All eyes will be on Apple as it kicks off its Worldwide Developer Conference in San Francisco today. Although iOS is no longer the world’s top mobile operating system, it is still perhaps the most closely watched when it comes to innovation and design.
While much to the talk surrounding iOS 7 has focused on Jonathan Ive, Apple’s new senior vice president of industrial design, some analysts will be paying much more attention to new OS features and functions than to design. That’s because iOS could be the key to helping Apple leverage new business models, something it will need to do in order to maintain anything close to the cash flows its shareholders have become accustomed to during recent years. Apple may have already sold iPhones to a large portion of the smartphone’s addressable market: those willing to pay for a device that has the status and simplicity of an iPhone, even though competitors may actually do more and cost less. The iPad probably has more growing room, but it also faces a host of powerful low-cost competitors.
It is not reasonable to expect the pace of ‘iDevice’ upgrades to approach the recent pace of initial sales, so Apple needs to turn its attention to monetizing its customers in other ways. That’s where a new OS could have a big impact. Anything designed to increase traffic to the iTunes store serves to help Apple realize more potential profit from each iPhone user. Features like a mobile wallet and ad-supported music are also possible iOS 7 additions that could encourage iPhone and iPad users to spend more with Apple, and to stick with ‘iDevices’ when it comes time to upgrade.
Today’s Mobile Minute:
Apple starts its Worldwide Developers Conference today in San Francisco at 10am Pacific time. The company is expected to launch an updated version of its iOS operating system, but a new iPhone to run that OS is not expected until later this year. Apple is also rumored to be planning a new streaming music service that would be ad-supported, similar to Pandora. If true, this would represent a new business model for Apple, which has enjoyed great success as both a hardware and software company, but has not yet tried to be a media company.
In other mobile news, AT&T is making customers wait longer to upgrade their phones. The nation’s second largest carrier says customers will now have to wait until their 2 year contracts are up before they can get a new a phone at a subsidized rate; previously customers just had to wait 20 months. AT&T says it will still offer partial discounts on subsidized phones to people who have completed six months of a two year contract.
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