Thursday, January 5, 2012

My Apple Predictions. 2012 edition

Last year I published a list Apple predictions and I will post a complete score card. However, some of my predictions can not be judged until Apple announces its first quarter results on January 24th. I will however provide my 2012 predictions now.

The iPad 3 will be announced February 28th and released March 16th. The iPad 3 will include a Retina Display with a resolution of 2048x1536. The case will largely look like the current iPad but Apple will introduce colors (again) like the iPod Nano and possibly patterns like the old Flower Power and Blue Dalmatian iMacs.

The cellular equipped iPad 3 will come with LTE radios in addition to the 3g and 2g radios they currently have. The large battery capacity of the iPad will make this luxury a possibility even though the iPhone 5 will lag behind with 3g.

The iPad 3 will also have the new quad-core A6 processor and get the same battery life as the current iPad except when using the LTE radio.

The memory options will remain16, 32, and 64 gb. This will be the last iOS device to include the 30 pin dock connector. The iPad 3 will get Siri. Prices will remain the same.

The current iPad 2 will continue as a discount model to fight the Kindle Fire and what-ever 7 inch piece of crap Eric Schmidt is talking about. The iPad 2 will only be available in 16 gb, but will still be available with WiFi or WiFi +cellular. The iPad 2 will be priced at $349 for the WiFi version and $479 for the WiFi +cellular

In addition to Verizon and AT&T, Sprint will get both iPads. Sprint will introduce a discounted price that bundles the wireless internet for your phone and iPad in order to solidify its position as the bargain wireless plan.

Last year I estimated cumulative sales of 65 million iPads (total of 2010 and 2011 iPad sales). Barring a total sales frenzy over this past Christmas I'm was a wee bit optimistic, with cumulative sales coming in closer to 54 million (that assumes iPad sales of 14 million in the Christmas quarter, 90% more than last Christmas, and 30% more than previous quarter). I am going to predict sales of 60 million iPads in 2012.

The iPhone 5 will be introduced in September and go on sale two weeks later. The message of the design is durability. Apple will use the same nano-coating that Motorola used on the RAZR to make it more water repellant. Apple will brand this with a unique name and claim it to be a major breakthrough.

Continuing with the theme of durability, Apple will abandon the 30-pin dock connector and seal the entire body of the phone. All data connections will need to be done wirelessly. A new MagSafe-like connector will be introduced for charging. Additionally the iPhone will lose the glass back, and it will be replaced with an aluminum one like on the iPad.

NFC will be added to go along with an  electronic wallet system called iCash. This will be linked to your iTunes account.

The phone will be slightly thinner than the iPhone 4, but will largely have the same form factor. There will not be a tear-drop shaped design. The screen size remains 3.5 inches. Like the iPad 3, it will be released in multiple colors. The rear camera gets better, the device gets thinner, the phone receives the quad core A6. 
With the introduction of the iPhone 5, the iPhone 4S is only offered with 16 gb and moves down to $99. The 8 gb iPhone 4 becomes the free offering in developed countries and the 3GS soldiers on as the price leader in emerging economies.

Last year I predicted Apple would sell 65 million iPhones. As of September 1, Apple has sold 56 million and analysts are expecting 30 million in the Christmas quarter, for a total of 86 million iPhones. So I blew that. 86 million represents an increase of 181% over 2010, which was an 189% increase over 2009 which was an increase of 183% over 2008. I'm going to guess that iPhone sales continue this incredible streak and grow by 180% in 2012 so that is 154 million. My official guess is 160 million iPhones in 2012 (that seems totally insane given that Apple has cumulative sales of 146 million iPhones as of September 2011).

Data from Asymco

After a stale year with no changes besides a white iPod touch the iPod line gets a significant revision.

In October, a month after the iPhone announcement, Apple will unveil the new iPod lineup. It's tag line will be something like "Something big. Something small." The iPod Nano is the something small. It adopts iOS and becomes the smallest general purpose computer. Like the iPhone it will lose the 30-pin doc connector while gaining WiFi and bluetooth. Apple will open the Nano to a specialized corner of the App with simple single function apps that incorporate voice control and feedback. The Nano will also gain a front and rear facing camera. Yes I know this is exactly what I predicted a year ago, but in the grand-tradition of Apple prognostication, I wasn't wrong, just a year too early.

The iPod touch goes big. It gains a 4 or 4.5 inch screen and is marketed as a game machine and Kindle competitor. It bumps up to the A5 processor and remains just as thin as the current device. The front face gains multiple colors but the back remains polished stainless steel. It also loses the 30-pin dock connector. All of those sightings of a teardrop shaped, 4-inch screened iPhone 5 from last summer were actually early proto-types of the 2012 iPod Touch. 

Apple offers an iPod Touch with a cellular radio for the first time, just like in the iPad. The data rates are also identical to the iPad. No LTE option. Prices: 
  • 8 gb   WiFi $229 
  • 32 gb WiFi $329        WiFi + Cellular $399 
  • 64 gb WiFi $429        WiFi + Cellular $499 

iOS 6 is announced at WWDC in June and roles out to all iOS devices in September a week before the introduction of the iPhone 5. The marque feature of iOS6 is Siri which becomes available on the iPhone 4, iPod 4th Generation and all three iPads. Siri leaves beta and opens up to allow limited third party software access to new voice and speech APIs. TV shows and movies get the iCloud experience and can be downloaded repeatedly. FaceTime over 3g.

The big story of 2011 is the repositioning of the MacBook Pro line. After the MacBook Air displaced the MacBook in 2011, it will set its sights on the iconic MacBook Pro. The MacBook Pro 13 inch will disappear entirely. The 15 and 17 inch will remain.

The Macbook Air line will add a 15 inch model. The MacBook Airs will begin to offer a cellular modem option.

MacPro will get updated without fanfare in March. Despite much handwringing, this will not be the final update of the tower mac which continues to serve a small, but influential, sliver of the Macintosh family. 

Apple will introduce a cloud back up service which will move Time Machine from a spare drive on your desk to one of Apple's data centers. This will be a pay-to-play service: one year of back-up will be provided with new machines and it will be $100 per year after that.

Throughout 2012 there is not a peep about the next version of OS X.

Apple TV
Apple introduces a revamped Apple TV at WWDC and it goes on sale in September. It remains the little iOS box that is currently sold with a bigger processor and a new version of the OS and Siri. An iOS device running iOS 6 will be required to act as the microphone for Siri. It will also gain the ability to add apps from the iTunes App Store. The Apple TV Set will also be introduced in June for a September or October role out. The Apple TV set (iPanel?) will not offer any significant feature beyond the Apple TV. However, it will come bundled with a 7 inch iPad to act as a remote control, game controller and auxiliary screen. Additionally, any iPhone, iPad and iPod running iOS will be able to duplicate the functions of this uber-remote.


Apple will spill some of their massive war chest to lock-up exclusive content deals. This will include sports, movies and original content. They will continue to purchase small engineering-focussed companies but no other major merger.

Tim Cook will remain the CEO and there will be a steady trickle of VPs leaving the company for other CEO positions. Names that will stay include Cook, Cue, Ive and Schiller. Forstall, Mansfield are among the Veeps who may move on.

A lot of companies might try to entice the architect of the iPhone to be their top guy and with a young Tim Cook (born 1960) secure as CEO, an ambitious Forstall might make the jump. Can you imagine Scott Forstall being tapped to replace Ballmer at Microsoft?

With the release of the new Apple TV the stock will be seriously goosed. I expect a 52-week high of $667 and the stock to close 2012 at $605.
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