Collected: Apple threat level hits new high

February 18, 2011 10:07 AM EST

Facts are meeting speculation. With Mac, iPad and iPhone sales on the up and up, this has been a fascinating week for Apple [AAPL] rumor. All the disparate claims seem headed into the final steps of their strange dance, unfolding like Lotus flowers, suggesting Apple is set to deliver the world's most efficient connected device-agnostic global mobile platform.

Look at the evidence: Apple's selling more Macs than ever -- Mac sales growth has outpaced the market for 19 consecutive quarters; analysts predict smartphone sales will climb 50 percent this year and the iPad-dominated tablet market is growing faster than that of any previous consumer electronics product.

Ready for business

A report at All Things D confirms December 2010 saw Apple's 19th consecutive quarter of Mac marketshare growth, up 23.5 percent for the month. The PC industry saw overall growth of 3.4 percent that month.

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All Things D confirms Apple's consumer market success is transforming its non-traditional markets: business market shipments of Macs grew 65.4 percent in the period (against a 9.7 percent industry average). Government Mac sales were stratospheric -- up 549.5 percent.

What's driving this? The OS X, iOS, iPad, iPhone and iPod halo, of course. And also Microsoft's decade-long failure to mount anything approaching an effective market strategy to keep its customers loyal. Perhaps this is why Apple has repeatedly claimed 50 percent of Mac sales in its retail outlets are to people "new to the platform".

As I've reported previously, the iPad has won the enterprise, and now business is also turning to Mac. The iPad has been deployed or piloted in 80 percent of the Fortune 100 companies.

The mobile mojo

Apple has previously made no secret of its ambitions in the mobile space. Apple CEO Steve Jobs once again courted controversy when he claimed Apple to be the biggest mobile device maker in the world during the iPad launch in January 2010. While Nokia challenged the claims, Apple's share has grown while Nokia's gone to get cosy with Microsoft...

All the pieces are falling into place. Silicon Alley Insider predicts between 300 million and 441 million tablets will be sold by 2015. Apple will likely grab a significant percentage of these sales.

The iPad is a powerful machine. You can use it for business and for productivity. The MacBook Air suggests the future of the Mac has a little iPad inside.

Apple is already developing the future of its notebook range with the MacBook Air. This lightweight, flash-based notebook is going to change the industry -- forget the optical drive. It isn't just me who says this, Nvidia CEO Jen-Hsun Huang says that all future laptops will mirror the MacBook Air. "I think the MacBook Air is a good mental image of what a clamshell laptop will look like," he said.

Apple is number one

I understand some analysts don't include the iPad within PC marketshare figures. If you do you see that Apple is now the number one manufacturer in the worldwide market for mobile PCs. Recent DisplaySearch data assigns Apple with 17.2 percent of the mobile market, HP took 15.6 percent.

Richard Shim, senior analyst at DisplaySearch, said in a statement. "Apple is currently benefiting from significant and comprehensive growth from both sectors of the mobile PC spectrum, notebooks and tablet PCs. Cannibalization seems limited at this point."

Expectation of the imminent release of the iPad 2.0 has begun to impact Apple's FY 2Q sales. That is an easy conjecture to make, given that Apple partner T-Mobile in the UK is now offering iPads at half the original price -- making way for new stock?

Apple's ecosystem is bigger than the laptop and tablet. The iPhone (and, to a lesser extent, the iPod touch) are in on the deal. While these offer less screen real estate than the iPad or a MacBook, both are capable handheld computers with powerful ARM-based processors on which a variant of OS X sits (after all, that's what iOS is).

Best in show

Apple didn't attend Barcelona's Mobile World Congress (MWC) this week, but, just as at CES, the company's shadow was felt. The iPhone took top honors as the 'Best Mobile Device' at MWC. Organizers praised Apple's phone for its, "Great screen, sharp design, fantastic materials, and phenomenal ecosystem for app developers. In a tight race, the iPhone 4 built on the success of its predecessors to set the pace for smart phones."

Smartphones are growing ever-more powerful, with dual and even quad core chips set to hit market in the next 12-months. Gartner tells us US consumers are more likely to buy a smartphone than any other device.

