The historical precedent set by Apple in launching the iPod, iPhone and then iPad demands a level of greatness in their next series of product launches. The glue that traverses all iOS devices to date has been iTunes, with iOS the underlying software loaded onto the devices themselves. In this way, the last decade for Apple could be seen as one long path, building it slowly from device to device. Since the launch of the iPad in 2010, the world has clamoured for more, and now as of June 2014, we await with high anticipation at the next big thing from Cupertino.
Apple has for a while now given the world media tantalizingly few words on an official response beyond – future devices will be announced in the later half of 2014. The latest reports and rumours surround a smart watch device. Dubbed an ‘iWatch’ by some, Apple will play out its well versed behaviour – whilst Samsung was the first to market in pure innovation, Apple often works silently behind the scenes in perfecting a more mature product design, building upon the Samsung evolution. Apple can afford to bide its time – after all, with billions of dollars continuing to be generated in revenue, its not like there is any need to rush.
The clues that point to the likely capability of an iWatch-type device were seeds sown at WWDC 2014, where HealthKit and HomeKit were new API additions to iOS 8. They pave the way for greater integration of health monitoring and smart home applications direct in our iOS devices, including the future wearable form-factor devices. An additional clue is in the iOS 8 and Yosemite capabilities concerning AirPlay and even greater inter-device connectivity. You can imagine how this will enable greater interaction via the iWatch/wearable device.
As suggested in the article Is the fitness-tracking device trend over? the fact that the likes of Nike are shifting their focus away manufacturing a single-purpose device is yet another sign of how the health/fitness market is about to evolve. If not because of Apple, even without the official launch, other companies like Samsung, Sony and Google are all beginning to shape the destiny of fitness devices. Whilst the last 12 months (2013-2014) have seen the growing popularity of Fitbit, this wave of single-purpose devices will likely evolve and decline as the juggernaut of smartphone/devices swallows them up and the health/fitness monitoring function becomes another capability within the consumer electronic device. The future of remote controls may also be subsumed if further integration and enhancement plays out in the home entertainment arena.
Already, there are tangible signs of Apple’s growing influence in the car industry, with talk of iOS integration into car media entertainment systems already in-flight. Collectively, these expansions demonstrate the power of manufacturers like Apple to grow and diversify the ways in which their technology can be adapted, expanded and put to use. Whilst it is important for new hardware options to enter the market, the true growth opportunities to Apple lie in their software potential. Whilst it doesn’t receive a lot of attention because of the much higher publicity surrounding iPhone and iPad sales revenue, the software division and distinct revenue line is not easily dismissed. Indeed, as a standalone business, Apple’s software generated $4.4B for Q1 2014. Extrapolated into ~$16B for a year – that would make it a top player in the software industry. Further, the revenue potential is even greater when you consider that various product lines such as the core iOS/OSX are not actual revenue-generating products.
Apple’s financial success is often the subject of Wall Street analysts; particularly with the whole pattern of earnings’ forecasts which sets expectation levels. The danger is for companies like Apple to become focused and motivated by the short-term metrics demanded by Wall Street. In many ways, Apple continually demonstrates they have a long-term focus and drive – with the share buyback scheme, commitment not just to innovation, but also the environment and safe working practices. In one sense, like country-level macroeconomics, as Apple grows larger and larger, the ability to generate record levels of revenue and profit diminish over time. The huge % year-on-year increases in both financial metrics would require an impossibly large demand for multiple products lines – and the likelihood of Apple launching multiple new products is simply a path not likely to eventuate given the logistical requirements to support such an effort. Apple has demonstrated in the last year it is highly capable of maintaining multiple focuses – with the number of product line upgrades announced throughout 2013, so it is a possibility that Apple could announce to market several new product developments later in 2014. This possibility is also feasible if the target markets of each product line are sufficiently unique and distinct, such that market confusion and self-cannibalisation is minimised.
For example, the announcement of an iWatch-type device, along with an official next generation AppleTV device could be more complementary than contradictory; consumers are not likely to choose one over the other because of functional overlap. The purpose and function of the iPad compared to iPhone is much closer in comparison, as is the iPod – iPhone combination. An iWatch – iPod comparison would likely have these ingredients for potential functional overlap and consumer choice dilemma.
Over the years, the advent of the smartphone and tablet (iPhone and iPad respectively) has led to the direct demise of the following single-use products, some of which continue to exist as niche products fulfilling a high-end feature demand:
- Music players
- Non-smartphone mobiles
- Alarm clocks
- GPS devices
- Record/note taking devices
- Video recorders
- Handheld game consoles
Remotes and health/fitness monitoring devices may be added to this list in the not too distant future!