Apple Inc. Sets the Stage for a Huge Second Half at Its WWDC

Apple unveiled a host of new products and updates in its World Wide Developers Conference keynote address earlier this week, but did they live up to the considerable hype?

Jun 7, 2014 at 4:30PM

Although Apple's (NASDAQ:AAPL) World Wide Developers Conference has now come and gone, it's ripple effect is sure to be felt throughout the rest of 2014 and beyond for the tech giant's investors.

Expectations were sky high going into Apple's WWDC, and maybe even a tad bit overblown. All told, Apple rolled out several significant advancements to its software and

Apple Continuity App Icon

Source: Apple

ecosystem, while also introducing new applications that strongly speak to Apple's upcoming growth priorities in the months ahead.

So while Wall Street might have wanted some kind of hardware introduction, Apple addressed plenty key opportunities in one fell swoop with this week's WWDC

Bolstered its Mac and iOS software
Of the many new features and services Apple rolled out at WWDC, one may end up having the biggest effect its its Handoff feature. Historically, Apple's cloud offerings have been a near joke (think: MobileMe), but Apple's new iOS and OS X Yosemite will lean heavily on cloud services to drive one of the more exciting new features in OS X: Handoff.

Handoff is effectively Apple's answer to the spate of hugely successful cloud storage services that have arisen in the past several year like Box and DropBox to name only two. Handoff allows an enabled user's OS X-powered Mac, for instance, to recognize what a linked user is doing on his or her iPhone or iPad and sync that activity to across all Handoff-enabled devices. This means gone are the days of having to email documents back and forth to various devices or having progress in an in-app game lag between devices. With Handoff, Apple is betting big that it can keep your digital life in sync across all of a users Apple devices, a clear win for users.

Handoff is just one of several features contained within a software theme it described repeatedly during WWDC as "continuity." In practice, this just means Apple's finally integrated an actually serviceable cloud offering into its operating systems, which is also accompanied by a planned price reduction for iCloud services next year as well. Although potentially late to the game and just playing catch-up, Apple finally getting the cloud right is an obvious win for the strength of its overall ecosystem.

Primed to innovate again
Beyond simply improving its existing software and services, Apple also used part of WWDC to lay the foundation for more innovations later this year, specifically the introduction of an advanced iWatch.

Apple gave users and investors a first look at the Health app and HealthKit developer tool

Health Hero

Source: Apple

  that will integrate with the iWatch. From what we can tell from the initial demo, Apple intends for Health to become the one-stop source for all medical data for Apple users in the future. Health will attempt to pull data across various areas of wellness, such as fitness, sleep, medications, and nutrition to revolutionize the way we receive our medical care. It's a lofty goal, one that Apple's probably particularly well suited to pull off.

A more general observation about Apple is that it prefers to compete by creating new markets instead of competing within them. With both the iPhone and iPad, Apple's greatest contribution to these markets was its effectively creating them each, at least in a mass-market sense. Fast forward to today, and Apple has become a minority player in terms of shipments within each of these markets, albeit a hugely important one. The point being is that Apple at its best is busy creating new markets, like the upcoming iWatch, as its growth strategy instead of vying for market share through more tawdry tactics such as competing on price for instance.

I believe we're seeing the same scenario slowly play out with Apple and wearables, and Health is just the first manifestation that Apple will revolutionize wearable computing in the months ahead. According to recent reports, Apple is planning to build between 3 and 5 million iWatch units per months, a number that would put its first 12 months of iPad shipments to shame for context. 

So as Apple's WWDC fades in the rearview mirror, investors need to understand that Apple has undoubtedly set the stage for a massive second half of the year. To me, the evidence is overwhelming. Apple indeed has big things in store in the months ahead.

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Andrew Tonner owns shares of Apple. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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