Apple's WWDC 2018: Forget the gadgets, it's all about services and software

Apple may want you to use its hardware less, but it still has a way to keep you in its world.

Shara Tibken Former managing editor
Shara Tibken was a managing editor at CNET News, overseeing a team covering tech policy, EU tech, mobile and the digital divide. She previously covered mobile as a senior reporter at CNET and also wrote for Dow Jones Newswires and The Wall Street Journal. Shara is a native Midwesterner who still prefers "pop" over "soda."
Shara Tibken
4 min read
Gorgeous old Chicago buildings reflected in the window of the Apple Store there. Apple's logo is in the center.

Apple will hold the keynote presentation for its annual developer conference at 10 a.m. PT on Monday in San Jose, California. 

James Martin/CNET

Apple's next pitch is to get you to put your iPhone down.

Wait, what?

The effort, a response to experts' and investors' growing fears about smartphone addiction, is likely to be one of the key themes at Apple's Worldwide Developers Conference on June 4. Aside from that, hardware has never been front and center at WWDC , so don't hold your breath for big Mac and iPad changes. And you can forget about a new iPhone.

Here's how to watch Apple's WWDC event as it happens Monday.

But just because Apple wants you to use your phone less doesn't mean it wants you to leave its universe. The company will use its keynote presentation at 10 a.m. PT on Monday to show off its latest software and services, which are becoming increasingly important as iPhone sales growth slows. And Apple will need to figure out how to make Siri , well, useful, if it wants its HomePod smart speaker to stand a chance against the Amazon Echo or Google Home .

And of course, we'll see a new version of iOS (likely called iOS 12, unless Apple really decides to go crazy), as well as new software for Macs, Apple TV and Apple Watch . The company likely will show off ways its different operating systems work better together.

"The buzz is much less this year than in previous years," Technalysis analyst Bob O'Donnell said. "Now it's about refinements."

News of Apple's push to combat device addiction comes from a Bloomberg report, which said the move is part of Apple's "Digital Health" platform.

Watch this: iOS 12 preview and what we expect at WWDC 2018

Apple has to maintain a delicate balance. It's in the company's best interest for us to use its devices, apps and services as much as possible, and Apple wants to create software and services that keep us hooked on its devices. But it's also faced fire over the addictive nature of that technology. And while the company generates about two-thirds of its revenue from its iPhones, services are becoming the fastest growing part of its operations.

Bloomberg also reported that Apple won't make huge changes to its iOS and Mac operating systems this year, deciding instead to focus on making its software more responsive and less buggy.

Apple declined to comment ahead of WWDC.

Soaring services: Apple Music, Apple Pay, the App Store

The iPhone has long been Apple's chief moneymaker, but smartphone demand isn't what it used to be. People are holding onto their devices longer than before, and it's becoming harder for phone makers to differentiate their products from rival offerings. Apple's iPhone sales have been holding up, but it's the company's services business that's viewed as its next big growth area.

Apple's services business has been "growing dramatically," as CEO Tim Cook said during the company's earnings conference call last month. Revenue from things like the App Store, Apple Music and Apple Pay topped $9 billion for the first time, up more than $2 billion from the previous year. The total, $9.2 billion, also was double the services revenue Apple generated just four years ago.

Paid subscriptions topped 270 million in Apple's March quarter, up more than 100 million from the same period a year ago and up 30 million from the end of December.

"Services is fast becoming Apple's primary growth driver," Morgan Stanley analyst Katy Huberty said, adding that she believes "that the App Store, and services more broadly, holds the key to Apple's future."

WWDC will be an important place for Apple to talk up what it's doing in services.

WWDC 2018: Everything from Apple's Worldwide Developers Conference

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Software, software and even more software

Yeah, we know. It's hard to get excited about APIs and developer tools. But what Apple shows off Monday will give hints about the iPhones coming later this year, as well as what we'll see in the company's other devices.

One of the biggest areas that could use improvement is Siri, Apple's digital assistant found on its mobile devices and its HomePod smart speaker. Though Apple introduced Siri before Amazon's Alexa and Google's Assistant, it's often found to be less capable than its smart assistant competitors.

"Apple must change the perception that it is lagging behind Amazon and Google on voice-based assistants and on conversational interfaces," Forrester analyst Thomas Husson said. "While still overhyped, there is no doubt that voice as an interface powered by artificial intelligence is a disruptive force Apple must embrace faster."

Apple likely also will introduce new augmented reality features, building on last year's introduction of ARKit. Cook has said AR, which overlays digital images on the real world, is a technology that's potentially as important as the iPhone. This year, Apple could introduce the ability to play multiplayer games in AR, among other improvements.

Health and fitness is another big opportunity for Apple, particularly when it comes to the Apple Watch. The company could introduce new features or let developers tap into different sensors on the watch to make better apps.

"I'm expecting for sure a continued focus around health on the watch," said Creative Strategies analyst Carolina Milanesi.

Tune back to CNET for full coverage of WWDC

Originally published June 1 at 5 a.m. PT.
Updated June 4 at 4:55 a.m. PT: Added information on how to watch Apple's WWDC keynote.

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