Gene Munster: AR Demo At WWDC Was A 'Big Deal'

Gene Munster: AR Demo At WWDC Was A 'Big Deal'
June 9, 2017

Apple (AAPL) announced plenty of news at its annual World Wide Developers Conference on Monday. 


While many of the announcements were expected, top Apple analyst and Loup Ventures founder Gene Munster said he was particularly impressed by Apple's augmented reality demo. The quality of the experience demonstrated makes Apple an overnight leader in the space, he said. In addition, Munster said he was impressed with the audio quality of Apple's new home speaker, the HomePod. 


He was let down, however, by a lack of new features for voice assistant Siri, as well as by Apple not opening Siri up to developers, as was expected. Last year, Apple opened Siri up to certain developers, such as Uber and Pinterest. 


Here's Munster's takes on Apple's biggest announcements of the day:


1. ARKit

Apple going head-to-head against @facebook @Snapchat @Microsoftwith #ARKit and QR Codes. Let the cameraOS war begin! #ar #vr#WWDC17 #wwdc

— Ric Ferrer (@ricferrer) June 5, 2017


Apple announced a new augmented reality platform called ARKit, which is included in the new iOS 11 for the iPhone and iPad. The new tool will allow developers to use the built-in camera, processors and motion sensors in the two devices to design AR experiences. Possibilities include interactive gaming, immersive shopping and industrial design. In addition, the latest macOS, High Sierra, will support virtual reality. 


"This is a big deal," Munster said. "AR will be the OS of the future, and what Apple showed today is light years ahead of anything shown previously." 


Apple seems to have leaped over Facebook (FB) and Alphabet's (GOOGL) Google overnight in the AR space, according to Munster. Google has its Tango AR platform and its Google Lens, which allows users to bring up information on an object by pointing their camera at it. In April, at its F8 developers conference, Facebook announced its open AR platform that lets outsiders design filters for its cameras. 


Munster noted that the AR announcement was more extensive than he was expecting and the quality of the demo was better than he anticipated. In addition, Apple's huge user base means that millions of iPhone users will soon have access to an AR platform. 


2. HomePod Smart Speakers

No surprise here as Apple was widely expected to release its own version of theAmazon (AMZN) Echo and Google Home. Apple focused on the quality of the speaker and on its Apple Music integration, seeming to market it as a music-first speaker. 


While Apple may have positioned it as different from the Amazon Echo and Google Home, that doesn't change the facts, Munster said. "Apple didn't want a 'me too' product," he said. "But at the end of the day, it's the same thing." However, the quality of the music experience did seem to differentiate it. "It's hard to believe the quality coming from such a small object," he said. 


The device is seven inches tall, features six microphones and has no touchscreen. The company's voice assistant, Siri, is integrated into the speaker and can be used to control HomeKit, providing news and sports updates, settings reminders and more. 


Apple emphasized the security of the system, saying it doesn't hear anything you're saying until you activate it by saying, "Hey, Siri." While privacy isn't hugely important yet, it does make the everyday customer more comfortable to with HomePod, Munster said. 


The HomePod is also expensive at $349, compared to the $179.99 Amazon Echo and the $129 Google Home (on sale now for $109). Munster said Apple will be able to sell a number of the HomePods next year when the devices become available because a large base of its users have been waiting for a smart speaker product. However, down the road, Apple will need to come down to the $150 price range.


3. Peer-to-peer payments for Apple Pay


Person-to-person Pay coming to Apple Pay. No more, "Ill pay you back later." #WWDC2017

— Lance Ulanoff (@LanceUlanoff) June 5, 2017


Apple decided to take on popular peer-to-peer payment app Venmo, owned by PayPal (PYPL) , by introducing a new feature in iOS 11 called Pay Cash Competitors here include Square (SQ) Cash, PayPal (PYPL) and Facebook. 


This was a necessary update because it will soon be an expected feature on phones, Munster said. "It's a punch in the gut to Venmo," he added. 


4. Amazon Prime Video finally available on AppleTV


You asked (a lot). We listened. Amazon Prime Video is coming to the TV App and all Apple TVs this year.

— Amazon Video (@AmazonVideo) June 5, 2017


Apple announced that Amazon's video app will at long last be available on Apple TV later this year. Previously, Amazon CEO Jeff Bezos had said the two companies couldn't find "acceptable business terms," according to Amazon stopped selling the Apple TV in 2015 because it felt that its video content wasn't being fairly promoted on the service. 


This update was small amidst the other announcements made today, but it creates a "meaningful problem" for Amazon competitor Netflix (NFLX) , Munster noted. 


5. MacOS update and a refresh to the Mac lineup


#Apple's reveals new Mac operating system #HighSierra and Macs get a refresh.

- IApplePro (@IApplePro_) June 5, 2017


Apple announced a refreshed macOS, called High Sierra that includes a number of improvements, such as blocking auto-play videos and an updated Safari browser that makes it the fastest desktop browser in the world. The new OS will arrive this fall, as per usual.


In addition, iMacs got a refresh, including better displays and Kaby Lake CPUs fromIntel (INTC. The 12-inch MacBook and MacBook Pro models also got Intel Kaby Lake CPUs. The most expensive update is for the iMac Pro, which will arrive this December starting at $4,999.


The updates aren't a huge deal for Apple because they're only a small part of its business at this point, Munster said, but Apple keeps updating them every once in a while just to stay relevant. In the latest quarters, Mac sales accounted for only 14% of Apple's total revenue.

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