Thursday, January 8, 2015

Apple's App Store Is The Secret Sauce

Apple recently announced its iPhone 6 sales and the increase in share in the smartphone market.  But whether it is the iPhone or iPad or soon to be released Apple Watch, what makes these products run are applications and content.  And with iTunes and the App Store, this software marketplace offer s the fuel to make Apple's technology that much more valuable. 

Apple certainly knew the value of the App Store and we know too.  According to Mashable, "Apple says billings for its App Store jumped 50% year-over-year in 2014, suggesting App Store sales totaled at least $15 billion for the year, based on the more than $10 billion in sales it did in 2013." How many companies would love to have a $15 billion dollar business that is growing at a rapid rate.  And with new iPhones and other new products on the way in 2015, the App Store should only continue to excel.  What is also amazing is that this little side business must have a huge margin with minimal operating costs. 

And despite not being a huge percentage of Apple's total business, it is becoming a substantial one on its own.  As more consumers embrace the Apple ecosystem, more consumers will rely on the online Apple store for software applications and content to keep running their technology.  And that is what the secret sauce is all about.

How High Def Should A Television Be

When Hi Definition TV screens came on the market, it was a quantum leap in television viewing for consumer.  No longer were we confined by a 4:3 panel, now with a wider screen and more pixels, pictures were sharper then ever.  We faced a choice between a plasma screen and LCD and as competition increased, prices dropped.  HD TV was a revolution in the TV experience.

But since then, improvements in the TV screen have been less than enchanting.  With the push toward 3D, we pushed back, not willing to invest in 3D goggles to put over our faces.  And at this year's CES, the push is on for the next evolution of high def, ultra hi def or 4K.  But can a picture get any sharper? 

It took a number of years for content creators to upgrade their programs to HD and most decided to not even bother with 3D.  So will content companies invest again to upgrade to an ultra HD output in order for these new TV sets to be worth their price?  Certainly the early adopters will pay more for a big screen ultra HD TV set, but the average consumer will not.  Even as Ultra HD prices drop, current HD sets will likely drop even more.  And today's millennials are consuming more content through smaller mobile tablets and smartphones anyway.  For me, I don't have the same desire to own an Ultra HD or 4K set like I did when HD TV were first introduced.  Eventually content will be created for 4K, but I suspect that adoption and sales of 4K sets will take a much longer time to occur.