Analysts Expect Apple Gains With iOS 5, iCloud

By Joseph Palenchar On Jun 20 2011 - 4:01am




NEW YORK — Apple’s planned iOS 5 operating system and integrated iCloud services will make Apple devices “stickier,” remove potential barriers to owning more than one Apple mobile device, and tap into consumers’ growing desire for a Cloud-based music service, analysts said of the technologies’ planned fall launch.

Analysts also noted that many iOS 5 features have already been available on other mobile devices, such as over-the-air software upgrades, over-the-air activation of smartphones, and a dedicated messaging service separate from cellular carriers’ own messaging services.

One major difference separating iOS 5 from the pack, however, is the ability of iOS 5 handheld devices to leverage Apple’s planned iCloud Cloud-based services, which push newly created or downloaded content from one iOS-based mobile device to a user’s other iOS devices and to their Macs and PCs. The content includes apps, pictures and videos as well as documents created in iWorks on Apple’s mobile devices.

“iOS 5 makes the Apple ecosystem easier to use, increases the value — and stickiness — of sticking in the Apple ecosystem, and fixes many nagging issues that have haunted iPhone users for four years,” said analyst Josh Martin of Strategy Analytics. “iCloud becomes the foundation of the iEcosystem today with sights on grander ambitions tomorrow.”

Canaccord Genuity analyst Michael Walkley used similar terms in contending that the “tight integration of Apple’s MacOS, iOS and iCloud offerings creates an extremely sticky customer base.” As a result, “we believe a growing and loyal user base will result in strong devices sales and earnings growth for the next several years.”

For his part, The NPD Group’s executive director Ross Rubin said Apple’s announcements provide “a mix of short-term benefits and long-term potential.” He said the announcements “close some feature gaps, launches a platform (iCloud) for potential new web applications, and reboots their Cloud strategy.” Adding the changes “will bring a new convenience level to keeping documents and media in sync among multiple devices and will remove a potential barrier to buying an additional mobile device,” he noted.

Canaccord’s Walkley also lauded Apple’s new syncing capabilities. The ability to automatically sync music, applications, photos, books, documents and more across all MacOS and iOS products “should drive increased customer loyalty, resulting in recurring software and hardware purchases,” he said. The developments “will make it much more difficult for competing ecosystems to compete long-term.”

The enhanced data sharing and automatic sync capabilities across Apple products, he added, “will serve as a halo affect that will lead to increased Apple hardware sales and software and content purchases across the entire Apple device portfolio.”

The music-synchronization capabilities of iCloud are of particular interest to iTunes users, NPD also said. In a recent survey, 46 percent of iTunes users expressed interest in using a paid Cloud digital music service to store and access iTunes music libraries from any web-enabled device running iTunes.

NPD entertainment industry analyst Russ Crupnick said, “As device penetration continues to grow, and as consumers demand easier access to their music from multiple devices, we can expect interest in these services from Apple and others to continue to rise.”

Teenagers 13 to 17 were most interested, with 57 percent expressing interest, NPD said.

The iCloud service, combined with more than 200 changes in iOS 5, have been positioned by Apple as pointing the way to a post-PC world in which Cloud-based services push newly created or downloaded content from one iOS-based mobile device to a user’s other iOS devices via cellular and Wi-Fi and to their Macs and PCs, automatically sync contacts and calendar/email updates among multiple devices via cellular and Wi-Fi, and automatically back up their content, including photos, once per day via Wi-Fi to the Cloud.

The service will also let users buy an app, song or ebook from the iTunes store and automatically push it from the Cloud to a total of 10 iOS devices. With iCloud, users can also manually upload all their ripped songs to the Cloud to synchronize them via Wi-Fi with all their iOS devices, or they can pay $29.99/year for an iTunes Match service that will scan the songs on a device, match them to iTunes’s 18 million songs, and push higher quality versions of the songs to multiple iOS5 devices.

Also to cut a mobile device’s connections to the PC, iPhone purchasers won’t have to connect their iPhone or iPad to a PC to activate it, and they’ll be able to download software updates over the air. iOS users will also be able create calendars and mailboxes right from their mobile device.

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