Apple seen ending product funk with iPhone software revamp

Apple Inc. is preparing to unveil sweeping changes to the software powering iPhones and iPads, seeking to reignite desire for its products and blunt the advance of Google Inc.’s Android mobile operating system.

Chief Executive Officer Tim Cook will kick off Apple’s 24th annual developers conference in San Francisco today by unveiling a new version of iOS with a simpler user interface that will scrap design features such as simulated paper and faux-wood bookshelves, according to people familiar with the plans.

The period since the iPad mini debuted in October marks one of Apple’s longest product gaps in more than a decade, coinciding with a 37% share slide from a record set the previous month. The redesign of the software behind the devices that generate more than 70% of Apple’s sales is a crucial first step toward renewing consumers’ interest, according to Ben Reitzes, an analyst at Barclays Plc in New York.

“Apple has been in a funk and this is an important event to highlight how they are innovating,” Reitzes said in an interview. “We need to see that next big innovation.”

With smartphones sharing many physical traits and technological features, device makers are relying more on software design and services to gain an edge and lure consumers.

As part of that, Apple will also unveil a music-streaming service, people familiar with the plans said last week. The feature won’t be available until iOS 7 is released later this year. Apple may also announce enhancements to its maps and Siri voice-recognition software. Apple’s shares rose 1.1% to $446.51 at 10:13 a.m. in New York.

Design Revamp

While Cupertino, California-based Apple won’t be introducing a new iPhone or iPad, anticipation for the event has been building since Cook shuffled his lieutenants, putting head industrial designer Jonathan Ive in charge of the look and feel of Apple’s software. A longtime confidant of co-founder Steve Jobs and the draftsman behind the iPhone and Mac, Ive has been leading a remake of the iOS mobile software.

“Software design hasn’t been on the same level as industrial design,” said Mark Hall, chief executive officer of Remixation Inc., maker of video-sharing app Showyou. “People see this as a chance for the software user interface to get on par with the device design.”

A lot is riding on whether those changes will prove to be a hit with buyers. Apple’s iOS accounted for 18% of global smartphone shipments in the first quarter, those running Android made up 74%, according to research-firm Gartner Inc. IPhone sales climbed about 16% in the period, lagging the smartphone market, which grew 43%.

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