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Apple's New SwiftNIO Might Be A Hint Of Bigger Cloud Ambitions To Come!

Mar. 07, 2018 9:03 AM ETApple Inc. (AAPL)AMZN, GOOG, GOOGL, MSFT75 Comments
Zynath Investment profile picture
Zynath Investment


  • In this article we look at the newly released SwiftNIO framework from Apple.
  • We wildly speculate about how Apple can take this project further and use it to compete with Amazon's AWS and other cloud providers.
  • Finally, we look at an options strategy that could result in 140% upside if Apple was to trade up to $200 by 2020.

A few days ago at the try! Swift Conference Apple (NASDAQ:AAPL) software engineer Norman Maurer introduced SwiftNIO, a new high performance network for networked server and client applications. In this article we are going to discuss this new technology and then wildly speculate about what this could possibly mean for Apple in the future. With Swift and now SwiftNIO becoming open source we see Apple finally entering the cloud computing space and challenging Amazon's AWS (AMZN), Microsoft's Azure (MSFT) and Google's Cloud (GOOG) (GOOGL) sometime in the future.

(Swift Logo from Apple.)

Swift and SwiftNIO

Swift is a programming language introduced by Apple in 2014. It's a general-purpose compiled programming language used primarily for iOS, MacOS and WatchOS development. Apple describes it as "Objective-C without the C." It generally has a modern syntax, fast prototyping capabilities and it runs close to the metal when compiled, which allows it to be very efficient on Apple's hardware platforms.

On introduction in 2014 Apple announced that they will be open sourcing the Swift language, which immediately inspired developers to attempt to use Swift for web and server side applications as well. However, since the initial introduction Apple has not made any significant push to make Swift a serious player in the server side programming market, until now.

(Photo from the try! Swift presentation by Chris Bailey.)

A few days ago at the "try! Swift" Conference in Tokyo Apple introduced the SwiftNIO framework. SwiftNIO is short for Swift Non-Blocking IO. As described on the project's GitHub page, it's a "cross-platform asynchronous event-driven network application framework for rapid development of maintainable high performance protocol servers & clients." That sounds fancy, but what does that all mean? Well, basically SwiftNIO is a low level framework that can be used to implement communication protocols and APIs in Swift, which then can communicate with back-end Swift code for your web and mobile

This article was written by

Zynath Investment profile picture
California Licensed Attorney, Business and Information Technology consultant, and biotechnology entrepreneur. Individual investor investing in small, mid, and large cap IT and Biotech companies. Main concentration is event driven investment in option derivatives of high tech and biotech stocks. Concentration on medium time horizon of 6 to 36 months.

Analyst’s Disclosure: I am/we are long AAPL. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (75)

neals58 profile picture
Why the heck did the stock drop today whenever FB was up is the bigger question? Do not see any negative news out there?
Glen Rivard profile picture
Neal, Some point the fact they peaked in 2015 and iPhone, iPad and Mac sales all peaked a couple of years ago will catch up with share price.




But the biggest is now Apple user base is in decline.

“Apple install base declining”

Swordmaker profile picture
Glen—"Some point the fact they peaked in 2015 and iPhone, iPad and Mac sales all peaked a couple of years ago will catch up with share price."

Some, Glen? Only you keep making that false claim. The rest know the history. You are perfectly willing to explain away Google's loss as being due to an extraordinary one time event, but you are NOT willing to accept that Apple had an extraordinary one time event in 2015. You are a hypocrite.
I find this annoying too.

If you chose a select period in history and select other investments then you could have done better than invest in apple.

So what?

That was also true of Google yesterday, today and will be true tomorrow.

I have respect for Glen's opinions on future technologies and impact. There's meat there.

This refrain that you could have chosen this rather than that three years ago is utterly pointless.

Even if you give it merit, and own a time machine, you wouldn't choose Glen's investments from three years ago anyway.
jef.holtmyer profile picture
If Apple is headed in the direction you are pushing here. Would it not be like Apple to keep the, higher end, back end processing coded for an in house CPU? And if Apple does this. They would be pushing for the highest performance with the lowest security issues, as well as the lowest overall cost for themselves. In this way they will continue to provide the most profitable cloud framework with the highest margin. Once again gaining the highest percentage of the cloud profits while owning a minority of the cloud business. And by keeping the hardware side of the high end backend keyed to an in house CPU it all becomes possible for them only. Keeping the low end back end open source will allow startups and hobbyists to create the initial web sites with out losing out on the larger customers and those that grow into larger customers.
I believe keeping it all open source is key to long term acceptance. Even if long term users will be dragged into Apple's Walled Garden by the sheer weight of their project.
Love your article.
Gregg Thurman profile picture
With 2020 being nearly two years out I would look at a delayed construct vertical spread. Buy your JAN 2020 $170 Calls today (at $12.50), then within the next 9 months sell the JAN 2020 $200 Call at a higher price than is available today. Doing so reduces exposure during 2019 AND increases your ROI (depending on how much more you can sell the JAN 2020 $200 Call than you can today).

