Why Apple Should Hang-up On The iPhone, iWear Is Next
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Aside from some end-of-year tax selling and concerns regarding the fiscal cliff, shares of Apple took a brutal beating towards the end of 2012. The reason – there is a broad belief that the company no longer knows how to innovate. But it’s not true. Instead, what has hurt Apple has been the complete opposite.
The company’s 6-month refresh cycle and avalanche of products seems to have backfired – allowing rivals such as Google and Samsung to steal market share. Apple’s “misdirection” with its disappointing map app didn’t help the situation either. For this, CEO Tim Cook offered an apology.
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Consequently, Apple now finds itself in an unfamiliar territory – having to prove itself. Aside from whether or not the company still deserves its status as a market darling, investors want to know what’s next? Apple has the answer – it’s just not saying.
However, for the company to truly move forward as a tech power, Apple should hang-up on the iPhone after one more iteration – presumably the iPhone 6. You might disagree. Granted, the phone is still selling well. However, aside from a different chip and larger screen, the change from the 4S to iPhone 5 was not that significant.
Also, what can Apple add to the iPhone 6 or “5S” that would be appreciably better than the current version? In other words, I don’t think the company wants to go down this line – feeling pressured to excite the Street with each new iteration, especially since margins are beginning to decline. Besides, where will it lead – to the iPhone 10? And then what?
Instead, Apple needs to focus on its TV ambitions, which I’ve said should include the Facebook “like” button. The company should start focusing on ways to dominate the smarthome and the smartcar – perhaps making a bid for a company such as Sirius XM or Pandora. The smartphone market has become too saturate, especially with Research In Motion’s resurgence and Amazon’s entry into the market.
Also, for quite some time, the company has hinted on wearable technology. “It’s time” for the iWatch or its iWear line of devices. This is an area in which Google has already shown interest. And for Apple, this will be the answer to that chronic “what’s next” question. And the company will finally be able to put to rest that other annoying question – can it still innovate?
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Kevin Wu 15 minutes ago
Unless this wearable technology is going to successfully substitute watches, wallets and more, I don’t see an easy barrier of entry. Wearable technology is one thing. Wealth status is another. You’re venturing into a territory that is dominated by many conspicuous products that are treated as a point of juxtaposition which uniquely defines the person. Their glasses, their watch, their pocketbook/clutch/wallet. For example, I have a few watches which I wear. I wear these watches not only for practicality but to display my supposed social status. Unless this new “iwatch” is going to cost me 1,000 dollars, it is honestly not going to appeal to me in terms of helping me attain the goal of wealth status.” Listen, it sounds cute to check your wrist for a facebook update or whatever, but honestly, stop introducing products that is just conspicuous consumption and make people less productive. Because believe me, we don’t need more devices that operate electronically to stick with us. Pretty soon, a thief can steal a phone, tablet, and a new iwatch all off of one person.
Richard Saintvilus, Contributor 9 minutes ago
“Wearable technology is one thing. Wealth status is another.”
Kevin, I didn’t say it would be meant for everyone. Are you suggesting that Rolex and Mercedes should have never existed because their products are restricted to “wealth status?” Wearable technology is inevitable. Apple will be the leader of that market. You already know this.
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F. Scott Fitzgerald once said there are no second acts in American lives. However, after having spent 20 years in the IT industry, serving in various roles from system administration to network engineer (10 of which have been in education), I’ve recently decided that my second act should be as a freelance writer covering the investor's view of the technology industry. My background in engineering gave me what I consider strong analytical skills. My 15 years of trading and investing gives me the experience to #$%$ equities and appraise their value. I am a Warren Buffett disciple that bases investment decisions on the quality of a company's management, its growth prospects, return on equity and price-to-earnings ratio. I employ conservative strategies to increase capital while also keeping a watchful eye on macro-economic events to mitigate downside risk.
The author is a Forbes contributor. The opinions expressed are those of the writer.
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