To say that Apple has done well in the personal computer industry would be a vast understatement. The Mac is the most profitable of all personal computer lines.
That said, it’s the iPhone’s massive sales numbers that has filled the company’s coffers with almost untold riches. So, how does Apple consider the tablet market? And, what’s next?
Mother Of All Markets
There’s little doubt that the personal computer market is huge. Hundreds of millions are sold each year. Even without growth, the replacement market is huge.
Smart phones may be a larger market than personal computers, and the iPhone is merely one of many of Apple’s cash cows.
Even the iPad, barely three years old as a device, already provides more revenue for Apple than the Mac.
That explains why CEO Tim Cook calls the tablet market as something special. At the Goldman Sachs technology conference Cook pointed out the obvious.
I think this is going to be the mother of all markets. And customers are voting and they’re buying.
Without question, customers are voting and they’re buying and it’s Apple that walks away with the lion’s share of sales in units and profits.
What is the tablet market the mother of all markets? It may very well be the product that eclipses Apple’s profit dominating iPhone market. Every child of school age can use a tablet, but not all will have access or be able to afford an iPhone.
The price points between iPhone and iPad are different; substantially so. That makes the iPad more affordable, and for certain segments of the population, more usable, and more attractive.
Virtually everyone in the adult class that has an iPad also has a personal computer; Mac or PC. And, now, many smart phone users find a need the iPad solves better than an iPhone.
On the surface, it would appear that Apple’s next few years are set– only Apple has a profit chair with four very profitable legs. Wall Street, though, is much about ‘what have you done for me lately?‘ and, frankly, Apple hasn’t done much since the iPad.
New Worlds To Conquer
Just as Microsoft remains enormously profitable with Windows and Office, Apple will continue to roll along on the strength of Mac, iPhone, iPad, and the iTunes ecosystem. But what’s next?
A billion dollar annual business might be the dream of many startups, but to Apple, a billion dollars is chump change, a rounding error, an afterthought. What the company wants to do is find the next insanely great thing.
What’s left on the horizon that could help fill Apple’s hungry coffers, and fend of the beast of Wall Street? An Apple watch which integrates to iPhone? An Apple video-on-demand service that streams any video, from television to movie, straight to the masses, via the Apple TV (or any Apple iDevice)?
Apple’s stock price and reputation in the market are being damaged by the very methods and procedures that make the company great. Innovation and relentless iteration. Every few years (but not clockwork), Apple launches a disruptive technology and two things happen. The pundits laugh and criticize. The customers stand in line to buy.
After that, Apple goes into iteration mode, continually refining and expanding the disrupting technology, while cranking out the units and collecting the profits. What I expect to see happen, and soon, is the growth of Apple TV– with more content options and more applications. Apple TV has been, and will continue to be criticized but may quickly become the dominant alternative to cable and network television.
It wasn’t that long ago when I called the iWatch Apple’s next insanely great thing. A watch might be somewhat passé for a younger generation, but watches still sell in huge numbers. They’re practical and a fashion statement. And most of us have more than one watch.
Apple is in the process of conquering ‘the mother of all markets’ with the iPad and iTunes ecosystem, but down the road is television and wearable items (accessories and clothing) that could result in even larger growth, and more riches for our hubris-laden Cupertino company.
About Kate MacKenzie
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