For the better half of the last year Wall Street has been abuzz about Apple losing its luster. It seems like an eternity ago when Apple’s stock price was hovering around the $700 mark. A slow first 8 months of 2013 product wise caused the stock to briefly slip under the $400 mark. Then, to the delight of Apple shareholders everywhere, came news of billionaire investor Carl Icahn and his reported 1 billion dollar stake in Apple. The long elusive $500 mark was hit today, before closing just shy of it. Here are 3 reasons why all the doom and gloom around Apple’s long term viability is terribly shortsighted:
1. iWatch.There is overwhelming evidence that Apple will foray into the wearable technology market sometime in 2014. Investors have long clambered for a new revenue stream for long term sustainable growth. They won’t be the first to market (Pebble), or likely even beat frenemy Samsung to the punch, but that doesn’t mean they can’t be successful. A simplified iOS, multiple day battery life, and a heavyweight fitness tracking partner like Nike could spell the most polished product once it hits the market. As someone who owns and generally really enjoys his Nike FuelBand (review to come), a smart watch capable of running apps is definitely something I’d be interested in purchasing.
2. iTV. Apple’s self proclaimed “hobby” is its Apple TV set top box. I first purchased a 2nd generation model in late 2011. Back then it offered quite a bit of functionality, not the least of which was giving me a way to binge watch seasons of TV shows days at a time. I never would have considered chord cutting at this time but a few recent developments have caused me to rethink this stance. A few months back two new apps were released for the Apple TV, Watch ESPN and HBOGo. Although my current cable plan doesn’t include “The Mothership” I am able to access the app with the help of some generous password sharing relatives. I can watch anything that is currently live on ESPN without any problems. It’s only a matter of time before more apps like these are offered on the Apple TV. While there is a lot of talk about Apple coming up with a hardware TV set with possible 4K support and Siri integration, content is still king and a model like Hulu Plus, where you can’t skip commercials seems likely. If Apple can ever come to terms with enough content providers an “iTV” could be the next revolutionary product investors have been yearning for.
3. Cashpile.Even with the perception that they aren’t innovating like they used to, Apple still has an absurd amount of cash. At last check somewhere around $148 billion. While this certainly doesn’t mean they will spend the money wisely, a case can be made that they should be able to acquire any talent or company that they choose without being outbid. Analysts have been expecting a big splash acquisition for years but a more prudent move may be to strengthen perceived areas of weakness. A lot of the market’s unrest seems to have arisen from the overblown but still weak product that is Apple Maps. iOS 7 seems to be a step in the right direction but it still might not be enough to sway hard cores from abandoning beloved navigation apps like Google Maps and Waze. Apple is in a position to use some cash to improve existing products while also retaining some of the best talent in Silicon Valley, Steve Job’s so called ‘A’ players.
While it faces some stiff competition, Apple is still primed to be a huge player in the tech world for years to come. The likes of Samsung and Android will continue to be major threats to Apple’s bottom line but the culture put into place at Apple will not just simply crumble under the weight of one trying year. With talented executives like Tim Cook, Sir Jony Ive, and this years WWDC standout, Craig Federighi, both Apple’s stock, and more importantly its products are in good hands.