Is Apple’s innovation genius all in the rear-view window?
The company is in danger of becoming just another price-battling electronics maker if it does not come up with a big new product, according to USA Today.
This month marks three years since Apple rolled out it last industry-altering invention — the iPad tablet.
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In the meantime, competitors are gaining. Low-cost alternatives are making inroads in China and elsewhere, while the U.S. market is saturated with Apple’s bellwether iPhone.
Many observers are convinced an Apple TV is next up in the product lineup, but not everyone agrees, USA Today reported.
Both studios and cable providers would rather develop their own TV business models rather than ally themselves with Apple, according to Keith Bachman of BMO Capital Markets.
Charles Wolfe, an analyst at Needham & Co., is also skeptical. “I frankly would be surprised if they launched a TV. The economics of a TV are so difficult. It’s low-margin; the upgrade cycle is really slow,” he told USA Today.
Apple’s future growth prospects will be no clearer when the company reports first-quarter earnings on Jan. 23.
Apple’s shares have sagged over 25 percent since hitting an all-time high of $705.07 in September. By midday Tuesday, Apple fell $18 to $484, its third daily drop. The stock hasn't closed below $500 in almost a year.
Without a new invention, the company must sell an ever-increasing number of iPhones and iPads — a very tall order when they have already sold so many.
“They’ve had such a fabulous run. It just hard to sustain such growth once you get that big,” said Richard Sloan, a University of California, Berkeley professor.
“Everyone thinks this is going to be a flat quarter.”
As Apple’s reputation as a fast-growing company is ebbing, growth funds are reducing their holdings of the stock, apparently becoming replaced by value funds, the newspaper said.
S&P Capital IQ estimated the company would earn $13.46 a share in the December 2012 quarter, down 3 percent from $13.87 in the same quarter last year.
The Wall Street Journal reported this week that its sources said Apple has recently trimmed orders significantly for iPhone components because of slow demand.
Meanwhile, PC Magazine reported Samsung has hit sales of 100 million units for its Galaxy S smartphones, which compete with the iPhone.
Editor's Note: This Wasn’t an Accident — Experts Testify on Financial Meltdown
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