Wednesday, April 21, 2010

What kind of company is Apple?

I was reading Apple's quarterly report. For the first time, iPhones are the largest part of their business. The details are:

$4.45-billion - computers (Macintoshes, MacBooks, Xservers, etc.)
$4.56-billion - iPods, iTunes store, etc.
$5.58-billion - iPhones etc.
$1.10-billion - other

Apple started out as a "computer" company. Then, as their iPod sales surpassed their computer sales, they became an "entertainment" company that also made computers. Now they are a "mobile phone" company that also makes computers and entertainment products.

This is also the first time iPhone sales have surpassed BlackBerry's. The latest report from Research in Motion (RIM), maker of the BlackBerry, was $4.08-billion for the entire company. The iPhone has long outsold Palm's as well. That's interesting because Palm and BlackBerry were the original "smartphone" companies, and Apple came late to the market. It's because the iPhone was the first one that really worked, that allowed you to browse the "real internet" rather than a cellphone version of the Internet.

As far as I'm concerned, proper Internet access is no longer a luxury, but a necessity. The market for smartphones is growing, and I bet that Apple's share of that market will remain constant. I bet that this side of their business will be the fastest growing for the next few years. (When I say "I bet", I mean "I've purchased a large chunk of Apple's stock".)

Jobs has promised a new "big thing" for later this year. Does he mean the iPhone 4, or does he have something else up his sleeve. Smart televisions are the next big market. Already, the average big-screen LCD has wifi built in with a video decoder that can pull files from home servers. Yet, televisions are still complex with all the possible inputs and outputs. I think the time is right for Apple's legendary ability to simplify things that people think cannot be simplified and fix this situation. If I had to bet, this is what I would guess as Apple's next-big-thing (which would shift their company back into the entertainment category).

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