Let’s play a little game. If you were Timothy D. Cook, Apple’s chief executive, and you could have any gadget in the world that you wanted, what would it be? Forget that such a gadget doesn’t exist yet. Remember, you’re the chief executive. of Apple — you can just pick up your iPhone 10, scroll down to Jony Ive’s number and tell him to build you an iThingamajig.
So, what is it? A new iPhone with a double-sided screen? A 160-inch Apple television? (Too small? Maybe 260 inches?) An iWatch? Maybe you want an Apple-branded car?
I’m sure we could play this game till the iCows come home. Meanwhile, a lot of investors seem to be asking themselves this question, especially after Apple’s earnings report on Monday.
Apple reported sales of 51 million iPhones during the last quarter (the most it has sold in any quarter), in addition to sales of 26 million iPads and 4.8 million Mac computers, both well above previous quarters.
But Wall Street scoffed at those numbers — the company’s stock has fallen by $40 billion since Monday — partly because profits were flat and the numbers didn’t hit analysts’ expectations.
And there’s worry that sales of the company’s main products could be on the verge of slowing.
A report released this week by the Consumer Electronics Association found that the sale of tablets, including the Apple iPad, is starting to show some saturation in the marketplace.
IDC, the market research firm, echoed the finding. “It’s becoming increasingly clear that markets such as the U.S. are reaching high levels of consumer saturation,” IDC analyst Tom Mainelli wrote in a recent report. Regarding Apple, Mr. Mainelli said the latest “numbers bring into focus the challenges the company faces as it attempts to grow its tablet business.”
Then there’s the Apple iPod, which Mr. Cook admitted this week was “a declining business.” Apple sold six million iPods in the last quarter, a 52 percent decline compared with the same time a year earlier.
Investors also exited the stock this week for another reason. Wall Street, and customers, have been waiting and waiting and waiting for an entirely new product category from Apple. You know, an iThingamajig.
In March 2012, Mr. Cook said Apple’s pipeline was “full of stuff.” In May 2012, he said “the juices are flowing,” at Apple and “we have some incredible things coming out.” Then in an April 2013 earnings call, Mr. Cook said that there was “the potential of exciting new product categories,” and that “we’ve got a lot more surprises in the works.” Again this week he promised a new product category.
But we still haven’t seen it. It’s like listening to your friend at the bar say he can pop a beer cap off with his teeth, but he keeps using a bottle opener.
“I do think that investors get emotional about when are we going to get the big new high-growth category from Apple,” said Frank E. Gillett, a principal analyst at Forrester Research, in a phone interview.
Mr. Gillett said analysts have explored the idea of Apple’s making some sort of frame that can interact with an iPhone, or multiple iPhones, and act as a sort of smart screen. “It would be the kind of thing a group of people would gather around to watch a YouTube video, but not a full-length movie,” he said.
Or, Apple could build technologies for the home and office, he said, “things that are associated with a place rather than a person.” An example would be a fixed video-conferencing system — maybe even an early version of the holodeck I wrote about this past week.
Apple could be working on a number of new technologies that could stretch the boundaries of its current products. There have been rumors of watches and other wearable computers, and even products that fall completely outside Apple’s traditional purview.
As I noted during the Apple and Samsung trial in 2012, Philip W. Schiller, Apple’s senior vice president of worldwide product marketing, said that before the company started working on the iPhone, executives explored a number of other new categories, including an Apple camera or even a car.
One thing is clear: The company will need to come through on its promise for an entirely new product in the coming months, because if it doesn’t, investors and customers will be holding one person accountable: Mr. Cook, the C.E.O. who can make a decision about that new iThingamajig.
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