Top Tech Stories to Watch in 2014: All About Apple

by Brad Moon | December 13, 2013 12:13 pm

Top Tech Stories to Watch in 2014: All About Apple

Apple (AAPL[1]) was one of the biggest tech stories in 2012, hitting $700 as it became the most valuable company in history[2]. It dominated headlines again in 2013 by shedding 44% of its value on concerns that AAPL stock had peaked: Android was taking over the mobile market, innovation seemed dead and the heady days of iPhone and iPad-fueled growth seemed to be over.

I20132014YearEnd185 Top Tech Stories to Watch in 2014: All About Apple[3] think Apple is once again going to be the tech story next year. At $562, it has clawed back much of the ground it lost this year — and if all the pieces fall into place next year, AAPL has potential to continue climbing. I think Apple is going to be at the center of nearly all the top tech stories to watch in 2014.

There are also opportunities for missteps too, and if Apple misses any of these in a big way, the recovery of 2013 could be jeopardized. An Apple product failure is unusual enough (in recent years) that even if Apple fails to hit a home run, a stumble is also enough to make it a top tech story.

But in many cases, 2014 is Apple’s to lose. If it makes the right moves, AAPL could have a year that looks like the best of 2012.  Here are the top tech stories to look out for in 2014:

Top Tech Stories: Apple iPad Market Share

Let’s talk iPads first. Apple traditionally reports a blowout holiday quarter as people stock up on the latest iPads. Last year, Apple killed it on the strength of the newly introduced iPad Mini, selling 19.5 million iPads — up 65% over the previous year!

iPad Mini 300x240 Top Tech Stories to Watch in 2014: All About Apple[4]When Apple reports its Q1 2014, all eyes are going to be on those iPad numbers again. Apple introduced a compelling upgrade this fall in the A7-powered, super-slim iPad Air. And it gave everyone what they’ve been clamouring for with a Retina display iPad Mini.

But that new Mini is priced $70 higher than last year’s models (despite grumbling that it was too expensive[5]), and there have been concerns about stock shortages due to manufacturing issues going into the holidays. Looming over it all is the iPad’s declining market share, now down below 30% after iPad sales slipped 14% in Q2 and grew just 0.6% in Q3.

Those iPad holiday numbers will show us whether Apple has successfully halted its decline in the tablet market, or if the iPad is on a trajectory to reach smartphone-like numbers, where the iPhone has sunk to a 12.9% market share.

Top Tech Stories: A Bigger iPhone

A bigger iPhone will result in a huge year for Apple. Whether it has curved glass[6], is priced at a premium over current iPhones or increases resolution beyond the current ‘Retina’ level, the iPhone 6 must include a bigger display. While the iPhone 5S remained at the same 4-inches as last year’s iPhone 5, consumers have demanded bigger and most flagship smartphones are now in the 5-inch range. Even the latest BlackBerry (BBRY[7]) is a 5-incher!

iPhone is Small Top Tech Stories to Watch in 2014: All About Apple[8]Competing mobile operating systems are closing the usability gap with iOS. Not to mention the facts that Google (GOOG[9]) Play is now the biggest app store and the iPhone is several years behind consumer tastes for display size. Android surpassed an 80% smartphone market share[10] in 2013 and Windows Phone adoption grew 156% on the year.

With its advantages drying up, Apple can’t afford to ignore the ‘bigger is better’ smartphone movement in 2014. If it does release a bigger iPhone 6, it not only stands to regain its position as the must-have smartphone for 2014 — and the sales numbers that title represents — the company stands to benefit from the pent-up demand of iPhone owners who have skipped upgrading while waiting for something more the size of Samsung’s (SSNLF[11]) Galaxy S4.

Top Tech Stories: Smartwatches

Smartwatches are another one of the top tech stories to watch in 2014. Anticipation for this wearable technology has been building, and I suspect it will either boom or bust next year. Samsung’s Galaxy Gear, the first of the big smartwatch releases, was a dud — or, as BGR terms it: “an epic flop.”[12]

TikTok Apple Watch 269x300 Top Tech Stories to Watch in 2014: All About Apple[13]We’re waiting for smartwatch releases from Google, Microsoft (MSFT[14]) and Apple in 2014. Apple is generating a lot of anticipation in particular, because the company has a history of nailing consumer electronics through design, function and marketing. Smartwatches are paired with smartphones, and Apple doesn’t have to deal with Google’s fragmentation or Microsoft’s small user base issues.

Apple has the ability to design an ‘iWatch’ that’s visually complementary to its iPhones. It can count on the vast majority of existing iPhone users running the latest version of iOS7[15] (so compatibility won’t de-rail adoption). Plus, iPhone owners skew higher in disposable income, and AAPL has its Apple Stores — the top performing retail stores in the U.S. — to show off new gear. Hit or miss, smartwatches can’t avoid being one of the top tech stories next year.

Top Tech Stories: Microsoft’s Tablet Efforts

To switch things up a bit, here’s a non-Apple piece. Microsoft is coming into a huge year. It’s replacing CEO Steve Ballmer, integrating Nokia (NOK[16]) into its operations as a mobile devices arm and struggling to stay relevant in a world where PCs and Windows are declining in importance.

Surface RT Clearance Top Tech Stories to Watch in 2014: All About Apple[17]But I’m watching to see what Microsoft does with Windows RT and Windows tablets in general.

