Apple's Two-Year Roadmap: Think Cloud Services

| About: Apple Inc. (AAPL)

Apple’s upcoming year is expected to feature upgrades to its existing product line, but the company is expected to prep a bevy of cloud services running into 2012.

According to Piper Jaffray analyst Gene Munster, Apple (NASDAQ:AAPL) won’t enter new categories in 2011. This year will be about harvesting gains from the iPad, iPhone, App Store, Mac and iPod and upgrades.

In 2011, Apple is expected to launch the iPhone at Verizon (NYSE:VZ) in the March quarter with iTunes cloud services also due this year. Munster reckons that the fifth generation iPhone will have NFC (near field communications) technology. NFC allows you to swap data with other devices and use your mobile device for payments.

Munster estimates that a NFC enabled iPhone sets the stage to use your iTunes account as a point-of-purchase tool. Apple has payment information for 160 million active iTunes accounts. That fact means Apple is best suited to turn the iPhone into a wallet.

Going into 2012, Apple will have the stage set for cloud services. Munster writes:

Apple has largely failed in cloud services to date. Its first major push into web services for its connected devices, MobileMe, was riddled with issues surrounding the July 2008 launch. Following the failed launch, MobileMe has improved under new leadership but we believe the service has gained little traction considering the estimated 60.7m active iPhone users (last two years of sale) compared to an estimated 5m MobileMe users. Likewise, Apple has rolled its advertising services platform, iAds, out at a measured pace. But recently, the company made its “Find My iPhone” service free to any iOS user (previously a MobileMe paid service) showing a rising interest in web services for its connected devices. We believe iTunes streaming represents Apple’s largest opportunity in services with an addressable market of 160m iTunes active accounts, each with a real problem that Apple can solve (accessing music on portable devices). We expect to see an iTunes streaming service in 2011, but we expect Apple to continue its focus on web services beyond 2011 in order to leverage the connected nature of its devices. Other web services could include expanded support for document storage in the cloud, or even remote computing capabilities using the cloud to access your Mac and all its files and settings from another Mac (or an iPad) via the cloud.

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