As Apple (AAPL) investors prepare to listen in on the Q4 conference call, I want to give you some big picture things to think about. The most important thing you will hear in the call concerns the progress of the App Store. Apple’s App Store has opened up a can of worms that will define the 2010-2020 decade. Online distribution of content and software will quickly become the only way to distribute. 24 months from now we will laugh about how we used to cut down trees to print newspapers that were hand delivered to our homes. How archaic. The fact that all major newspapers and magazines are offering apps through the Apple ecosystem cements the future success of Apple’s Tablet device as the digital solution to the bygone era of print media. This part is easy to see coming but what else should we prepare ourselves for? What’s coming in 2011 or 2012?
The fundamental purpose of Apple hardware will change. The biggest money making opportunity on planet earth is the current opportunity to build products that properly utilize apps. The key to innovation will be to figure out how to effectively merge multiple functions onto a single device. The iPhone is the perfect example. It filled so many needs through seamless integration. The Tablet will do the same.
What’s next? It will be Apple TV. Most analysts assume that Apple’s focus with Apple TV is to get movies and television shows from iTunes into the living room. They’re waiting for Apple to revolutionize the industry in the same way they revolutionized the music industry. Stop holding your breath. It’s not going to happen. I don’t think Steve Jobs cares one bit about digital movie distribution. It’s already widely available and people still don’t care for the technology. There’s a reason why after three years of Apple TV it’s still ‘just a hobby’ for Apple. The future purpose of Apple TV will be to get the App Store into the living room. Apple is about to do to the gaming industry what they did to the music industry. They will grow market share while cutting margins. Additionally, apps specially built for the television will customize our social networking interaction in the living room. Instead on being just a one way viewing device, the television will become the hub for socializing with friends and family. Living in a true global neighborhood is right around the corner.
What other hardware can be built to utilize the offerings from the App Store? You’re only limited by your imagination. Apple’s developer kit allows software to customize and infiltrate every aspect of our lives. And it’s all closed to outsiders thanks to Steve Jobs’ insistence that Apple build and control everything. The trend of relying on apps has just begun. Right now the popular phrase in commercials is ‘there’s an app for that’. Soon the phrase will evolve into ‘there’s a device for that’. The iPhone, the Tablet, and the Apple TV are just three with more to come. An Apple revolution is going to take place in 2010-2020. It will make Microsoft's (MSFT) dominance of the last 25 years look remedial. By shutting out competition to their OS, Apple is the one and only company able to build the needed hardware. For more to come check out applerevolution.com. It's coming.
Disclosure: Long AAPL.