After a tough 48 hours for one of the world’s most prominent tech companies, Apple Inc. (NASDAQ:AAPL) will already be looking to the future. Reporting flat earnings to the markets and then seeing their share price plummet yesterday and fall still further today is far from ideal for any corporation, even one of the size and statute of Apple. The consumer electronics manufacturer has taken a $40 billion hit in its market value within a matter of 24 hours.
For many companies this would signal a period of damage limitation, but of course Apple Inc. (NASDAQ:AAPL) is so big that such considerations don’t really come into the equation. Rather the company will already be working out how it can regain confidence with investors and shareholders, and show the market that its brief malaise is precisely that. When delivering the lukewarm news for the company, the Apple CEO Tim Cook gave little or no indication as to what the future holds, while engaging in the sort of PR spin that one would expect under the circumstances. You can’t really present your company losing 8 percent of its value in a matter of hours as being a positive, but God knows Apple Inc. (NASDAQ:AAPL)’s PR machine will give it the best shot imaginable.
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Apple to focus on iPhone 6 and iWatch
However, it seems clear that the next twelve months will be focused on two particular premium Apple products, and in ensuring that they achieve a particularly strong market share when released. The first of these is known to pretty much everyone, namely the iPhone 6, and the other has been kept rather more quiet. The iWatch is not a particularly well kept secret in tech circles, but Apple Inc. (NASDAQ:AAPL) have yet to officially confirm that they are even developing this product. But their Q1 earnings may hasten resolve within the company to get this product on the market sooner rather than later, with a possible launch at some point during 2014 now perhaps a distinct possibility.
Cook indicates new niche focus
Although Cook was not particularly forthcoming regarding Apple’s future, during questions from the press he did divulge one particular morsel of information which could have relevance to the iWatch in particular. Cook was asked whether or not Apple Inc. (NASDAQ:AAPL) was intending and on track to move into new product categories in 2014. “Yes. Absolutely,” was Cook’s emphatic response. “Innovation is deeply embedded in everybody here”.
Many will see this as an indication that the iWatch will not become a priority for Apple Inc. (NASDAQ:AAPL) . While this particular niche has yet to really become a big hit with the public, an Apple iWatch would be likely to move the goalposts rather rapidly. And it is also a racing certainty that Apple will have been keeping their eye on Samsung’s move in this area, with a Galaxy smartwatch on the horizon, already rumored to have a curved screen, akin to their forthcoming premium television set.
Smartwatches ripe to take off
All technology goes through the point of being a niche product only coveted by the gadget crazy before later reducing in price and then receiving mainstream market acceptance. That said, not all innovations are taken up by the public. For example, 3D television seems to be dead in the water for the time being, with major broadcasters having already ceased investing in it. It seems now that so-called UHD, which offers four times the detail of HD will be the future of this standard. Thus, there is no guarantee that smartwatches will even become a major marketplace, let alone one that can salvage the fortunes of a mega-corporation such as Apple Inc. (NASDAQ:AAPL). But the ability of the tech giant to put products on the market that have a ‘wow’ factor cannot be underestimated. The original iPod was a beautiful device that instantly captured the public’s imagination and became the genre-defining MP3 player. The iMac range is generally considered to be the most supremely designed series of desktop computers the world has ever seen. The iPad has done more than any other tablet to define and popularise the genre. And the iPhone is still the epitome of smartphone cachet and fashion. Thus, when Apple come out with an iWatch, it seems certain that it will become a coveted item pretty quickly, and efforts to make this a reality may now intensify.
iPhone 6 to come in June?
With the iPhone 6, Apple Inc. (NASDAQ:AAPL) is faced with an entirely different conundrum. Samsung has been snatching buyers away from Apple’s range of smartphones for some time, and the feeling is that the company will struggle to show growth in this area. Apple has made gains in terms of iPhone sales, but other competitors including Samsung, and also encompassing Huawei Technology Co Ltd (SHE:002502), LG Electronics Inc. (KRX:066570) (OTCMKTS:LGEAF) and Lenovo Group Limited (ADR) (OTCMKTS:LNVGY) (HKG:0992), have seen sales rise much more sharply.
While the iPhone 6 will be eagerly anticipated, the balance between affordability and quality is something that Apple Inc. (NASDAQ:AAPL) may need to investigate very closely. Clearly their brand has been built on offering premium, almost achingly stylish products, and they are not going to change that remit. But Apple may have to consider beefing the iPhone 6 up in spec terms, and / or offering it at a cheaper introductory price. Ultimately, Apple Inc. (NASDAQ:AAPL)’s poor results could be great news for tech buyers and Apple fans. We may see an even more desirable iPhone rushed out mid-way through the year, and an Apple smartwatch in 2014 to boot. Watch this space.