Problem is, investors are getting even more restless than they’ve been recently. CEO Tim Cook has promised, and promised again today, that Apple will come out with products in entirely new categories this year.
But while the year is obviously young, we still have no idea whether this product will be a watch or other wearable, a television, a service such as payments, or (less likely) something entirely different.
Apple’s shares are down nearly 8% in after-hours trading, vaporizing almost $40 billion in market value. While that’s not a direct result of the lack of visibility on new products this year, the stock swoon is a direct result of slowing growth and no clear prospect for new products that would change that.
New products are of particular interest not only because Apple’s current product lines, especially the iPod and iPhone that constitute the majority of sales, are seeing waning growth. Even more important, nearly everyone in tech looks to Apple to get new markets rolling. In a very real sense, the technology industry’s health depends heavily on Apple defining the next wave of growth.
Instead, we’re seeing other companies, from Google and Samsung to Nest, coming out with at least nominally Apple-like products that seem to suggest new market possibilities. If some of those wearable computers, thermostats, and smoke detectors take off, that might actually be a good thing. A tech industry overly dependent on one company means an overly volatile tech industry.
Yet all of these products, which some view as the beginnings of an Internet of Things, are still quite nascent. I think that’s in no small part because consumers have come to expect Apple to lead the way–not to come out with the first products, which it usually doesn’t, but to create the first widely accessible and satisfying products or set of products in a new category.
Cook didn’t lack for hints in the conference call. In response to a question about the status of innovation (a veiled and utterly futile attempt to ask about new products without asking about new products), Cook said it’s “never been stronger. I think customers are going to love what we’re going to do.” He added in response to a related question about the possibility of new kinds of phones, “We’re willing to make any product that’s a great product. Our line in the sand is making something that’s not fantastic.” He added, “We’re working on things that are things that you see today, but we’re working things that … you can’t see today.
Later, in response to more blatant (and just as futile) questions about potential new products, Cook at least made it clear that one or more is coming this year: “Yes. Absolutely. No change.”
Finally, he felt the need to make it even more clear that more innovation is indeed coming: “We have zero issue coming up with things we want to do that we can disrupt in a major way. The challenge is always to focus [on] the very few that deserve our full energy.”
Apple has always succeeded, at least during Steve Jobs’ second coming and during Tim Cook’s reign since Jobs died in 2011, by focusing on only the most essential products. But that success will continue only if Apple can turn that focus into actual products–this year–that delight people as much as the iPod, the iPhone, the iPad and the Mac.