Dive Brief:

• Apple announced iOS 11, the latest version of its mobile operating system, at an annual event yesterday, which was live streamed. It releases in beta later this month and to all users in the fall. One key new feature will be the ability for users of Messages to send money to someone else via a message using Apple Pay, the company’s entry into person-to-person payments. 
• ARKit is a new augmented reality (AR) developer platform announced by Apple that will also release with iOS 11. It will be available on iPads and iPhones, making it the world's largest AR platform, according to the company. Apple also unveiled a Siri-powered smart speaker called HomePod that will be available in December. The company promises the devices' sound quality will be an important point of differentiation.
• A new update to Apple’s Safari web browser on desktop was announced that will block autoplay videos while another new feature prevents ad tracking technology from following users around the web. 

Dive Insight:

Apple offered a sneak peek of what’s coming down the pike during the second half of 2017 at the company’s annual WWDC meeting for third-party developers yesterday, but there was little that was new or innovative on display, as most of the developments have been rumored about previously and touch on several rapidly emerging areas where the company has been mostly absent to date: person-to-person payments, augmented reality and smart speakers.

Despite the apparent lack of innovation, there is still potential for a significant impact on marketers’ strategies given Apple’s reputation for making complicated technologies more consumer-friendly through simple user experiences and sleek design. Additionally, Apple’s installed base of users is known for quickly upgrading to the latest software — meaning the new features will have a sizeable audience. For example, the latest version of Android — Nougat — is only being used by 4.9% of devices while iOS 10, the newest software for Apple devices, is installed on 79% of devices. 

ARKit is interesting because it takes advantage of an iPhone's capabilities like motion sensors, camera, CPU and GPU and brings them all together in one AR platform. Because it automatically becomes available on iPhones when users upgrade to iOS 11, this means ARKit could become the largest AR platform in the world overnight, per Apple.

While AR has been quickly growing, it so far has been limited to platforms focused on specific uses, like gaming — Pokemon Go is the best example of this — or accomplishing tasks, like Blippar's visual discovery app. ARKit has the potential to introduce AR to more consumers and is likely to attract marketers and developers interested in reaching iPhone users. Whether this new functionality will be enough to reinvigorate the market for branded apps remains to be seen.

“As for AR, the ease in inserting differentiated experiences into apps will give many marketers reasons to step on the gas pedal and create environments that help sell product and separate their apps from those of their competitors,” Jeff Hasen, mobile strategist at Possible Mobile, told Mobile Marketer in an email. “Surely, some brands will move from thinking that a mobile website is sufficient given the new functionality in apps and reach to iOS users.”

Apple’s launch of HomePod further solidifies that smart speakers are quickly becoming an important part of the connected device landscape and a key way for developers and marketers to engage users, as evidenced by the fact there are more than 10,000 mini-interfaces, called "skills," for Amazon Alexa. While Apple was one of the first to market with its digital assistant Siri and has long been a leader in digital music, it failed to recognize the potential in pairing these software features via an in-home device. That lapse left an opening for Amazon, which is the clear leader with its Alexa assistant and Echo devices. Google is also making a play here as are a number of other tech and consumer electronics companies.

Despite the flurry of launches in the smart speaker category this year, "nobody has quite nailed it," Phil Schiller, senior vice president of worldwide marketing at Apple, said during yesterday's event. With this in mind, Apple hopes to stand apart with superior sound quality, an embedded A8 chip and compatibility with Apple Music.

P2P mobile payments were made popular with young consumers using apps like Venmo to split the bill at dinner. By integrating a similar service into iOS Messages, this could help Apple widen the appeal of Apple Pay as mobile payments, overall, continue to grow slowly.

The introduction of an ad blocker for Safari on desktop follows a similar recent move by Google for Chrome. Given the potential of such strategies to undermine publishers’ monetization strategies, together these moves suggest that platforms and publishers are not likely to see eye-to-eye as each side moves to deliver better quality experiences, including the likelihood that ad blocking efforts will be extended to mobile at some point.

“The knee-jerk reaction would be for marketers to fear the coming ad blocking and tracking options in Safari,” Hasen said. “But the fact for U.S. marketers is that 94% of mobile ad blocking happens in Asia-Pacific.

“We need lots more information from Apple, but it’s unwise to believe that all mobile users will choose to maximize privacy,” he added. “Why? Personalization is desired by large numbers of people. In fact, 75% of consumers are more likely to buy from a retailer that recognizes them by name, recommends options based on past purchases, or knows their purchase history, according to Accenture. The key for brands is to use the gathered personal information wisely and to not be creepy.”

Other key news announced yesterday includes the ability to sync Messages across devices, a new voice for Siri that promises to be more natural sounding and QR code support integrated into device cameras.