Apple Inc. (NASDAQ:AAPL) fanatics everywhere have been gearing up for the company’s annual World Wide Developers Conference (WWDC). The conference kicked off yesterday and so far, Apple has revealed Apple Music, the iOS9 update, and the Apple Wallet.
As expected, Apple announced Apple Music, a new music streaming service, with the help of rapper musician, Drake. Apple has teamed up with Beats by Dre, which it acquired in 2014 for $3 billion, to create a subscription based music streaming service to challenge existing streaming services like Spotify and Pandora. Drake described Apple Music as “something that simplifies everything for the modern musician like myself, and the modern consumer like you.”
Apple Music has several unique feature to differentiate itself from other music streaming services. For example, Apple Music allows users to stream music and videos, follow different artists via ‘Connect’, listen to a variety of programmed playlists, and has a 24/7 worldwide radio station (Beats One)—all on one application. Apple Music is slated to launch on June 30 for $9.99 a month or $14.99 for a family plan. To entice customers to use Apple Music, the company will offer a three-month free trial of the service. Apple Music is expected to increase the company’s declining iTunes revenue as streaming audio music gains popularity.
Beats co-founder Jimmy Iovine said of Apple Music, “2015, music industry is a fragmented mess. Do you wanna stream music? You can go over here. If you wanna stream video, you can check some of these places out. If you wanna follow some artists, there’s more confusions with that.” With Apple Music, you have “All the ways you love music, all in one place, and that place is in almost a billion hands all around the world already: one single app on your iPhone.”
In addition to Apple Music, Apple’s keynote addressed provided a preview of the updates that will be incorporated into iOS9 for iPhone and iPad. Apple’s intention with the iOS9 update was to make easier user experience with more guidance. Some of the new features of iOS 9 include transit directions in Maps, a new low power mode to help save battery life, a new News app designed display news related to your interests, and new updates to HealthKit and HomeKit, just to name a few. The iOS 9 beta update will be available for developers in July and the final version will be available to the public in the fall.
Apple also announced the next step for Apple Pay, called Apple Wallet. Apple Wallet, which will formally replace Passbook, now allows users to add store cards, loyalty cards, and reward cards. Apple Pay will also be made available in the United Kingdom starting next month.
A handful of analysts weighed in on Apple following the first day of WWDC.
Piper Jaffray analyst Gene Munster maintained an Overweight rating on Apple with a price target of $162 on June 8. Though Munster did not think Apple made any “blockbuster announcement[s],” he does think “the combination of many incremental product innovations to iOS, Apple Pay and Apple Music add up to a better user experience,” which he believes “will allow Apple to continue to gain share in the high-end smartphone market, PC market and wearables market.” To Munster, “this translates into increased confidence that Apple can meet Street growth rates for the next year plus” and he expects “shares of AAPL to move higher as investors increasingly think about the company as an annuity hardware business.”
Overall, Munster has a 70% success rate recommending stocks and a +26.8% average return per recommendation.
Similarly on June 8, FBR Capital analyst Daniel Ives maintained an Outperform rating on Apple, but did not provide a price target, according to Smarter Analyst. Ives believes the announcement of Apple Music stole the show on the first day of the conference. He views “streaming music as the tip of the iceberg for Apple, as the company ultimately embarks further down the software/streaming services path over the coming years helping to expand its massive market opportunity.” Ives added, “Apple’s next-generation product ideas appear poised to further expand its consumer tentacles over the coming years with the right products at the right time to execute as a leader in the devices and services space.”
Daniel Ives currently has an overall success rate of 68% recommending stocks and a +10.4% average return per recommendation.
On average, the top analyst consensus for Apple on TipRanks is Moderate Buy.