Apple Inc. (AAPL - Analyst Report) is replacing Google (GOOGL - Analyst Report) search with Microsoft’s (MSFT - Analyst Report) Bing as its default search engine. In the recently concluded Worldwide Developer Conference (WWDC), Apple announced that the change will affect Spotlight on OS X Yosemite and iOS 8.
Apple will continue to use Google Search in desktop Safari for the current operating system. However, Safari on Yosemite will also use Spotlight, which, by default, will use Bing to access the web.
Last year, Apple switched to Bing for Siri’s Internet search replacing Google. Apple’s improving relationship with Microsoft has been instrumental in selecting Bing instead of other search providers like Yahoo! (YHOO - Analyst Report).
The recently announced integration is indeed a much bigger win for Bing as it will greatly boost traffic. Using Bing as default search engine will also lower Apple’s dependence on Google, its nearest competitor in the smartphone operating system market.
Apple is also updating Safari in iOS 8 and OS X Yosemite to support DuckDuckGo, the popular private search engine. As DuckDuckGo does not store user data for advertising purpose, it has become a suitable alternative for Google search, particularly for privacy conscious users. The addition of DuckDuckGo as private search option in Safari will further hurt Google’s traffic over the long run.
Apart from the changes in search engine, Apple is giving the new OS X Yosemite a makeover. The new OS includes a redesigned user interface, much like the iOS, as well as new features focusing on seamless integration between Mac and iOS devices. Apple also announced a new cloud storage system called iCloud Drive at the WWDC.
Apple also showcased new features of iOS 8 and launched HealthKit, which is a platform aimed at uniting health and fitness data from a wide variety of apps and services. It can act as an early-warning system that doctors can use to detect an unexpected spike in blood pressure or perhaps even a missed medication dosage.
However, the announcement of this new platform and iOS has further fuelled the rumors related to iWatch. Reportedly, Apple is set to launch the much anticipated device in October this year. According to Japan’s Nikkei Asian review, the iWatch will feature a curved touchscreen and be designed so that customers can use it to collect health data about themselves.
Traditionally, Apple has refused to divulge details about its product pipeline, which drove anticipation about its products. Although this secrecy has helped it to gain significant attention in the past (which also helped the stock price), we believe that the game is not exactly the same any more. Continuously updating bits and pieces right through the year and using the opportunity to display technological lead is what drives share prices today.
Moreover, while new products like a cheaper iMac, larger-screen iPhone, an iWatch or an updated Apple TV could be in the pipeline, we believe that it is high time that Apple provided some granularity about these products or at least provided a timeline for the launch. As long as Apple maintains secrecy, jittery investors will keep share prices under pressure.
Currently, Apple has a Zacks Rank #3 (Hold).