Whats at the core of Apples next big thing?

Update: 2013-01-30 08:33 GMT
A look at Apple's finances suggests the company that revolutionised the music, computer, smart phone and tablet industries is thriving. Its more than $40 billion in profits for fiscal 2012 were more than any non-oil company has earned ever.

But for Apple, it is a case of "what have you done for me lately", or more to the point, what are you going to do for me in the future?

Last week, skittish investors sent the stock down more than 12 percent, the lowest performance in years, after Apple's quarterly revenue came in below estimates.

There is also concern on Wall Street that Apple lacks the innovation necessary to pull the next big thing out of its hat of industry altering ideas.

Analysts have said in a way, Apple has fallen victim to its own successes.

Since the release of the iPod in 2001, the tech giant has been at the forefront of innovation, dominating each industry it attacks with a product that changed the way the business works.

"The stock today is trading at a level that looks like a massive revenue miss, and like there won't be any new product productions in 2013," said Trip Chowrdy, analyst and managing director at Global Equity Research a California-based firm that examines stock market trends.

Chowrdy, who has closely followed Apple for nearly two decades, said contrary to the stock's recent performance, his research shows 2013 will be a year of significant Apple innovation.

Chowrdy said his firm has obtained information that shows Apple is planning to update its current LCD display screens on all of its next-generation devices using a new technology developed by Japanese electronics maker Sharp called IGZO.

"This technology has displays that are flexible and are 40 percent faster than today's displays and consume 30 percent less power," Chowrdy said.

"It indicates that the new iPhone may be flexible and come in multiple shapes."

But some industry experts believe a new design for the same phone is not enough to get investors excited again.

"A rejigged iPhone is still an iPhone, and won't bring with it the same sort of hype that a new product would generate," said tech writer Adrian Kingsley-Hughes in an article on tech website ZDNet.com.

In a December 2012 article on Barron's website, Barclays Capital's Ben Reitzes said "the company needs to offer something big to improve investors' attitude toward its shares".

And that 30 percent of investors surveyed at a meeting in New York City thought Apple is suffering from a "lapse in innovation".

For years, rumours have circulated as to what Apple's next big thing might be.

Some have speculated a system that links home appliances is on the horizon, while others have said in-car accessories is a market that is begging for the company's innovation.

But according to analysts, an Apple TV set could be the next game changing invention.

"It's definitely the next area where investors are looking in terms of innovation," Brian Colello, a senior equity analyst at Morningstar told NBC News.

Some industry experts point to comments by Apple's founder, the late Steve Jobs, as a hint of what is to come with Apple TV.

In his 2011 authorised biography on Jobs, author Walter Isaacson wrote that Jobs had finally "cracked" the secret to the innovation.

"I'd like to create an integrated TV set that is completely easy to use," Jobs told Isaacson.

"It will have the simplest user interface you could imagine," Jobs added.

According to a Wall Street Journal report, Apple TV would "give viewers the ability to start any show at any time through a digital-video recorder that would store TV shows on the Internet. Viewers even could start a show minutes after it has begun".

In December, Apple's current CEO Tim Cook told NBC that TV is "a market that we see that has been left behind".

Analysts have predicted Apple TV, equipped with email, text messaging and social media integration could launch as early as this fall.

Several Apple retail stores have moved into larger spaces, providing another hint the company plans to roll out larger products, analysts said.

"We believe based on various conversations, this shift is to create space for TV because a TV would need more viewable areas and more space so customers can take a look at it," Chowrdy said.

Chowrdy added Apple's investment in solar technology could indicate an expanded iCloud that includes the streaming of TV shows.

The dichotomy of booming profits and slumping stocks have led to mixed predictions from commentators and analysts on Apple's future.

Apple's chief rivals, including Samsung and Google, have also launched products that have cut into Apple's consumer market, including the Samsung Galaxy S3 which in November ousted Apple as the top selling phone in the world.

"For the first time, every other company has caught up with (Apple) on hardware," said James Altucher, managing director of the asset management firm Formula Capital in a research note for the website Seeking Alpha.

But as tech writer Farhad Manjoo points out in an article for Slate, despite Apple's competition releasing quality products, they could not match Apple's numbers in sales.

For instance, in the final quarter of 2012, according to PCMag.com, the iPhone 5 was ranked the best-selling smartphone in the US.

"Apple's rivals threw everything they could at the firm and still couldn't dent its sales records," Manjoo said.

He added that despite record sales, stockholders were nervous when they learned Apple did not sell as many phones or Macs as analysts initially predicted.

And as investors expect more and analysts continue to raise their standards when it comes to sales predictions, it seems Apple's decades of innovation could be its own worst enemy when attempting to rise to the expectations of Wall Street.

(Sasha Horne writes for RIA Novosti)
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