Update with CarPlay - Welcome Back, Apple - The Pipeline, The Competition, The New Markets

Update:  Appears that the prediction was spot-on back on 8/20/2013 as to the direction of the iTunes Radio with CarPlay and the iPhone 5c.....Let's see how the iWatch prediction hits the mark.

Apple has given signals that 1) iTunes Radio, 2) iBody (or the iWatch), and 3) iPhone c (Compact) e (emerging) are key foundations for future earnings.

iTunes Radio

The product will ship in 2 phases.  1) 3Q will release an extension that leverages an iPhone, Airplay LITE, and stream through Bluetooth in most high-end cars, 2) An Apple Radio product will ship in 2014 that will OEM and after-market like what Sirius does now.

Sirius will slowly decline in market share through 2014 and 2015 and become a non-player in the market

iBody/iWatch

The biometric feedback device or wearable will measure multiple aspects of the body and connect you with the phone.  Messages will be previewed on the wrist-based device and connect with the iPad and iPhone devices.  In 2014, the iBody device will connect with Android as well.

iPhone c or e

The phone will be smaller and lighter given it will target two markets 1) Teenagers and baby boomers transitioning from the dumb phone, and 2) The India and China markets.  Given these target markets have smaller hands.  The device will be ergonomic and fit the physical needs of the many in that segment.

Let's see how many guesses come true on Sept. 10 th.

Welcome back, Apple

Why Google SOLD Motorola Mobility to Lenovo? Smartphones are a declining market

   With the announcement today from Google that they are selling Motorola Mobility to Lenovo confirms that the Smartphone market is not a growth area.  Lenovo is focused on a race to the bottom of the enterprise space but business smartphones are moving in that area.  The decline of the iPhone revenue further validates the general downward direction of the product space.

   The reason that Google can jettison Motorola so quickly is that the business is not core to the Google revenue model.  For Apple, that is not the case.  By reviewing the acquisitions by Google and the Google Ventures portfolio pipeline, you can see that Google is going in a very strategic set of "blue ocean" new markets.  Apple, on the other hand, must diversify into the iWatch and the iRadio and other ecosystems gradually.

   Google did two strategic moves to hedge against the China Mobile deal.  The first move was to sign an agreement with Samsung for patents and licensing and the second was to partner, essentially, with Lenovo to license the Android and ad platform of Google in exchange for a manufacturing partner in China and, ultimately, an end-destination selling point.

   It appears that without the Steve Jobs' intimidation factor, Apple is not in control of it's destiny.  Bullies are pushing around Apple and it takes an Icahn to be the defender of the company.  Given Cook appealed to AT&T, Verizon, and Sprint to change their carrier plans given the DROP in iPhone says projected going into 2Q2014 raises grave concerns about cash flow until the new product cycles kick-in.

   Google acquired Motorola Mobility to gain access to the valuable patents that it still retains.  After dabbling in the mass market appeal of the Smartphones given Apple-envy, it or rather the Board determined that hardware in the consumer market is not a strategic play given the smartphone marginalization.

So, is the Smartphone DEAD?  No.  Is it GROWING? No.  Is is DECLINING? Yes.

Why Apple is Creating 2 Larger iPhones and the iWatch Connection

Src: Todd Ham

Apple has quietly pre-announced that they will be creating 2 larger iPhones.  The need to create the phones is driven by a US consumer focused on larger.  Strategically, Apple is aligning the pre-release of the information about the larger phones to create a halo effect for the iWatch.   The  wearable is rumored to be a biometric feedback wearable that has a screen and message-based and visual-queue extension of a core Apple device.

An Apple device can be an iPad, iTouch, iPhone, or Shuffle/Nano.  In other words, the core Apple device becomes a new HUB and the iWatch becomes a lightweight device for human interfacing.  For a deeper and detailed experience, you go back to the core device.

A BlueTooth LTE Headset completes the ecosystem.  Given LTE can work about 30+ ft and is a low-power technology that will work with the iWatch, the time is right for a LARGER Apple device - Expect the sizes to focus on the iPad Mini which is just about right.  Too small of a screen and you can't type.

Given the iWatch can be on WiFi to receive data, this opens up a new option to carry around an iWatch to receive calls over the Internet and to leave a traditional Smartphone at home.  The de-coupling of the iPhone from the iWatch will be a feature but the iTunes model of coupling the two products will be part of the 1st Gen of the product.  The halo effect is preserved.

There is a subtle other target segment that Apple is focused on and where Facebook is growing and that is the senior group of 55+.  The need to have a larger font/screen is driving the company to embrace the AARP-crowd.

In this new model, Apple has achieved two goals: 1) Met the needs of the consumer and 2) Created a new ecosystem enablement with a halo effect latch for the iWatch.