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posted: 6/7/2014 8:28 AM

Apple pitch to programmers shows threat from Google

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  • Tim Cook, chief executive officer of Apple Inc., delivers a keynote address during the Apple World Wide Developers Conference (WWDC) in San Francisco, California, U.S. on Monday, June 2, 2014.

      Tim Cook, chief executive officer of Apple Inc., delivers a keynote address during the Apple World Wide Developers Conference (WWDC) in San Francisco, California, U.S. on Monday, June 2, 2014.
    Bloomberg News

 
Bloomberg News

Apple Inc.'s pitch to developers at its annual conference this week shows how Chief Executive Officer Tim Cook is ramping up efforts to keep programmers from switching loyalties to Google Inc. and others.

With Google trying to lure coders and designers to create more for its Android mobile software, Apple used its event to introduce new features to keep them in the fold. The iPhone maker showed improved methods for customers to find apps to download, a new programming language to create apps more quickly, and tools so the programs can work seamlessly together.

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The announcements represent Apple's most comprehensive set of enhancements for developers since the company debuted its App Store nearly six years ago. For much of that period, the world's most valuable company had a near lock on programmers as iPhones and iPads proliferated, giving developers a vast audience who could download their games and other widgets. Yet Google's Android has since seized market share and others such as Facebook Inc. have rolled out tools to cater to developers.

"Apple is going the extra mile" to maintain developer loyalty, said Carolina Milanesi, who studies the mobile industry as research chief at Kantar Worldwide. She said the message Apple is sending is "we wouldn't be here if it weren't for you."

Key Ecosystem

A healthy apps ecosystem is crucial for Apple, with mobile programs including productivity tools and games like Candy Crush helping to drive consumer interest in its devices. Spurred by such App Store downloads, people keep coming back to buy the latest iPhones and iPads, which generate more than 72 percent of Apple's annual $171 billion in revenue.

Having developers on a company's side has long been a competitive advantage in the technology industry. Microsoft Corp. found that in the 1980s and 1990s when many programmers created for Windows and shunned Apple's Macintosh operating system for personal computers. Microsoft has since seen the flip side, with fewer developers making apps for its Windows Phone software. That has left Windows Phone-based hardware trailing Apple's mobile devices and Google Android gadgets.

Apple worked to make it clear yesterday that it isn't taking developers for granted. The company started its event in San Francisco with a video praising the crowd of 6,000 developers, who cheered wildly at nearly every new feature showed by Apple executives.

"From all of Apple, thank you very much," Cook said during the keynote. The announcements are meant to help build apps on a "whole new level," he said.

Strong Rivals

Competition for developers in the $23 billion apps industry has intensified in the past few years as more companies strive to grab a piece of the mobile market. Google, which is holding its own developer conference in San Francisco later this month, has overhauled its Google Play apps store to make it more customer friendly and added tools to simplify the production of apps for Android devices. Facebook also introduced its own set of software tools last month so makers of mobile apps would use its servers as a foundation for producing its programs.

The threat is clear for Apple. As of the end of last year, Android's worldwide market share was 78 percent, up from 66 percent in 2012, according to researcher Gartner Inc. Apple's mobile software, iOS, had a 16 percent share last year, down from 19 percent in 2012.

Developer Shift

The market shifts were enough to push startup WhoDoYou to begin its service on Android instead of the iPhone platform. The business recommendation service, which competes against Yelp Inc. and Angie's List Inc., debuted earlier this year.

"We track the percentage of mobile users very carefully and have found that Android is growing more quickly than iPhone," CEO Yoav Schwartz wrote in an email. "Our iPhone app will be coming out soon, so it's not a very strategic decision, but we thought it made sense for us to start on Android first."

Apple still enjoys a key advantage over its rivals: money. Applications make about 85 percent more revenue on Apple devices than they do on Android, according to App Annie, which tracks the market.

Nitty Gritty

With its newest software unveiled yesterday, Apple added features to address criticism from developers who are finding it harder for their programs to be discovered and make money amid a sea of software. Apple rolled out new search tools to help customers find programs to download, as well as app bundles so they can buy a batch of apps at a discounted price. The company also added a testing feature so app makers can get people to try something in development, and previews so users can view short videos to see if it's something they want to download.

Apple also added ways for applications to work more closely with each other -- for example, a photo edited in one application can be quickly added to another one. The apps are currently isolated so data can't be shared with another tool.

Developers also will be able to take advantage of new software for health tracking and controlling home appliances. Apple debuted HealthKit to serve as a hub for the different programs now available that track fitness, including steps taken, food eaten or heart rate. Apple also showed HomeKit, a set of tools for developers to make iPhones work with so-called smart homes by controlling things like a light bulb, door lock and garage door with a smartphone.

Apple's Direction

Another new features allows coders to write programs that use Apple's TouchID fingerprint-authentication technology that's on the iPhone 5s. That had previously only been available for Apple services.

In addition to the developer announcements, Apple previewed new iPhone and iPad software, called iOS 8, and a redesigned Mac operating system, called Yosemite. Both will be released later this year.

The updates offer a glimpse of Apple's direction since the death of co-founder Steve Jobs in 2011. With iPhone and iPad sales no longer the source of growth they once were, Cook has been under pressure to deliver another hit. Last week, Eddy Cue, Apple's head of Internet services, said the company's product pipeline is the best it has been in 25 years.

The health-tracking software Apple unveiled yesterday is seen as Apple's first step toward introducing a wearable device later this year.

"It was a show for laying the foundation for the next structures that are going to be built," Horace Dediu, a mobile- industry analyst who runs Asymco, said at the conference.

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