Tuesday, January 29, 2008

What's next for Apple?

So for the first time in recent memory, Steve Jobs's RDF failed to take hold at MacWorld. While the MacBook Air looks like a beautiful notebook, it is also a niche product. The compromises that Apple was forced to take to get the product down to its desired thinness insured that the vast majority of people will love to look, but decline to purchase. So the question is, what's next for Apple? The stock price is down 35% from its recent high and questions are now being raised about the sell-through of the iPhone.

Luckily, the future isn't lost, and absent a prolonged recession, I think Apple's near-term pipeline is going to serve it well in the 2nd half of the year. The first two products are relative no-brainers, and the only question is timing. The 3G iPhone has already been confirmed for '08, and a summer launch would do wonders for European/Asian adoption. I also think that the MacBook Air has given us a clear view of the coming MacBook and MacBook Pro revamps. We will see an emphasis on new thin style but without the feature compromises made in the Air. The most interesting new feature will be the larger multitouch trackpad. If Apple can create a compelling new user experience, as they have done with the iPhone, they could accelerate their current marketshare gains.

More interesting than both of the above products is going to be the evolution of the iPod Touch. When announced, it looked like just a derivative of the existing iPhone. However, during the last conference call, Apple gave some broad hints that they see the iPod Touch differently. Calling it a "the first mainstream WiFi mobile platform", Apple is giving clear indications that they see this as a stand-alone product. Future revisions will no longer concentrate on figuring out new ways to present music/videos, but rather on taking advantage of the computing power and internet access that is now possible in a mobile package.

Could this be the long-awaited Apple tablet? Not quite, I anticipate more of a MID that will take full advantage of the flexibility offered by the touchscreen OS in the Touch/iPhone. This is Apple's key advantage over all of its competitors. While iPhone imitators galore are coming to market, I have yet to see or hear of one that comes anywhere near the ease of use or smooth feel of Apple's OS. This is going to serve them well as they expand the Touch into a powerful new mobile computing platform. While there have been some rumors along these lines, I don't think that the Street has discounted even a portion of this new revenue stream. I expect an Apple announcement sometime in the summer/early fall timeframe.

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