Two contrasting views on Apple. Eric Jackson on Forbes says Apple can go to $1650 by end 2015. Edward A. Zabitsky, of Toronto-based ACI Research, quoted in the Sunday Telegraph this weekend says $270 (see also a video discussion here on Apple and smartphones).
What could derail Apple? The question is worth asking if only because it helps pinpoint Apple’s (AAPL) strategic strengths, and many companies can learn from those. But perhaps there is also a weakness, and it might come down to how “social business” evolves.
One part of Zabitsky’s analysis – Apple is able to sell its products at a premium price because of a temporary advantage in content. iTunes/App Store is a good centralised access point for content and lite-functionality. Take away that advantage and you may also take away Apple‘s premium pricing, dragging it into the lower price, high volume market (a place it last visited with the Nano) and a potential scrap with Amazon (AMZN - who also have great content) and other parts of the Android ecosystem (for example Samsung).
I guess by extension he is saying apps are not sustainable as a business model, which presumably means HTML 5 will make apps obsolete (something that featured high on RIM’s wish-list). As good content becomes more available users will go in search of it at other ease-of-use content sites. Zabitksy has Apple on sell.
He acknowledges that Apple’s huge developer community gives Apple several advantages. The developer ecosystem is a huge advocacy group, provides a wider range of apps means than competitors and increasingly seamless use between Apple devices means that new products are quickly leveraged into the market.
As Eric Jackson pointed out it took 6 years to sell 100 million iPhones, but will take only 4 years to sell 100 million iPads so familiarity with the apps world and the UI is helping sell across Apple’s device range.
Translated to a strategic level these advantages are coupled with Apple’s ability, in the Jobs’ years, to make all the right calls on the form factor of its devices. The iPhone, larger than Nokia (NOK) handsets but a revelation for a generation brought up unreadable, barely usable Nokia screens; sector-defining size in the tablet market; great use of miniaturization in the category-defining ultra, the Mac Air.
And the various design advantages, a UI which made smartphones truly a way to access the web. Now a bet on Siri and a voice UI, coupled to Cloud. Prior to that the development of the iTunes/App Store platforms, both capable of dealing with billions of monthly calls, and their integration with their music industry partners (with billing and transparency) and their telco partners.
Add in the development of the service line of business through iTunes, Genius, to video and now file storage, and file sharing and no doubt a dip into the collaboration market.
In the background, for ten years, there has been the development of a largely new operating system.