Here's his post-CES wish list for future Apple products, given what other companies had on display at the show:
- Smart TV software. He thinks the probability here is high, noting that what we're really talking about here is "a tablet on a wall with apps and access to channel guides."
- A cheaper smartphone for emerging markets. He considers the probability higher, despite the likely lower margins for such a product.
- A large screen smartphone strategy. Probability: High.
- Better keyboard accessories for the iPad. Probability: Low. "But it's time to stop PC convertibles and rival tablets in their tracks."
- Revival of the Air with new ARM processors and form factors, bringing iOS to the Mac. Probability: High, in 2014.
- A payment systems that enhances the ecosystem's utility. "Likely by 2014."
- A wearable computing strategy. "Watches equipped with NFC identifiers and the ability to communicate could actually be useful."
- A more aggressive appliance and automotive integration strategy. "It is obvious that there will be a demand to be notified by your appliances."
Reitzes notes that all the areas above were already pioneered by others at CES.
"The lack of Apple products in some of these areas has investors worried that anything the company does this year may not be from a position of its usual leadership," he writes. "Samsung seems willing to try everything, in all shapes and sizes, too. Given our view that Apple has fallen behind in perception – we believe the company still has room to surprise this year. We are looking for improved Web and data services in iOS 7 and the realization that its ecosystem can sustain and improve its value despite threats from Google and Amazon. While it will now be harder to positively surprise by simply announcing a TV solution, we believe Apple’s use of iOS devices and Siri as interfaces linked with iOS and iTunes could give a differentiated feel that makes investors appreciate the installed base a little more."
Retizes was a little worried by just how good the Samsung solution is for integrating various kind of content.
"Samsung’s solution for a Smart TV is getting better," he writes. "Frankly, Samsung’s demonstration at CES was very close to what we think Apple should have done already. Samsung not only makes the TV, but also software and a piece [of] hardware that can turn other Samsung TV’s into a Smart TV. However, Samsung’s adaptable solution even lends itself to the idea that it doesn’t seem like it is necessary to make a TV in order to participate in Smart TV. The most interesting thing about Samsung’s solution was that it accessed channel guides from cable companies and required users to sign in as a subscriber – and the TV access seemed to work completely alongside the cable service. The new Smart Hub greatly improves upon prior Smart TV’s by including both voice and gesture based controls which aim to simplify the process of searching for content and controlling a TV."
He thinks Apple will follow with software and TV integration - but that it needs to do in a hurry. The time to way, he says, is over. In 2013, he says, Apple will either need to roll out a TV strategy or risk falling behind. "We have been going to CES 10 years straight and have never felt this way about Smart hubs," he writes. "The TV is becoming more about an extension of mobile device utility – than the TV. If Apple were to sell TV hub hardware, we believe its margins and pricing could be industry leading given its vertical integration with content - but hardware isn’t necessary."
AAPL is up $2.73, or 0.5%, to $520.78.
