Firm sees apps driving 50% sales growth for Apple through 2012
The founder of a prominent market research firm said Wednesday that he expects Apple to continue to post more than 50 percent sales growth over the next two years as burgeoning demand for mobile applications drives sales of Apple's mobile devices.
George Colony, founder and CEO of Forrester Research, made the predictions in an interview with Bloomberg.
Projecting Apple's current growth rates for the next few years, Colony sees the Cupertino, Calif., company's revenue surpassing that of other well-established tech giants. "They?ll be bigger than IBM next year, and they?ll be bigger than HP the year after that,? Colony said. Assuming that current growth rates continue, "they?re going to be a $200 billion revenue company,? he said.
When measured in terms of market capitalization, Apple became the world's largest technology company last year when it passed rival Microsoft. Shares of Apple have continued to climb since then, with the company's market cap topping $300 billion at the start of 2011.
Though Apple stock fell $2.01 to $339.19 on Wednesday, the company is up 5.2 percent since the beginning of the year.
Analyst consensus estimates also see Apple growing sales by over 50 percent to more than $100 billion in fiscal 2011, which ends in September, but some analysts see the company's growth slowing to around 18 percent in 2012.
Colony sees Apple's growth being driven by what he calls an "app Internet," where consumers and businesses rely on app for content and services, rather than the Web.
However, Colony's bullish outlook is tempered by concerns over Apple CEO Steve Jobs' health. Though he surmised that the company has a product pipeline set up for the next three to four years, an unexpected departure from the company by Jobs would affect Apple's product line and stock price.
?Remember, every two years they have to fill that store with new stuff,? Colony said, referring to Apple Retail Stores. ?Without Steve Jobs as the CEO, I think it will be much harder for them to do that. That would be a massive, massive hit to the valuation.?
Jobs is currently on medical leave, though he remains involved in major strategic decisions.
During the interviw, Colony warned that Apple rival Google, which he claims relies too heavily on the Web, could struggle as consumers gravitate toward apps. ?If you?re too Web-centric right now, you?re in trouble,? he said. ?Google?s business model is completely based on you going to the Web and clicking on a link and seeing an ad impression. In the app Internet world, all of that goes away.?
The executive also cautioned that Google may face troubled times when co-founder Larry Page takes over for Eric Schmidt as CEO next month. ?When it comes to Larry Page I have two words for you,? Colony said. ?Jerry Yang."
Yang, who co-founded Yahoo, became CEO of his company in 2007, but was unable to turn the company around. He eventually stepped down in 2009 after critics blamed him for mishandling negotiations of a takeover by Microsoft.
George Colony, founder and CEO of Forrester Research, made the predictions in an interview with Bloomberg.
Projecting Apple's current growth rates for the next few years, Colony sees the Cupertino, Calif., company's revenue surpassing that of other well-established tech giants. "They?ll be bigger than IBM next year, and they?ll be bigger than HP the year after that,? Colony said. Assuming that current growth rates continue, "they?re going to be a $200 billion revenue company,? he said.
When measured in terms of market capitalization, Apple became the world's largest technology company last year when it passed rival Microsoft. Shares of Apple have continued to climb since then, with the company's market cap topping $300 billion at the start of 2011.
Though Apple stock fell $2.01 to $339.19 on Wednesday, the company is up 5.2 percent since the beginning of the year.
Analyst consensus estimates also see Apple growing sales by over 50 percent to more than $100 billion in fiscal 2011, which ends in September, but some analysts see the company's growth slowing to around 18 percent in 2012.
Colony sees Apple's growth being driven by what he calls an "app Internet," where consumers and businesses rely on app for content and services, rather than the Web.
However, Colony's bullish outlook is tempered by concerns over Apple CEO Steve Jobs' health. Though he surmised that the company has a product pipeline set up for the next three to four years, an unexpected departure from the company by Jobs would affect Apple's product line and stock price.
?Remember, every two years they have to fill that store with new stuff,? Colony said, referring to Apple Retail Stores. ?Without Steve Jobs as the CEO, I think it will be much harder for them to do that. That would be a massive, massive hit to the valuation.?
Jobs is currently on medical leave, though he remains involved in major strategic decisions.
During the interviw, Colony warned that Apple rival Google, which he claims relies too heavily on the Web, could struggle as consumers gravitate toward apps. ?If you?re too Web-centric right now, you?re in trouble,? he said. ?Google?s business model is completely based on you going to the Web and clicking on a link and seeing an ad impression. In the app Internet world, all of that goes away.?
The executive also cautioned that Google may face troubled times when co-founder Larry Page takes over for Eric Schmidt as CEO next month. ?When it comes to Larry Page I have two words for you,? Colony said. ?Jerry Yang."
Yang, who co-founded Yahoo, became CEO of his company in 2007, but was unable to turn the company around. He eventually stepped down in 2009 after critics blamed him for mishandling negotiations of a takeover by Microsoft.
Comments
These researchers and analysts should try to sit down with Jobs and just ask him where he and Apple are headed next. Then they would have the real answer to their research.
I assume what they would get out of such an interview is that Apple is headed nowhere, because its not like Apple would tell them about upcoming products. "Oh because you asked nice, let me tell you about the iPhone 5 and our corporate strategy for the next five years".
While I agree that most market researchers have very little insight into the future, nominally that is what they are supposed to work on. IMO most research firms of that nature are trying to manipulate the future more than predict it. I guess that is a form of prediction?
