Three products Apple should make
Apple's stock continues to trade high, and the company's got bank. So what's the next big product? Here's our wish list.
By Robert Holmes, TheStreet
Apple (AAPL) is readying its iPad for store shelves this weekend and a rumored iPhone refresh is in the pipeline, but investors -- now enjoying near-record highs in the stock -- should be looking for the company's next big idea.
Apple's shares jumped earlier this week on a report that the company will update its iPhone product line with a faster, slimmer design that will run on CDMA wireless networks, which could potentially make the iPhone available to Verizon (VZ) customers. Plus, on Saturday, the much-hyped iPad device will go on sale at Apple retail stores and Best Buy (BBY).
Apple has already done a terrific job carving out its niche in the entertainment space: Its iPod and iTunes platforms revolutionized the way people listen to music, and the iPhone has become the de facto leader in the handset space.
But while consumers will welcome greater iPhone availability and are willing to queue up in long lines for the iPad, investors will want to see Apple demonstrate what it's best known for: innovation.
For a company that has said it wants to own the entertainment experience in the living room, Apple still has a long way to go.
Where will the next revolution -- and revenue stream -- come from? With $40 billion in the bank, no debt and no plans for dividends or buybacks, Apple can put money to work on research and development. Apple CEO Steve Jobs said in February that the company needs to do something "big and bold" with its cash in the bank, which offers security to take risks.
Here are the top three products we'd like to see Apple tackle in its quest to become the leading innovator of the entertainment experience.
1. Apple HD-TV: If Apple truly wants to dominate the home entertainment experience, it needs to address the centerpiece of most living rooms: the television.
An Apple-made high-definition TV set doesn't require a lot of imagination; Apple already offers a 30" flat-panel Cinema HD monitor for $1,799, as well as a smaller 24" LED display for $899. An Apple HDTV could be competitively priced at $2,000 for a model bigger than 30" potentially.
Of course, Apple evangelists will eagerly open their wallets for an Apple-branded HDTV. As for skeptics, they could be sold on Internet connectivity that syncs up with iTunes libraries on other home computers, allowing for streaming of music and video and the ability to buy or rent media through the iTunes store.
Last week, Piper Jaffray analyst Gene Munster said he anticipates a $2,000 Internet- and content-connected Apple HDTV to be launched in the next two to four years.
Munster hypothesizes that Apple could deliver a premium all-in-one service with an iTunes TV subscription plan, priced between $50 and $90 a month, allowing Apple HDTV users to ditch their cable or satellite service.
In addition to iTunes pairing, our wish list includes digital-video recorder (DVR) capability and Blu-Ray support -- even though Apple has repeatedly said it has no plans to include the technology in its products.
2. Apple all-in-one set-top box: Even Jobs didn't sound too enthusiastic about Apple TV when he admitted that the idea was a "hobby." Apple TV was a great but poorly executed idea: It offers the ability to stream TV shows and movies, music and photos, but the wish list of features far outweighs what the device actually does.
Apple can't win them all, right?
Thankfully, not all hope is lost with the Apple TV. In order to be a true media center, the device simply needs a few tweaks.
One of the simplest remedies would be to marry the Apple TV to the Mac Mini computer. Internet message boards are littered with stories of Mac Mini users who have connected the small computer to their HDTV for access to more media content (such as Hulu and Netflix (NFLX) streaming), a Web browser, DVD playback and other features.
We'd like to see Apple TV taken a step further, with Blu-Ray support, DVR capability, increased hard drive space and cable/satellite set-top box functionality, similar to what Motorola (MOT) and Cisco Systems (CSCO) manufacture for cable operators.
3. Apple video game console: Apple has thoroughly embraced the image of a mobile gaming pioneer with its TV commercials for the iPod Touch, where the device is dubbed the "funnest iPod ever" amid a series of clips of games being played through touch and movement sensors. With a bevy of games available for download in its App Store, Apple has helped proliferate mobile gaming beyond Sony's (SNE) PSP and Nintendo's (NTDOY) DS handheld gaming systems.
That success raises a question: Why hasn't Apple produced its own home gaming console? The truth is that Apple already has. The Pippin console was designed by Apple and brought to market by Bandai in 1995, only to become a major flop.
Because of that failure, Apple is probably not too anxious to re-enter the market, although it would offer a new opportunity to go toe-to-toe with one of its biggest rivals: Microsoft (MSFT) and the Xbox 360.
Rather than running software off a DVD or Blu-Ray disc like the Wii, Playstation and Xbox, Apple could offer games through an online App Store, similar to the way developers distribute their creations on the iPhone, iPod Touch and the iPad.
Fanboys' hearts have long been set aflutter by the dream of Apple-created video-game hardware running Mac or iPhone/iPad software. Apple uses accelerometers in its handheld devices to measure movement and positioning, so we'd be curious to see how Apple would revolutionize the home-gaming experience, especially considering the success of the Wii's waggle-like controls.
Recall that rumors circulated in mid-2009 that Apple was considering a buyout of game maker Electronic Arts (ERTS), although it's hard to imagine Apple in control of the Madden NFL and Sims franchises.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
The solid report comes a month after the retailer closed all of its Canadian operations.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.