Personally, I like the 2020 $200/$230 Call Spread at $7.85 (ROI 275%). During 2017 AAPL went up 50% YoY. So far this year AAPL is up 25% YoY. Given Apple's initiatives in iPhone X (much higher ASPs that are only going to get higher), Apple Watch Series 4 and 5 (expansion of health functionality) and HomePod (coupled with AppleTV, Apple produced content and AR), AI personalization of functionalities, and governmental benefits of lower corporate taxes and cash repatriation, I think it is realistic that AAPL conservatively goes up another 35% in the next 21 months. That puts AAPL, at minimum, at $240 by January 2020 with an 18.50 PE.
akvadrako profile picture
Non-blocking IO is nothing special - it's a standard piece of any major software ecosystem for the past 20 years. Somehow connecting it to the "cloud" is just absurd.
Glen Rivard profile picture
Ak,. Agree. A great example is Node.js. But we have had async for over 30 years. VMS it was common. Unix it depended on the kernel. Sys V was not renterable so avoided but BSD was. Linux no problem.
We've had async since the 1960s, a decade and a half before VMS.

If nothing else, that's how the teletype was connected.

So many breakthrough developments in software are a neat repackage of old principles.

Heck object orientation was used by the Egyptians when they built the pyramids.

On topic of the article, I agree with the author there could be an really interesting market for developers already captive to a Swift front end in offering more integrated back end services.

That doesn't negate comments that there are other technologies which won't be directly challenged by this.
Glen Rivard profile picture
Bob,. I would agree long before VMS but I am only so old.
I find myself well over my head but the conflict in the various comments lead me to believe that ANY outcome within a reasonable period of time 4 years will in fact not effect my stock in Apple.. I will continue to buy the dip and hold for a future . Either to understand that future or not. Go Apple.
Glen Rivard profile picture
Apple failed in creating their own cloud. They just use Google now.

"Apple confirms it uses Google's cloud for iCloud"


Everywhere but China. In China they use GCBD which is managed by the China government.

The iCloud head left a couple of months ago which is a pretty strong sign they done trying.

"Apple's head of iCloud infrastructure leaves company, report says"

Apple spent billion on MacQueen named after the MacQueen movie "The Great Escape" but Apple failed to escape.
Bradmeister profile picture
@Glen Rivard - Not true. Apple takes a hybrid approach to its cloud services, combining massive Apple owned and operated data centers throughout the world with outsourced cloud storage provided by Amazon S3 and Google. The departure of one Apple executive means nothing.
Glen Rivard profile picture
Brad,. Apple outsources their customer facing to Google and just does their internal stuff. Apple failed to build their own.
Glen - "Apple outsources their customer facing to Google and just does their internal stuff.".

Can you point us to the information that supports that claim?
This is just plain wrong. Creating a cloud platform has nothing to do with programming languages or backend frameworks, just take a look at Amazon Web Services.
Doubt Apple would offer a cloud platform while it is a customer of Amazon and Google.
vicwinkler profile picture
I agree that it isn't what Apple are doing, but being a customer of Google or Amazon wouldn't stop anyone from doing this. (Other things will, such as customer focus ...you can't do everything.)
skifun333 profile picture
Eventually Apple will not need to be a customer of google or amazon.
vicwinkler profile picture
This does not look like an Apple push into providing a fundamentally different cloud service than what iCloud is. It is certainly possible, but the investment in software would need to go far far beyond event handling.

That said, Apple is —across the board— in a longer-term push to provide low-level functionality via higher-level abstractions. Thats what the frameworks are really. Apple's various frameworks provide the means for a developer to easily and reliably access low level functionality in areas like voice interaction, machine learning, augmented reality, IoT, health, ... And now, Apple is sharing their internal learning around Swift event handling with developers.

It does make sense to me for Apple to provide additional cloud services, but at this stage they don't need to. If they are headed there I tend to believe that we will see many more of these kinds of projects.

...AWS? That is a completely different game, with very different revenue models than what Apple is doing well at this stage.
I think this is a rather far fetched postulation by the author. The uptake among the developer community will face an uphill battle. Why would I switch when I already have node JS and react native to write my apps? That's applicable for web, android, and iOS. AWS and google cloud are much further along and have extensive offerings, competitive pricing, and geographic availability. Why would I switch? I just don't see this playing out the way the author thinks it will.
right. the story for swift for the front end is great if you are just targeting iOS devices but JS has a wider reach. swift on the backend needs to provide all the features of Google firebase before it becomes a reasonable choice there.
Agreed. And speaking of Web Assembly the author should also consider C# that already has the application framework yet to be build with SwiftNIO.

Actually I do not understand why use SwiftNIO for such an article. Kitura would be better and it also has been mentioned at try!
You have to take a growth outlook, knowing that this will be in it’s infancy, but eventually will come to compete with the big boys like AWS and Azure. Apple hasn't been first-to-market since the iPhone, but everything else they've stayed patient with (allowing other products to come first, but in the meantime refining a product and then dominating the space) has come to bear fruit. They may be late, but that's not surprising. They have the engineers and time to start competing in the near future.
Well, congratulations on this article and thank you very much for this nice piece of software-technical analysis! As a SW-Developer myself, I am with you on the technical side (reduced dev stack) and as an investor I would really like to see something along your line of though to be implemented, because AAPL cannot depend on just the iPhone alone forever.
Thanks once again!
peterinjapan profile picture
Interesting. Remembering that Apple has a fundamental problem running cloud like networks, they just don't do them well. But we shall see...
Yes you're right. Their battery life, and iCloud are their Achilles heels. I can't stand the iCloud I need it but it's so poorly developed it drives me insane. And I'm a huge fan of Apple and a stockholder but I call it like I see it
You do realize that Apple has been using Google's/Alphabet's cloud services right?
G H profile picture

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