Brian White says Apple's "year of innovation" begins in September; at  WWDC in June, expect cloaked clues about all that's to come.

Apple hasn't introduced a new product category since the iPad in 2010, and its last event was seven months ago. But for investors and fans who have grown ornery over the current pace of innovation at Apple, relief may be just a few calendar pages away.

Investment firm Cantor Fitzgerald expects Apple to use its 2014 Worldwide Developers Conference (WWDC) to begin moving toward what the firm has dubbed Apple's "year of innovation."

This fall, Apple will introduce two iPhones with seriously larger displays (more on that in a moment) as well as a smartwatch, says the firm.

During the WWDC opening keynote June 2, the introduction of a refreshed iMac or MacBook is a "reasonable" expectation, Cantor analyst Brian White wrote in a May 27 research note. But he fully expects an introduction to iOS 8. While iOS 7 was an aesthetic overhaul, iOS 8 will expand the use cases and experiences available to iOS devices. Very likely, these will include the smart home controlling features that the Financial Times reported on May 26 and that White has been anticipating for more than a year.

After an April 2013 trip to China, White, then with Topeka Capital, told investors that Apple was developing an "iWatch" that would provide "increased mobility around the home, supplanting the need to carry a smartphone around the house."

In the same 2013 research note, White had mentioned an "iTV" and an "iRing."

The ring, he told eWEEK during a May 28 call, came from research the firm had gathered, while the iTV—which there was no mention of in White's May 27 report—was problematic in regard to content.

"It's not hardware issues," White explained. "It's the relationships with content and cable providers."

Regarding the iWatch, White said that he has always expected that anything worn on the wrist would include features related to tracking a user's health—and certainly many of Apple's recent hires make clear that health- or fitness-focused features are coming. So the surprise of the 2013 trip, said White, was the talk of home-automation features.

"Controlling the TV and lights, controlling video, everything in the home," said White. "I'd never heard anyone talk about that before."

But again, in the lead-up to hardware coming in the fall, expect the hand that Apple shows off in June to be subtle.

"I'm looking for them to talk about more of the software and features," White said of WWDC, "and it will be up to observers to draw from those features what kind of products belong to them. Last year they put up a slide that turned out to be CarPlay."

No Maybe Around Larger iPhones

Apple, to sustain its growth, needs China, and what Chinese consumers want are larger iPhones.

"In China, if you don't have a big phone, you're not even part of the game," said White. "Everyone has big phones. The iPhone sticks out like a sore thumb" because of its smaller display.

During an April 2014 Asia trip, White says he spoke with people, with his contacts, with everyone, and it was "pretty overwhelming that people want to buy this bigger iPhone," he said. "They'd used other brands, and they weren't happy with the quality. The only thing keeping them away from Apple is the size."

White added, "Apple's brand in China is unmatched—everyone aspires to it."

But that doesn't mean Apple can be all things to all people. As an aspirational item, it would ruin the allure of the product for some if Apple were to offer a less-expensive, even a high-quality one that other classes of people could acquire.

"There are people who buy it because others can't. If you're in Beijing and someone in a fourth- or fifth-tier city can also buy it, that's a major turnoff," White explained.

"It's really amazing, though," he added. "People find a way to afford Apple. iPhones are even more expensive there than they are here—there are duties, and mark-ups. But people find a way."

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