From near bankruptcy to biggest company in the world in 15 years. Truly amazing.
It is amazing, however Apple is not the biggest company in the world.
That position goes to Exxon-Mobil.
These researchers and analysts should try to sit down with Jobs and just ask him where he and Apple are headed next. Then they would have the real answer to their research.
This comment demonstrates your utter lack of knowledge about how Apple runs its business and specifically its policy about talking about unannounced products.
Thanks for playing. We have some nice parting gifts for you.
. . . but some analysts see the company's growth slowing to around 18 percent in 2012.
Because they assume that the iPad is the last new product Apple will ever produce?
The founder of a prominent market research firm said Wednesday that he expects Apple to continue to post more than 50 percent sales growth over the next two years .....
What does he mean? 50% per year for the next two years, or ~22.5% per year during the next two years, compounded? If the latter, then it's an odd way to phrase the text and the headline.
Incidentally 'consensus' analyst forecasts (not saying they are correct -- I think it's way too aggressive) are for ~$118B in revenue by Sept '12, or approximately 80% growth over two years from Sept '10, i.e., a compouned annual growth rate of 35% per year. http://finance.yahoo.com/q/ae?s=AAPL+Analyst+Estimates
. . . Since their beginnings Apple and Jobs have always been on the frontier heading toward the next mountain range with the settlers and city slickers following far behind. . .
Exactly, Ikrupp. Apple is never sitting, always planning and most often fruitful. What wonders the world will see as Steve and his team invent the future. They ain't just laying back and enjoying the Mountains. Their building and designing new heights to scale.
I like your Imagery.
Namaste,
mhikl
From near bankruptcy to biggest company in the world in 15 years. Truly amazing.
The problem is it was Steve who did it and arguably continues to do it, so the question is, with out him can Apple continue as it does today....
Analysts: Is he like the one who, in 1984, discouraged me from being excited about the Mac and Apple's long-term prospects, and counseled me against buying Apple stock. This guy may turn out be correct, but he's actually no more credible to me than if he were basing his prognostications on examinations of chicken entrails. Spare me his wisdom and that of his ilk, puleese!
Amen, no one knows what the future holds... Just ask Japan
It is amazing, however Apple is not the biggest company in the world.
That position goes to Exxon-Mobil.
Well what I find funny is they keep basing how big the company is on Market Cap which is just Price per share x outstanding shares...
So in my mind the are the second biggest company because the Stock market likes them x They have a Ton of outstanding shares, if any of that changes they aren't big any more.
Now if you look at the list of companies by Revenues Apple is #197 for 2010
http://money.cnn.com/magazines/fortu...t/101_200.html
Well what I find funny is they keep basing how big the company is on Market Cap which is just Price per share x outstanding shares...
So in my mind the are the second biggest company because the Stock market likes them x They have a Ton of outstanding shares, if any of that changes they aren't big any more.
Now if you look at the list of companies by Revenues Apple is #197 for 2010
http://money.cnn.com/magazines/fortu...t/101_200.html
The reason the markets "like" AAPL is because of the growth in earnings. Revenues don't mean much if you don't earn, and even earnings don't mean much if they don't grow. The number of shares outstanding doesn't change the company's market valuation. In fact if the company created more shares, the resulting dilution would lower the share value for everyone else -- not increase it.
Well what I find funny is they keep basing how big the company is on Market Cap which is just Price per share x outstanding shares...
So in my mind the are the second biggest company because the Stock market likes them x They have a Ton of outstanding shares, if any of that changes they aren't big any more.
Now if you look at the list of companies by Revenues Apple is #197 for 2010
http://money.cnn.com/magazines/fortu...t/101_200.html
...second most VALUABLE company in the world by market capitalisation. Not biggest or bestest (It is one of the bestest)or the most profitable, but one of the most valuable. Pick the right metric people.
If you read the original linked article, it is more clear that Forrester is predicting a 50% revenue increase annually over the next two years for Apple, toppling IBM's sales in a year, and then HP's sales in two years.
Where is the 'original linked article'? I don't see any links?
Add: OK, I see that you were referring to the Bloomberg interview. The headline is the same (confusing), but reading the article, it does seem to imply '50% annually for the next two years'.
The problem is it was Steve who did it and arguably continues to do it, so the question is, with out him can Apple continue as it does today....
Good question. Who was it who said here on AI that Steve Jobs's greatest product is Apple itself?
Which in turn has become a machine for dreaming up and realizing great products in the most thorough way possible. It may be self-sustaining, with or without Steve Jobs. We don't know, because there has never been such a company with this kind of focus. It's like they've discovered a new industry based on a new resource: the desire of people to be brilliantly connected to everything all the time.
They're just getting started. Everyone is going to need -- not only want -- a tablet. Video communication is going to be really big. And wearable eyeglass screens haven't been given the Apple treatment, for example.
Fifty percent growth year over year may be conservative. If the electricity stays on, that is.
?Remember, every two years they have to fill that store with new stuff,? Colony said, referring to Apple Retail Stores. ?Without Steve Jobs as the CEO, I think it will be much harder for them to do that. That would be a massive, massive hit to the valuation.?
I see this differently. I don't believe Apple creates products on a schedule. I think they create it with their hearts. Why two years Forrester? Does he think Apple was late with the iPad since it was 3 years after their latest new (hit) product?
And then to see that you need to pay in order to read the articles on their website.