"Continued low retail pricing and widespread adoption of applications like Web browsing, e-mail, Twitter, Facebook, GPS and games will continue to stimulate consumer demand," said Hugues de la Vergne, Gartner principal research analyst, in a statement.

In other words, the market for smartphones is expanding to include people who might not be as tech-savvy as the first wave of iFolk. This is bad news for Apple competitors -- Apple just needs to cough and the world knows about it, and gets anxious in case the company has a cold. No one else has captured -- or created -- such consumer interest.

An inconvenient truth

The hard truth is that new smartphone purchasers are more likely to grab an Apple than anything else, simply because they have heard of -- and already trust -- Apple. If they can't afford an Apple device they'll take one from another manufacturer/OS supplier. Apple clearly needs a device to woo the price-conscious end of the emerging market, hence the iPhone nano claims and counter-claims this week.

(Apple predictions are impossible to guarantee, but I'm in no doubt Apple is looking at how it can offer iPhones contract-free at better prices, and I'd continue to speculate this offering may not be made under the iPhone brand).

Looking at purchasing habits, Gartner believes US consumers will purchase new technology in the following order of preference:

  • Smartphone
  • Laptop
  • Desktop PC
  • Mobile handset (non-smartphone -- iPhone nano no-no?)
  • eBook Reader
  • Tablet (iPad)

With iPhones, iPads and the iPod touch all demanding touch-sensitive panels,  Apple will purchase 60 percent of all the touchscreen displays manufactured worldwide. Where and how will competitors fight back on scale, sales or deployment? This is classic Tim Cook supply chain management used as a weapon.

One lion to rule them all

We've talked before about Apple's plan to implement iOS features within OS X, and (presumably) OS X features within iOS. Alongside closer unification between devices on a system level, Apple is also working hard on cloud-based services to tie its platforms together -- essentially creating one vast, device-agnostic computing platform with an accent on mobile.

I've speculated on Apple's cloud-based strategy in the past. That's why I looked with interest at Cult of Mac's report on the evolution of an Apple social network on the back of MobileMe.

Summarizing these claims:

  • iPhone to host NFC chips
  • MobileMe to be free
  • MobileMe will support an NFC-based system to enable your Home directory to be accessible on any machine.
  • Apple will offer a media locker service via MobileMe
  • iTunes streaming system is on the way.

Additional claims from across the Web include expectation Apple will offer its Placebase-based Mapping system, turn-by-turn voice navigation and contextual search tools based on where you are (augmented reality, in other words). I wrote about these here.

The Home folder offering means that Apple is on the verge of deploying the world's most advanced computing platform. What's key to the platform is the software. Apple is a software company. It doesn't build hardware, it only designs it. Apple's NeXT step has given the company over a decade in which it has transformed itself from a dying firm into the biggest technology heavyweight. Surely nothing can go wrong?

Holy hubris

Apple's arrogance toward publishers exposes its Achilles' Heel. The company's move to demand a 30 percent slice of total revenue this week has caused huge annoyance. After all, include European VAT in that transaction and Apple is demanding 50 percent of booked revenues, driving industry association INMA Europe president Grzegorz Piechota to ask: "How can you give up half of your revenue?"

Apple's on the edge of achieving its great promise. Apple is almost set to introduce the cloud-based elements which will tie all its disparate offerings together, but like any empire, it has a weak spot which could cause the company to fall in on itself. That's an arrogance best expressed through every one of its bad decisions through the App Store.

Over ten years have passed since the great Steve Jobs successfully began the epoch-defining turnaround of the ailing Californian computer firm. Today, Apple faces challenges which could put the world within its reach, or, with a series of small but definitive blunders, could lose its historical imperative, clutching defeat from the very jaws of victory.

This has been a week of Apple rumor. The rumors are becoming circular now. When speculation becomes circular it usually presages a hatching into fact. The next few months should be very interesting indeed.

What do you think? Let me know in comments below. I'd also very much like to invite you to follow me on Twitter so I can let you know when I post new reports here first on Computerworld

Signing off, here's an unrelated but musical little something for the weekend, Radiohead's latest single went viral overnight: