Apple iTV? The iWatch? Bigger iPhones and iPads?
Rumor-mongering about such mythical products is a regular spectator sport for many Apple watchers.
But after the company said it could post a year-over-year decline in revenue this fiscal year for the first time since 2002, such conjecturing is turning into high-octane pressure for the company to do something, anything, to reboot growth.
“Apple needs to have more products it can sell into its high-priced customer base,” said Colin Gillis, an analyst at BGC Partners.
Concerns about the weak outlook for iPhone growth sent Apple’s stock plunging last week after the company reported disappointing fiscal first-quarter earnings. Apple sold 51 million iPhones over the holiday quarter, a record, but also less than the 55 million units analysts had predicted.
More ominous for many investors, though, was a lower-than-expected projection for revenue in the current quarter. Though Apple said there were technical reasons behind its guidance, such as changes in inventory and accounting for revenue, analysts had still assumed that a deal to sell the iPhone through China Mobile, the world’s largest carrier, would give Apple a boost.
Instead, analysts wondered whether the disappointing outlook was part of a broader signal that the smartphone market, especially the high end that Apple dominates, is becoming saturated. Indeed, rival Samsung also recently reported disappointing sales, and Verizon Wireless also said smartphone activations were slowing.
“Apple is fighting an uphill battle in this market,” said Brian White, an analyst at Cantor Fitzgerald. “The smartphone market overall is having problems.”
Considering that Apple still makes most of its profits and revenue from the iPhone, the potential for such a slowdown is troubling. As a result, analysts increasingly believe that a dramatic overhaul of existing products, or entering a new product category, is essential if Apple wants to keep growing.
One option for Apple may be to adjust the size of its iPhones.
Rumors have Apple working on an iPhone with screens as big as 4.7 inches, and possibly an iPhone/iPad hybrid with a 5.7-inch screen. Either gadget would be bigger than the current 4-inch screen on the iPhone 5S and 5C, and a nod toward the growing popularity of larger smartphones around the world.
Talk of an iWatch has cooled after running hot much of last year, though many observers believe it’s natural for Apple to get into the wearables business as a way to extend its ecosystem of products.
But following the earnings release Monday, signals of an update to the Apple TV digital receiver seemed to get louder when the company refreshed its online store to include the gadget as a stand-alone category for the first time. That places it alongside the iPhone, iPad, Macs and the iPod in prominence.