While the new Surface 2 tablet[18] shows that the Windows RT experience has improved, Microsoft is seeing minuscule uptake on the platform. In Q2, despite steep discounts, Microsoft managed to move just 200,000 Surface RT tablets, compared to the 14.6 million iPads Apple sold. And Microsoft’s OEM partners have backed out of making their own RT devices to boost the platform.

As IDC points out in its report on Q3 tablet shipments, “Windows tablets continued to struggle to win over consumers.”[19] Most of the Microsoft tablet sales have been the full-blown Windows version, with tablets running Windows 8 RT failing to have a significant impact on the charts.

In 2014, I’m waiting to see if MSFT dumps Windows RT and whether cheaper 7-inch Windows 8 tablets can leverage enterprise adoption to get Microsoft anywhere near double-digit tablet marketshare.

Top Tech Stories: Apple TV as a Game Console

Finally, back to Apple again for a top tech stories wildcard. Between them, Sony (SNE[20]), Microsoft and Nintendo (NTDOY[21]) sold 260 million units in the previous generation of video game consoles. Apple has been making moves into the space, including external controller support[22] and the purchase of PrimeSense, the company that designed the Kinect motion sensor for the Xbox 360. So 2014 could be the year the Apple TV streaming box gains the ability to play iOS games on a television.

AppleTV as Game 300x201 Top Tech Stories to Watch in 2014: All About Apple[23]Apple is never going to steal true hardcore gamers from the PS4 and Xbox One, but a game-playing Apple TV would appeal to casual gamers and to parents. It would be a set-top streamer, cheap game console and source of 99-cent games their kids could also play on the iPads, iPhones and iPods.

If Apple took a chunk of next generation game console sales with the Apple TV, that could be a big new source of revenue while potentially setting off a hardware price war, shaking up a game development industry that counts on those new console owners to pay $60 for blockbuster-budget video game titles[24]. It could also put the nail in the coffin of Nintendo’s Wii U — the struggling next generation console that relies on the sort of casual gamers most likely to jump ship.

The technology industry is a huge one, and there will be no shortage of tech stories to watch in 2014. The usual players like Google and Microsoft are bound to be involved, but I suspect the really big ones are going to center around Apple … and that’s likely to result in good news next year for AAPL[25].

As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.

Endnotes:
  1. AAPL: http://studio-5.financialcontent.com/investplace/quote?Symbol=AAPL
  2. the most valuable company in history: http://www.forbes.com/sites/benzingainsights/2012/08/21/apple-now-most-valuable-company-in-history/
  3. [Image]: http://investorplace.com/hot-topics/best-of-2013-and-2014/
  4. [Image]: http://investorplace.com/wp-content/uploads/2013/12/iPad-Mini.jpg
  5. despite grumbling that it was too expensive: http://investorplace.com/2013/10/aapl-risky-ipad-strategy/#.UqspW5ETuOE
  6. curved glass: http://www.theverge.com/2013/11/10/5087084/apple-reportedly-working-on-bigger-curved-screen-iphones
  7. BBRY: http://studio-5.financialcontent.com/investplace/quote?Symbol=BBRY
  8. [Image]: http://investorplace.com/wp-content/uploads/2013/12/iPhone-is-Small.jpg
  9. GOOG: http://studio-5.financialcontent.com/investplace/quote?Symbol=GOOG
  10. Android surpassed an 80% smartphone market share: http://thenextweb.com/insider/2013/11/12/idc-android-hit-81-0-smartphone-share-q3-2013-ios-fell-12-9-windows-phone-took-3-6-blackberry-1-7/#!pLzfV
  11. SSNLF: http://studio-5.financialcontent.com/investplace/quote?Symbol=SSNLF
  12. “an epic flop.”: http://bgr.com/2013/11/18/samsung-galaxy-gear-sales/
  13. [Image]: http://investorplace.com/wp-content/uploads/2013/12/TikTok-Apple-Watch.jpg
  14. MSFT: http://studio-5.financialcontent.com/investplace/quote?Symbol=MSFT
  15. running the latest version of iOS7: http://www.digitaltrends.com/mobile/report-ios-7-adoption-hits-74-percent-among-apple-mobile-users/
  16. NOK: http://studio-5.financialcontent.com/investplace/quote?Symbol=NOK
  17. [Image]: http://investorplace.com/wp-content/uploads/2013/12/Surface-RT-Clearance.jpg
  18. Surface 2 tablet: http://investorplace.com/2013/11/surface-2-review-msft/
  19. “Windows tablets continued to struggle to win over consumers.”: http://www.idc.com/getdoc.jsp?containerId=prUS24420613
  20. SNE: http://studio-5.financialcontent.com/investplace/quote?Symbol=SNE
  21. NTDOY: http://studio-5.financialcontent.com/investplace/quote?Symbol=NTDOY
  22. external controller support: http://investorplace.com/2013/06/watch-out-nintendo-apple-is-designing-game-controllers/
  23. [Image]: http://investorplace.com/wp-content/uploads/2013/12/AppleTV-as-Game.jpg
  24. blockbuster-budget video game titles: http://investorplace.com/?p=449256&page=6
  25. good news next year for AAPL: http://www.marketwatch.com/story/10-reasons-to-buy-apple-stock-now-2013-12-11

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