What Everyone Missed About Apple WWDC
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Apple WWDC
Similar to last year, AAPL gave another dud at their Worldwide Developer Conference. Investors are anxiously awaiting AI features that will carry Apple devices to the next generation, but this announcement was not it. Compared to Google’s I/O Conference that was exploding with AI launches, the iPhone company still has no idea how to market and monetize AI.
This comes at a time when polls are finding only 17% of global respondents expecting to buy an iPhone over the next year, the lowest reading in a decade.
Apple’s lead engineer Craig Federighi acknowledged that recent AI promises for Siri and other features have not materialized. Federighi stated that “the work needed more time to reach our high quality bar”. A rare (and refreshingly candid) public admission!
The stock sold off precipitously on the event, and even more in the days after. There is a building perception amongst investors that Apple is years behind the state-of-the-art in AI.
The headline feature of WWDC was “Liquid Glass”, a new design theme that essentially looks like there’s a layer of glass on your apps. It's a translucent look that refracts the image behind it (see example below). It's not your usual background blur; it looks like real glass that bends and reflects color in realtime.
Internet trolls have been meme-ing on it, and it's understandably disappointing at first blush, but there's a subtle point that everyone’s missing. Not only is this a realistic effect, it is a technical feat that requires graphical computations and your GPU to process. It’s the same tech that video games use to render realism in light and water.
The only way to achieve this effect is to control the whole stack (hardware and software). It needs a custom-designed M-chip CPU, GPU, and iOS operating system working together to create this effect without lag or performance hits elsewhere. It is not trivial for competitors to copy and helps Apple stand out from the rest.
Apple has always been better at design than cloud services or AI. A refocus on its core competencies is positive for the company, and the subtle nod to tightly integrated hardware/software experiences portends good things to come in future announcements. Some may find this WWDC underwhelming, and it was, but it’s a necessary step for Apple to reset and refocus on delivering what has historically made its products great.
What drives Apple sales is recognizable, unified design language. iPhones and Macbooks are uniquely recognizable for their rounded edges and curved corners (they even have a name for it — squircles). Design takes precedent over features, which often lag Android releases by years. Our guess is that its userbase cares more about the glass aesthetic than an AI-powered Siri.
AAPL stock has had a tough sledding for the last few months, and while this announcement isn't going to immediately jumpstart the stock, it should help cement the company's competitive advantage of making desirable, recognizable products. The AI stuff will come in due course.
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