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Apple (NASDAQ:AAPL) has been a perfect example of innovation. Apple's iPhone changed the way we used to think about the cell phone market. Surely, we had several different models of cell phones, but none of them looked like the iPhone. After this radical innovation, Apple did not stop its search for better phones. Apple re-shaped the industry with new phone models based on the original concept: iPhone 3G, iPhone 3G S, iPhone 4G, iPhone 4S…The iPad concept was also a huge success. Apple sold near 9.25 million iPads in the last quarter.

I think this year we will see an updated iPhone 5 which will probably have a faster processor and a larger screen. We might also see an iPad 3, which is rumored to be thinner, lighter, and safer. I also expect that Apple's MacBook series will keep getting updated with upgraded specifications. However, I am expecting radical innovations from Apple for 2012 and beyond. Apple, with minimal competition, has the power of premium-pricing its innovative product lines. Therefore, I expect Apple to come up with products that can re-shape the industry. Namely, I expect the following 4 radical innovations from Apple for 2012 or beyond:

#1 iTV

I am not talking about upgraded Apple TV which is already available in the market for $99. Surely, Apple TV is a great entertainment tool which allows us to stream movies and shows from both iTunes and Netflix (NASDAQ:NFLX) over the internet. However, I am talking about a new television set that looks just like a mega-screen iMac computer. Even a large-size iMac will probably be extremely popular among Apple fans. The product will likely be pretty expensive. But, think about how Sony (NYSE:SNE) used to price its products compared to other manufacturers. Apple has the power to create a new market with premium products. Customers also are willing to pay for this premium.

There are already rumors around iTV that it will be launched in 2012 with a premium price tag. Since 2010, there is a strong expectation on Apple to get into this business. Peter Yared from Venture Beat suggests an Apple-branded TV, "with a lighted Apple logo that comes in sizes ranging from 37″ to 60″. It automatically connects to the Internet and streams all of your iTunes video and audio content."

Apple might better hurry to get into the market first since Google's (NASDAQ:GOOG) acquisition of Motorola might be a move into this segment by the internet giant. Jean-Louis Gassee from the Monday Note expects, "a next-generation Google TV and, quite likely, a Samsung TV set with an integrated Google TV running Android apps and competing with the putative Apple TV." I know several friends who utilize their 27 inch iMacs as a TV player. So, I think an Apple TV is an ultra-high possibility in 2012.

#2 iRadio

The name iRadio is already taken in the virtual world. But, what I have in my mind is more like something that is offered by SiriusXM (NASDAQ:SIRI) satellite radio. So far, Apple has left this area to its software suppliers. The iTunes store offers thousands of podcast applications ranging from BBC Radio Live Player to Last.fm. The problem is the extreme variety and inconvenience in finding the radio station that best fits to your desired style. Apple can charge a nominal monthly fee to offer premium stations that users can listen wherever they travel around the world. (Note that, this iRadio can become a serious threat to SiriusXM in long-term)

Another way Apple can monetize iRadio will be getting involed in revenue sharing agreements with network providers. The additional data services provided by telecommunication companies can be charged to customers bills. Apple can retain a share of these additional charges, boosting, as well as, diversifying its revenue sources. Rumor already has it that Apple is working on its own Radio FM application for iPhone. Gene Munster from Piper Jaffray predicts that, "Apple will furnish a radio in late 2012 or early 2013". The analyst goes on claiming that people are willing to pay more than $1000 for an all-in-one package by Apple instead of putting the parts together. Probably iRadio will be embedded in an all-in-one entertainment center by Apple.

#3 iKindle

Okay. Probably it will not be named as iKindle, but Apple is very likely to come up with its own 7-inch tablet in this year. Amazon's (NASDAQ:AMZN) Kindle Fire has been one of the products most compared to Apple's iPad. Kindle, which is priced at $199, obviously has the price advantage. Apple's cheapest iPad 2 is selling for $499, which is more than double what Kindle users pay. If Amazon's Kindle becomes a highly profitable product, Amazon might come up with its own iPad. It is not a tug-of-war between Apple and Amazon yet, but things might get juicy between these companies in 2012.

If Apple does not hit Amazon first, Amazon might be the first mover into Apple's territory. Therefore, I expect Apple to show its superior pricing power, and hit the Amazon's Kindle with a revolutionary product of its own. There are already talks of a mini iPad model to compete with Amazon Kindle. A recent report from Digitimes claims that the supply chain for iKindle is already on the move. While their sources are not very clear, it is claimed that Apple is in the process of ordering 7.85 inch panels from LG Display and AU Optronics.

# iDouble

I know this sounds too imaginary, and it probably is, but you will never know. You might be wondering what is iDouble. It sounds like a double burger from McDonald's (NYSE:MCD). Right? Well, there is a similarity between iDouble and McDonald's double burger. Just as double-burger is among McDonald's most profitable products, iDouble could be a huge profit booster for Apple.

What I have in my mind is a dual-screen notebook or iPad from Apple. The product will have two active sides, each of which can be used as a screen. I would expect the screens to be flexible, so that they can be folded side-ways or used as such. A revolutionary product as such can easily be priced with a pretty high premium. Given Apple's net profit margin of 24%, the higher prices will result in significantly higher profits.

Toshiba has already revealed a dual-screen tablet PC in 2010, but it did not receive much publicity. But, again that was a Toshiba. If Apple does the same, I think fans will wait for days in front of the stores before the iDouble hits the shelves. There are already several websites that explain how to use the new AirPlay mirroring functionality. Thus, there is a huge interest in dual-screen functionalities. While I do not expect iDouble soon, I think the popularity of these mirroring applications might induce Apple executives to get involved in the dual-screen market niche.

Disclosure: I am long AAPL.

Source: 4 Products That Can Be Added To Apple's Pipeline In 2012 And Beyond