Everything We Know About Apple WWDC 2017

apple stockApple WWDC 2017 Could Be Huge

Doubt the power of an Apple Inc. (NASDAQ:AAPL) conference at your own peril. The fervent support of Apple-lovers is a singular phenomenon in the tech world, nearly unrivaled by devotees to any other brand. Remember the power that the late Steve Jobs used to wield with nothing more than a speech, a black sweater, a big screen, and a room full of eager techies.

With all the “iPhone 8” rumors floating about, alongside Apple’s usual slate of updates, the Apple Worldwide Developer Conference (WWDC), June 5 to 9, will be days that tech bulls will want to mark on their calendars. That week may result in a huge impact on the AAPL stock price.

The Apple WWDC is an annual conference held in California. The purpose is to show off new tech gadgets, software, and anything else that Apple might have coming down the pipe to software developers. Held this year in San Jose, the conference will be sure to send the tech world abuzz when it kicks off later in the summer. And this year, there may be more reason than usual to get excited about the WWDC.

Last year saw some pretty big moves among some of Apple’s core products, though perhaps not to the level we expect from the tech innovator. These included the porting of “Siri” to desktop, “Apple Pay” becoming accessible through the web, the renaming of the Apple operating system, and a whole slew of other incremental changes amounting to an improvement of services, but nothing that blew investors away, as evidenced by the Apple stock chart below. (Source: “The 13 biggest announcements from Apple WWDC 2016,” The Verge, June 13, 2016.)

Apple Stock from WWDC 2016 to One Month After
Apple stock price
Chart courtesy of StockCharts.com

Right now, the expected announcements include the “iOS 11,” “watchOS 4,” “macOS 10.13,” and possibly “tvOS 11.” While any one of those could contain a game-changing feature, they are more likely to instead focus on updates to the current software. Though you never know what to expect from Apple, and these software upgrades could be significant enough to boost the AAPL stock price.

Some of these potential big updates include a social networking app focused on providing users with an outlet to share videos. The app will reportedly allow users to record video, make edits, and share the end product with their friends. (Source: “Apple Weighs iPhone Video Editing App in Renewed Push on Social,” Bloomberg, August 25, 2016.)

While it’s no guarantee that the social media app will be included at this year’s WWDC, such a move could accompany the expected iOS 11 announcement. This would represent an interesting move for the company and if well-executed, the resultant hype could push AAPL stock in 2017 even higher.

Another potential big reveal will come for Siri, everybody’s favorite artificial intelligence (AI) technology (sorry, “Cortana”).

In what probably belongs in some cyberpunk spy novel, there’s a secret office in Cambridge, UK, where Apple is developing improvements for Siri. No, this probably isn’t the start of Skynet (we hope) but, all the same, by nature of this secrecy, we can’t help but be intrigued by what they’re cooking up in the labs.

Many of the employees were formerly of VocalIQ, a voice recognition startup that was spun out from the University of Cambridge and acquired by Apple in 2015 for up to $100.0 million. VocalIQ focused on developing software that would allow computers to have more natural dialogue with people, so it only makes sense that we might see the technology integrated into Siri sometime in the near future. (Source: “Apple has a secret Siri lab in Cambridge,” Business Insider, November 3, 2016.)

Again, an announcement regarding a major enhancement to Siri could be a boon for the AAPL stock forecast.

While it’s uncommon for Apple to debut any hardware at the WWDC, with the iPhone 8 set to be one of Apple’s biggest product reveals in years, anything surrounding the next iteration of the company’s flagship product could again push the AAPL stock price soaring.

Apple WWDC 2017 and the iPhone 8

iphone sales stock chart

While investors have some very strong reasons to be excited for the WWDC, any information regarding the iPhone 8 should be considered premium.

The new smartphone is looking to be one of Apple’s biggest plays in years, which makes sense. Not only is the 10th anniversary of the iPhone’s original release historically significant, but the recent decline in iPhone sales has spurred the tech giant to come up with a proper answer to the slowing growth.

First of all, it is likely that the iPhone 8 will focus on some newer tech, like augmented reality (AR). While the device itself most likely won’t make an appearance at the conference, any mention of AR programming or technology will likely indicate that the new phone will indeed focus heavily on the new application.

