Report: The Future of Apple

In its examination of how Apple’s product strategy will evolve in the next five years, Forrester predicts that Apple will offer eight key products and services to connect PCs and digital content to the TV-stereo infrastructure in consumers’ homes.

To fulfil this strategy, Forrester thinks Apple will not only launch new products, but also re-engineer the Apple Store and expand into in-home installation services to deliver a fully integrated digital experience.

Companies in several industries will be impacted by Apple’s evolution. These include PC makers like Microsoft and HP going after the same consumer home market, service providers who deliver broadcast content and broadband, retailers who provide in-home installation services, and consumer electronics device makers like Sony and LG that are moving towards IP connectivity.

Whether they currently compete with Apple products or are a complement to them, these vendors need to know whether they should worry about Apple making a play for their markets over the next five years. 

“Consumer product strategists frequently ask Forrester how Apple’s product strategy will evolve,” says J.P. Gownder, Forrester Research principal analyst and lead author of the report. ”We don’t possess any secret knowledge of Apple’s product road map, but we want consumer product strategists to consider this possible — and, in our eyes, highly likely — vision of the Apple digital home offering.” 

Today, consumers’ homes contain a mishmash of audio-visual (AV) and information technology (IT) technologies and products – TVs, home stereos, set-top boxes, DVD players, PCs, home networks, and game consoles. But presently, AV and IT aren’t actually connected together in most homes.

A few bridge products exist, but the AV/IT divide remains and there’s a clear consumer need for an industry player to help consumers unite these systems and make in-home installation easy.  

According to the Forrester report, in order to create an integrated digital experience Apple will build its strategy on eight pillars with four existing products:  

• Apple Macintosh home PC
• Apple TV digital media extender
• Apple Store (as the educational staging ground that helps visitors understand the digital home value proposition)
• iTunes and its successors (where consumers will be able to manage more than just music) 
• And four new product concepts:  
• Apple home server product
• AppleSound universal music controller
• Network-enabled gadgets (i.e. music, digital photo frame, and alarm clock devices)
• In-home installation services

Although Apple brings a wide variety of assets to bear in building its play for the digital home, it faces obstacles to mass-market success. Forrester predicts that Apple will succeed with the 10% of the market that currently considers or owns a Mac — consumers willing to pay a premium for their digital home experience. However, this isn’t a one-player market, and other types of firms will go after the digital home as well.

Challenges include: 

• Competition from service providers for in-home installation (i.e. cable companies, satellite providers, and telcos).
• Competition from Microsoft and HP – These players will be going after many of the same top 10% of consumers as Apple and have the benefit of Windows machines installed in most mass-market consumer homes as well.
• Apple’s commitment to closed systems – Apple’s inclination to controlling the user experience through closed systems would inhibit mass-market success in the digital home, where a wide variety of manufacturers’ products must be tied together.

Forrester advises strategists at cable and satellite companies and telcos delivering broadcast content and broadband to devise strategies vis-à-vis Apple by 2013, just as mobile operators have to do today. “Consumer product strategists at cable companies and PC support organizations that want to play in the digital home should take notice,” concludes Gownder. “Expect Apple to be a significant competitor in your markets in the next five years.” 

Source: www.forrester.com