Apple’s Prospects: Not Necessarily About Apple’s Financials

January 24th, 2012

Knowing that Apple’s earnings for the last financial quarter will be posted hours after this article is published, I won’t hazard a guess as to how the numbers will turn out. Instead I’m going to look a bit closer at the products and services you might see from Apple over the coming year. But understand that, if I go off the deep end and come up with anything a tad outrageous, so be it, although I think my observations are on the conservative side of the ledger.

In recent days, there have been published reports that Apple will, in the next few months, release new Wi-Fi hardware to support the burgeoning 802.11ac standard. Although the standard won’t be ratified until the second half of the year, that won’t stop manufacturers from releasing hardware based on the preliminary specs. Supposedly they will all be upgradeable via firmware to the release version.

Now 802.11ac, or “Gigabit Wi-Fi,” supposedly boosts existing wireless networking to roughly three times what you get now. That will take it within the range of today’s gigabit Ethernet, which, in effect, means you may not have to worry about installing unsightly wires anymore to get maximum file transfer speeds. Well, at least if you have hardware that supports the new standard.

At first, Apple will likely add 802.11ac draft standard capability to new Macs, and introduce an updated AirPort Extreme and Time Capsule. The iPad and iPhone will come later, since it will probably take a while to build power efficient chips and antenna systems that will exploit the new performance levels on such tiny gear. At the same time, whether you’d actually benefit all that much from 802.11ac in a mobile device is a huge question mark.

Since Apple is expected to introduce new Macs this spring to coincide with the release of Intel’s Ivy Bridge processors, that might be the ideal time to add 802.11ac to the mix. You can probably expect new Wi-Fi hardware from Cisco and other makers of network hardware in a similar timeframe.

If the next generation of Apple mobile processors, which some refer to as the A6, is truly a quad-core chip, I suppose there’s an outside possibility of a future MacBook Air incorporating an ARM-based CPU. However, there would have to be a hardware-based translation layer to allow you to continue to use your existing Mac software without modification. Remember that Microsoft is porting Windows 8 to ARM, and they will confront the same dilemma, which means regular Windows software just won’t run. I suppose it’s always possible for Apple to consider AMD as a processor alternative for something other than graphics chips, but it doesn’t seem as if a great amount of money would be saved, nor is AMD necessarily as competitive with Intel as they used to be.

The rest of the year seems awfully predictable at this point. The mid-year WWDC will deliver news of iOS 6, though the upgrade may be more incremental than in previous years, since the system has really matured. But Apple could still upset your expectations, so don’t assume anything. On the other hand, the chances that Apple will reveal preliminary details about Mac OS 10.8 are slim, but, assuming the recent two-year release cycle, it’s not out of the question. The actual release would come in the summer of 2013. But don’t be surprised if those announcements and a media event to demonstrate the new features of Lion’s successor don’t happen until fall or early the following year.

I’m less certain as to how Apple will deal with Apple TV and the expected arrival of a large screen integrated TV set. I’ve been skeptical about the prospects for a variety of reasons, particularly if Apple reaches a content deal that involves streaming content, since it will put many of you in danger of exceeding your ISP’s bandwidth caps. On the other hand, there are areas where Apple can make a difference in the TV space, particularly when it comes with dealing with programming from multiple providers and managing various hardware components.

Depending on how well Apple does in its quarterly financials, you can probably look for clues about how new product introductions might turn out. So if iPad sales are in the middle or lower end of the expected range, perhaps because of the perceived success of the Amazon Kindle Fire, Apple might well keep the iPad 2 in the lineup at a lower price. So for those who regard the iPad 3 (and I presume that will be the product’s name) as a tad expensive might just buy the previous model; that strategy has succeeded tremendously with the iPhone. Certainly if large numbers of customers were able to accept the Fire, which is inferior to the iPad in so many ways, a lower-priced iPad might be just the ticket.

But Apple’s biggest problem these days is in meeting all those inflated expectations. In the past, Apple’s sales tended to be underestimated. However, in the September quarter, iPhone sales were less than expected. The question will always be asked: How does Apple top that? This is an impossible goal to achieve, even for a company with Apple’s stellar successes. There has to be a point where growth will level off somewhat, and where their “next great thing” isn’t as great as some might hope. On the other hand, Apple has confounded the nasty negativists before. They can still amaze us.

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4 Responses to “Apple’s Prospects: Not Necessarily About Apple’s Financials”

  1. Sean says:

    “How does Apple top that? This is an impossible goal to achieve, even for a company with Apple’s stellar successes.”

    I guess after those earnings this sentence is pretty much moot. Apple makes a “profit” of a Billion dollars a week now.

  2. immovableobject says:

    I’m a huge Apple fan, but I wouldn’t gloat too much. While Apple has certainly come a long way from its beleaguered past, hatred of all things Apple is well-entrenched within corporate IT departments. Apple will never fully cater to their whims the way the Wintel industry has. Therefore, Microsoft will dominate the enterprise OS desktop and server markets for a long time to come. MS Office will continue to be the defacto business productivity suite.

    Apple will make inroads here and there, particularly with end-user consumers. Ideally we can hope for increasing cooperation and interconnectivity.

    Although Apple currently has a lead in penetrating businesses with iOS (the iPhone and iPad), Microsoft could still come from behind using its control of Windows to offer PC to mobile integration features that Apple can’t match.

  3. Shameer M. says:

    “MS Office will continue to be the defacto business productivity suite.”

    This sentence is the key in your entire post. As long as 1 billion users (this includes consumers & business) worldwide rely on MS Office to create, share, & collaborate on documents, MS’ place stranglehold in business will hardly see a dent. Plus the fact that Office integrates beautifully with MS’ server offerings (ie: Sharepoint & Exchange).

    Unless MS creates a version of Office for iOS or Apple suddenly comes out with a version of iWork that matches or betters Office’s capabilities, I see Windows still remaining dominant in businesses. That’s not to say Apple won’t be successful in businesses but nowhere near the extent that MS is.

    I realize Apple fans will say MS makes a version of Office for the Mac but that version is still not as capable as Office 2010 for Windows. Even Tim Cooke, when asked about the mobile space, said it is not a two-horse race and not to count MS out, not in those exact words but that was the gist of it.

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