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Apple pulls its customers even closer

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Bloomberg

Hi everyone. It's Mark here. Apple's Worldwide Developers Conference this week didn't bring any particularly revolutionary new feature, but it did something perhaps more important for Apple's long-term strategy. The latest updates will unify the company's devices and give customers more reasons to stay within its product ecosystem. 

From an average user's standpoint, the updates to iOS and iPadOS were underwhelming and minor, aside from widgets (which Android has had for years). Siri's interface changes were impressive, but there wasn't much discussion of a needed under-the-hood revamp, and the Watch update was incremental, other than sleep tracking. The company didn't let these products languish, but Apple's engineers essentially did just enough

The really impressive achievements came in getting the products to work together, plus sweeping improvements to the Mac. The biggest news of the conference was that Apple-made chips will replace those from Intel Corp. in Mac computers. Besides higher speeds and longer battery life, the change customers will notice first is that Mac computers will work more like an iPhone or an iPad, and will have the ability to run the same apps on the new macOS Big Sur operating system. 

Soon, someone will be able to buy an iPhone app and run it across Apple's major platforms: the Mac, the iPhone, the iPad, and in some cases a variant of it on the Apple Watch and Apple TV. 

The company also moved toward increased unification by bringing over glance-able information (widgets) from the Apple Watch to its larger devices, and by more deeply integrating its smart home features across products. For example, a HomePod speaker can now be a doorbell and an Apple TV can be a door camera viewer. 

All of this may drive existing customers to buy additional Apple products, knowing that they'll work together seamlessly. The strategy could boost Apple's sales in the long-term and, just as importantly, make it more difficult for a user to leave behind a device, which could blow a hole in their network of Apple products. 

The stakes for the company are high. For example, a customer might have an iPad, iPhone, Mac, Apple TV and an Apple Watch, when Samsung comes out with a stellar new smartwatch that piques their interest. The customer buys the watch, and then eventually gets exposed to Galaxy phones and Samsung's tablets, home devices and laptops. But if they have multiple Apple products that already rely on one another, it will be more difficult it will be to make the switch to Samsung. 

Besides making its devices function together, and act more similarly than ever, Apple has also introduced a slew of individual new features that will make it harder, if not impossible, to leave the Apple world.

Take CarPlay, Apple's in-car interface when you plug in your iPhone. The iPhone operating system has a new feature for letting your iPhone be your car key that, based on the adoption of CarPlay, could be a new car staple in just a few years. How can a user ditch their iPhone if it's also the key to their car? The Apple Watch got more useful, too, finally adding sleep tracking. And buying AirPods (which don't fully work unless you're an Apple user) makes more sense than ever as they can now automatically switch between multiple devices.

One risk to Apple is that all this lock-in might be antitrust fodder, given major governments' recent ambitions to investigate Big Tech for stamping out the competition. But the company has an olive branch for that too: Users can now set third-party email and web browser apps as defaults on the iPhone and iPad, and can even hook up a rival music service to the HomePod. The company's next challenge will be to make sure its apps and services are good enough to keep people on its hardware.Mark Gurman

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