Loup Ventures

About the Author Loup Ventures

At Loup Ventures, research is in our blood. The spirit of our team has always lived on the curiosity to discover new insights that yield investment opportunities. For years we did this on Wall Street, focused on public tech companies. Now we invest in private frontier tech companies, but public companies like Tesla, Nvidia, and others are also meaningful innovators in frontier tech. These public companies are shaping the emergence of AI, robotics, autonomous vehicles, and AR/VR just as much as early stage startups. As a result, we’ve always kept a watchful eye on public market participants to inform our private investment strategy. Gene Munster is a managing partner and co-founder at Loup Ventures. Prior to Loup Ventures, Gene was a managing director and senior research analyst at Piper Jaffray where he covered technology companies including Apple, Amazon, Google and Facebook. During his 21-year tenure, Gene received many acknowledgements including: Top Stock Picker from Forbes, Best on the Street from The Wall Street Journal, and was widely recognized for his work on Apple. Gene holds a bachelor’s degree in finance and entrepreneurship from University of St. Thomas.

Gene Munster’s Take on Apple (AAPL) WWDC 2019


By Gene Munster

At WWDC 2019, each of Apple’s software platforms — iOS, macOS, watchOS, tvOS, and now iPadOS — took a step forward, focusing on continuity and privacy. But all of this starts with the developer. The company is making life easier for developers to build apps across the Apple ecosystem with continuity that makes life better for users. Our takeaways:

WWDC typically either covers a broad range of topics or goes deep on select few topics. This year it was both, highlighted by the following themes:

  • It’s just private – Apple is in a position to deliver privacy like no other tech company.
  • Making life easier for developers – Apple is making it easier for developers to build apps with SwiftUI and Catalyst, which ultimately benefits users with more, better, and easier to use apps.
  • Apple Watch becomes more independent and useful – Standalone watchOS apps and a Watch-based App Store will make Apple Watch more useful.

It’s Just Private

Privacy is one of the tent pole features that extends across all Apple platforms and is an important identifier of the brand. Apple’s business model gives them the luxury of not selling customer data. Their ownership of hardware + software + services allows them to deliver privacy in ways that other tech companies can’t. Apple is bringing the “it just works” user experience approach to privacy — “it’s just private.”

Consumers want privacy. However, our research suggests they don’t want to put effort into improving their privacy. In fact, in a survey of 500 Facebook users, we asked, “how much time would you spend managing privacy settings if given better control?” 40% of users responded, “I would not spend any time,” and 85% of users would spend no more than 15 minutes. In other words, people just want it private, and Apple is in a unique position to deliver on that.

For example, HomeKit Secure Video will analyze home security camera footage on an Apple device in your home (e.g., HomePod or Apple TV) instead of sending it to the cloud. Sign in With Apple offers an alternative to the option of signing in with Facebook or Google and will allow greater control over what data users share with online services. Apple will actually create a fake email address in place of sharing your own. These features are only possible inside of a tightly integrated ecosystem as they leverage households with multiple Apple devices, a developer network, on-device hardware capabilities like FaceID, the Secure Enclave, and more. New privacy features are exposing another hidden advantage of the Apple ecosystem.

Making Life Easier for Developers

We conducted a small (30 developers) “buzz” survey at WWDC, asking a simple question: “What was the most significant announcement from today’s keynote?” SwiftUI was the answer for 70% of respondents, with the remaining 30% split among privacy, dark mode, Mac Pro, Catalyst, and iPadOS. Notably, none of the 30 respondents mentioned ARKit 3.0. SwiftUI was the consensus pick based on the belief that it will simplify and speed up the app development process. The concept is not new. Google already has a similar tool called Flutter, but it is new to Apple. Bottom line: developers crave tools that make their lives easier.

The company also announced Catalyst, which allows developers to build once and deploy across multiple Apple platforms. This increases the return on investment for developers to build for Apple, given they can quickly port apps to iOS, macOS, iPadOS, and watchOS.

Apple Watch Becomes More Independent and Useful

The use cases for the Watch have long been debated, due in part to consumers not being aware of the available watchOS apps. There were two announcements related to this today: The ability to access the App Store directly on Apple Watch, and standalone Watch apps that do not require an iOS companion app. These changes should increase consumer awareness of watchOS apps and drive developers to create more and better Watch apps. As Apple Watch becomes more useful over time, this should have the effect of increasing demand for Apple Watch, which now accounts for about 5% of revenue.

Disclaimer: We actively write about the themes in which we invest or may invest: virtual reality, augmented reality, artificial intelligence, and robotics. From time to time, we may write about companies that are in our portfolio. As managers of the portfolio, we may earn carried interest, management fees or other compensation from such portfolio. 

 

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