Google announced in August that it was ending development of the real-time communication and collaboration project due to low user adoption. Since then, it has been working to prepare Wave in a Box, a standalone version that would give developers the functionality of Waves and the ability to run them on their own server.
As many of Wave's components are open source, others can and do continue to work on the project. According to Google, at November's Wave Protocol Summit it was "quite clear that there is a healthy community of startups, independent developers and industry partners enthusiastic to continue development of the Wave Federation protocols and Wave in a Box." By being part of the Apache Incubator, that community will be able to continue to grow.
Alongside community development, one of the initial goals of Apache Wave is to migrate the codebase from code.google.com to the Apache Software Foundation's infrastructure.