Ap­ple’s next hit needs to be big. Will it come from the world of wear­ables or tackle the lounge?

Finweek English Edition - - TECHNOLOGY - Simon Din­gle

Ames­sianic fol­low­ing, ex­plo­sive growth and air of in­de­struc­tibil­ity have led us to be­lieve that any­thing is pos­si­ble for Ap­ple. Four-fig­ure growth over the last decade and in­cred­i­ble re­turns for in­vestors who dived in be­fore the iPad added to the idea that there’s no stop­ping Tim Cook and co. Then came 2013.

Hit­ting a high of $702 in Septem­ber 2012, the stock be­gan shrink­ing to­ward the end of the year. At time of writ­ing Ap­ple is trad­ing at around $443. The iPhone 5 has sold well, de­spite what you might’ve read to the con­trary, but not quite de­liv­ered what an­a­lysts have come to ex­pect from this cor­po­rate jug­ger­naut. The next iPad isn’t go­ing to save the day ei­ther. Ap­ple needs some­thing new, and fast.

There’s am­ple stack­ing to prop up ex­pec­ta­tions of a resur­gence for the world’s big­gest com­pany. De­pend­ing on whose spec­u­la­tion you lis­ten to, Ap­ple has been sit­ting on a dis­rup­tive new prod­uct in the world of tele­vi­sion and will un­leash it this year. Tele­vi­sion is ripe for dis­rup­tion with In­tel, Sony, Mi­crosoft, Google and numer­ous oth­ers eye­ing the prize. No­body pushes old-world me­dia houses over the edge of dig­i­tal con­ver­gence quite as con­vinc­ingly as Ap­ple, how­ever. The ex­per­i­ment, which started with the Ap­ple TV com­mer­cial prod­uct some years ago, is set for a gi­ant leap.

Ap­ple has also been mov­ing to crys­talise the global mar­ket for dig­i­tal down­loads with its iTunes Store. Even in South Africa – the arse of the In­ter­net – Ap­ple sells movies, mu­sic and apps in lo­cal cur­rency. So when the next big thing for con­tent rolls out of Ap­ple’s garage, it will go global from day one.

An­other favourite ru­mour is that Ap­ple is pre­par­ing its ad­vance into the wear­able com­put­ing space, set to be­come a bil­lion-dol­lar in­dus­try over the next three years. Google has stolen the spot­light with its Project Glass that will prob­a­bly be a bona fide prod­uct by this time next year. Where other com­pa­nies ex­per­i­ment in the open you can be sure Ap­ple is pre­par­ing some­thing be­hind the cur­tain. Ap­ple’s first wear­able iDe­vice may not be a pair of reti­napro­ject­ing glasses, how­ever, as many an­a­lysts have sug­gested Cu­per­tino – the home of Ap­ple – will first re­lease a watch.

There’s not much to go on here. The pre­vi­ous ver­sion of the iPod Nano me­dia player was square and tiny enough to serve as a watch face. Ac­ces­sories that pro­vided the straps soon be­gan sell­ing and Ap­ple fu­elled the fire with clock-faces in the soft­ware on the de­vice. Then came the next re­vi­sion of the prod­uct, and Ap­ple cu­ri­ously ended the game by chang­ing the shape of the Nano back to some­thing more elon­gated and im­pos­si­ble to place on an arm. The next log­i­cal step is not a tough one to take – but what could an Ap­ple watch pos­si­ble con­tain that would bring about the next ma­jor dis­rup­tion in con­sumer elec­tron­ics?

Be­fore you shrug off the no­tion, re­mem­ber that a sim­i­lar ques­tion could be asked of mo­bile phones be­fore the iPhone and no­body knew what to ex­pect of the iPad. In both cases we got fire­works.

What­ever Ap­ple’s next big thing will be is likely to emerge this year, and the first round of an­nounce­ments is set for March. So if you be­lieve, then Ap­ple at $440 is look­ing ap­peal­ing. If naysay­ers are right that Ap­ple’s day has come and gone, how­ever, then pre­pare for more dis­il­lu­sion­ment and a share price in the $200s.

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