“I regard it as a big idea like the smartphone,” said Apple CEO Tim Cook in an interview with Independent. “The smartphone is for everyone, we don’t have to think the iPhone is about a certain demographic, or country or vertical market: it’s for everyone. I think AR is that big, it’s huge.” (Source: “Apple CEO Tim Cook: As Brexit hangs over UK, ‘times are not really awful, there’s some great things happening’,” Independent, February 10, 2017.)

Cook continued, “I get excited because of the things that could be done that could improve a lot of lives. And be entertaining. I view AR like I view the silicon here in my iPhone, it’s not a product per se, it’s a core technology. But there are things to discover before that technology is good enough for the mainstream.”

Keeping an eye out for a push toward AR could signal that Apple is ready to tackle another potentially paradigm-shifting tech. And Apple is rarely a loser when it comes to big moves like that. Other than the perennially-disappointing “Apple Watch,” the other two major Apple launches over the past decade-plus included the “iPad” and the iPhone. Both in their own way, they helped revolutionize the consumer tech business.

Other rumors on the iPhone 8 center on a new screen design and potentially wireless chargers. While not as exciting perhaps as AR capabilities, the improvements could add up to one of the more attractive iPhone offerings in several generations of the smartphone.

Apple Stock in 2017

With the Apple WWDC 2017 coming up and the iPhone 8 having the potential to be one of the biggest releases of the smartphone since the first iteration way back in 2017, Apple stock in 2017 has a lot going for it.

Some analysts believe that a new and improved iPhone will shatter sales records, putting sales numbers in the 120 to 150 million range. This would be huge for Apple, as the company experienced its first-ever year-over-year sales declines in 2016. Only in Q1 2016 did the company register any growth in sales from the previous year, and even then it was quite stagnant, with only minimal gains.

Apple is back on track in 2017, with Q1 results showing an increase in iPhone sales of roughly 3.5 million, compared to Q1 2016. (Source: “Global Apple iPhone sales from 3rd quarter 2007 to 1st quarter 2017 (in million units),” Statista Inc., last accessed March 14, 2017.)

A new iPhone that is able to invigorate the consumer base, along with substantial updates revealed at the WWDC, would certainly help spur on a brighter Apple stock forecast.

As for Apple stock in 2017, the company is off to a pretty good start. AAPL stock has shot up 20% since the beginning of the year. Over the past 12 months, shares have grown by 36% and seem to be trending upward. An iPhone 8 that shatters records, for example, would only help push those numbers even higher.

Of course, with all the hype surrounding the new iPhone and some of the improvements that investors and consumers are hoping to see at the WWDC, disappointment could end up costing AAPL quite a bit.

Another big issue for the Apple stock forecast is that the company’s market cap is roughly $70.0 billion short of where it was two years ago, the last time the company edged around the $130.00 per share mark. After setting all-time highs, some analysts are concerned that Apple may actually be in a weaker position now than it seems, as it has registered a 16% lower net income and nine percent lower earnings per share compared to 2015. (Source: “Don’t be fooled by Apple’s record high,” CNBC, February 14, 2017.)

Apple is funding a part of its share value increase through buybacks, in which Apple increased earnings per share by culling stock. Apple has engaged in $70.0 billion worth of buybacks over the last two years. Over the last five years, the company has eliminated more than a billion shares.

Another issue is that Apple’s last four quarters earned it $45.2 billion in net income, which is quite the departure from the $53.4 billion it earned in the four quarters ending September 2015.

Not to mention that Apple finds itself mired in debt. The company has packed on nearly $75.0 billion in long-term debt since 2013. Worse yet is that the company started from nearly zero debt at that time.

With all that in mind, Apple is looking for a winner to continue its stock price rise and prove that the buybacks and debt are irrelevant to its share growth potential.

With big events like the Apple WWDC 2017 and the iPhone 8 release coming up, there’s plenty of excitement for Apple stock in 2017. The question of whether the company can capitalize on this potential will mark huge waves in APPL stock, for ill or good.