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