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Investors expect to be disappointed. Apple is set to release its latest set of results, and analysts have already pencilled in a fall in net income. Shares have dropped in advance of the earnings, but they are in any case down 30 per cent since September. Regardless of what the results say, I think the markets have got this one wrong.


So far it’s pretty predictable. Apple is an innovator. Its continued growth depends on it continuing to innovate. But in the world of smart phones, I think we have hit something of a barrier. Before the iPhone it was not difficult to imagine all the features that a phone might one day possess. In fact, you only needed to watch the then current James Bond film to get a view of the future of mobile phones. Then the iPhone was released, and things changed.

The truth is that what was considered a high tech piece of wizardry when Piers Brosnan was James Bond now looks old fashioned. The iPhone can now do so much, that it is actually quite hard to work out what is missing.

I am not saying it can’t be improved, of course it can, but we are now at the bit by bit stage of development in the smart phones business. A few years ago, we saw a massive leap, but now the changes are incremental.

Apple is good at leaps, but in the world of incremental changes it is just one of many. Samsung, HTC, Amazon are all eating into Apple’s slice of the pie. For what it’s worth I think the smart phone business has more growth in it, especially as prices fall a little and markets in the developed world really explode, but I would say the golden days of the smart phone growth are over for Apple.

The next big game changer in the smart phone business may be fold up screens, phones you can literally fold up and put in your back pocket, or in your wallet/purse. I have no idea whether Apple is likely to be a pioneer in that field.

The iPad may represent a better opportunity. I think the markets are underestimating the rate at which the tablet market is set to grow. But, just as is the case with smart phones, we are past the big innovation stage. We are into incremental changes. Apple is one player among many.

For me, Internet TV is far more interesting.  I can see how, with the right product, this may be subject to the kind of growth we have seen in smart phones.

An innovation that got me thinking is the download feature on BBCi Player. Have you tried it out yet? Rather than stream a TV show, you download it, and watch it when you are ready. You can watch it on the train, you can watch it whenever you like. You don’t need to be on the Internet. And since the video has been downloaded, there is no buffering. As ever ITV and Channel Four are way behind the game, and have not yet introduced a download feature.  I guess it is just a matter of time.

But I can see how such a feature can benefit an Internet TV.

I see the Internet TV initially replacing the need for digital boxes such as TIVOs. But beyond that they will grow rapidly in popularity. All we need for the Internet TV revolution is the right design, the right hardware, and software applications.

Now cast your mind back to last May, when Jonathan Ive (Apple’s design heavyweight) was in the UK collecting his knighthood. He said: “A lot does seem to come back to the fact that what we’re working on now feels like the most important and the best work we’ve done, and so it would be what we’re working on right now, which of course I can’t tell you about.”

At the time of writing the Apple share price is $500.00 exactly (what are the chances of that?), market cap is $470 billion. At the end of last year, I predicted Apple’s market cap will touch one trillion dollars later this year, and I have not changed my mind.

These views and comments are those of the author alone and do not necessarily reflect the view of The Share Centre, its officers and employees


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  1. Predicting share prices is a dangerous game.

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