Next Version of iOS Will Feature New Look, Photo-Sharing Enhancements
By JESSICA E. LESSIN
This week, Apple Inc. AAPL +0.76% will try to regain its shine.
The company's annual developer conference, which begins Monday, looms as the latest crossroads as the technology icon struggles to maintain its trendsetter status since the death of Steve Jobs.
Apple's streak of game-changing devices has stalled and the iPhone and iPad seem stale, compared with new offerings from Samsung Electronics Co.005930.SE -6.31% and others. Software blunders, like Apple's widely panned mapping app, have raised doubts about the company's ability to build cutting-edge mobile services. Rivals like Google Inc. GOOG +1.72% are colonizing the iPhone with their own software, bolstering use of their own rival offerings.
The new design abandons Apple's longtime approach of designing icons and apps to resemble real-life objects, like address books and fabric, in favor of plain solid backgrounds and more white space, these people said.A thrust of Apple's counterattack on Monday is an overhauled mobile operating system for iPhones and iPads. The next version of its iOS software—now overseen by Apple's longtime hardware-design guru, Jonathan Ive—will have a new look, according to people involved in its development. Apple is expected to give developers an early version of the software this week and release it to consumers in the coming months.
Mr. Jobs pushed the original look to help people understand how to use their iPhones when the device came out in 2007, said people involved in the decision at the time. Mr. Jobs died in October 2011. Internally, employees have for years worried that the iPhone's look has become outdated and has a growing number of inconsistencies.
Whether the announcements can give Apple the sizzle it has lost remains to be seen. Investors and customers are lusting for big new products, like a television, which is being held up by discussions with cable companies and TV networks, as well as content companies, said people close to the talks.Apple wants to be able to offer a new type of service with the device that relies on cooperation from the networks and cable operators.The new iOS will also include new ways to share photos and videos with other iPhone users, as well as other enhancements, these people said. Apple is also expected to announce a long-expected streaming-music service, new laptops and an update to its Mac operating system. (Please see related article on page B4.)
The next iPhone isn't expected until the fall, with the latest model expected to look a lot like the current one, other people familiar with the matter said.
Apple shares are off 37% from a high of $702.10 last September, trading at $441.81 on the Nasdaq Stock MarketNDAQ +3.23% at 4 p.m. Friday.
At the D: All Things Digital conference in California last month, Apple Chief Executive Tim Cook did little to dispel the concerns. He spoke about "incredible plans" for future products but repeatedly declined to go into more detail. Many attendees said they left the session saying they feared the company was short on big ideas. The Wall Street Journal and All Things Digital are both owned by News Corp NWSA +1.10% .
Customers are also getting antsy. Nabil Sarih, a 33-year-old taxi driver from San Bruno, Calif., said he is satisfied with his iPhone—for now. But Mr. Sarih, who bought his first iPhone years ago, adds that he thinks the Samsung Galaxy phones his friends recently bought are much "cooler" because they have features like the ability to run several apps at once. "Apple's losing its edge," he said.
Samsung, of South Korea, widened its market share to about 33% of all smartphones shipped world-wide in the first quarter, up from 29% a year earlier. Apple had 17%, down from 23%.
Apple declined to comment.
The developer conference comes as many hardware features that Apple popularized, like high-resolution screens, have become commoditized. So, the company must step up its game in software.
Though the company has pioneered simple, easy-to-use programs, Apple has a poor track record with apps that rely on gathering and learning from data, like maps and its voice-activated assistant, Siri, according to current and former employees.
"Apple's going through growing pains in a more complex data world," one of the people said. "Google is a juggernaut and has a different culture."
For instance, Apple prefers to release software updates all at once in big updates. Google, on the other hand, tests and updates products repeatedly based on data about how customers are using the products.
Apple is aware of the issue, and Siri and the company's maps have improved. After a management shake-up in October, maps and Siri now fall to Senior Vice PresidentEddy Cue, who has been hiring more data experts, Apple employees said. He has also been deploying engineers acquired through the company's purchase last year of app search engine Chomp to help improve data practices across products, including maps, according to people close to the company.
But Apple is losing some of its grip over software used on the iPhone. The expected announcement of a new music-streaming service illustrates the threat.
The music-download service iTunes has long been one of the services keeping users glued to their iPhones. But that loyalty has been threatened as users shift to services like Pandora Media Inc. P +5.66% that allow them to stream music with ads or listen to an unlimited number of songs for a monthly fee.
Google recently announced its own streaming-music service for Android devices, andAmazon.com AMZN +3.27% is in discussions with record labels about one too.
Apple has to "have the leading software in the leading categories," said Rajeev Chand, a managing director at boutique investment bank Rutberg & Co. He said music is a critical category given that nearly half of smartphone users listen to it on their phones.
"In the post-PC world, being front and center with the consumer" is paramount, he said.
