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Apple's stealth innovation play

Apple's (AAPL) closely watched annual Worldwide Developers Conference opened Monday with the company announcing mobile and desktop upgrades and new systems for monitoring health and automating homes.

While such initiatives might amount to big news for most companies, investors were unimpressed. Apple shares barely nosed up immediately after the event and were down 0.7 in after-hours trading. The message: Shareholders want less incremental improvement and more of the groundbreaking innovation that has powered Apple's business to astounding heights in recent years.

“There’s an app for that”

But while investors and consumers have come to depend on Apple launching a blockbuster new product every few years, the company's latest moves highlight an important shift underway at the tech titan.

Instead of following a strategy that relies on a succession of breakthrough products, Apple is finding new ways to expand the use of its devices into new spheres. And by more tightly integrating its products and services and those of its developer ecosystem, CEO Tim Cook is acting to grow the company's user base and give customers more reason to stay with Apple.

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For example, the company's new HomeKit will let other companies build apps and items for the home that can be controlled from an iPhone or iPad. Although the presentation said users will be able to control "locks, lights, cameras, doors, thermostats, plugs, switches," that is likely only the beginning. Ultimately, Apple's vision is far broader and could include kitchen appliances, entertainment systems and even hot tubs.

The home-automation market has been around for decades. However, only recently has the technology has developed to a point that people other than electronics hobbyists might knit systems together and control them with relative ease. More important, it gives Apple's customer base yet another way to use their iThings. Another example earlier this year was Apple's introduction of a system that allows an iPhone to integrate with a compatible car.

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In the same vein, Apple's new HealthKit and Health apps allowed its devices to store and display monitored health information. Third party apps and devices, like Nike's, will record that information. Going beyond a fancy way to read your pulse or blood pressure, Apple also has deals with hospitals like the Mayo Clinic and with hospital software vendor Epic Systems. That could open the door for an Apple mobile device to become the first choice in hardware to automate data collection for the health care industry, and to act as the professional device of choice for care providers.

Apple also announced systems to let developers create cloud-based apps, use Apple's fingerprint security system and make software run faster.

The bottom line: Apple continues to show its sophistication in drawing ever more industries into its ecosystem, giving consumers and other technology companies more reasons to keep buying iPhone, iPads and Macs.

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