What Else Will Apple Inc. (AAPL) Launch?

Consumer electronics giant Apple Inc. (NASDAQ:AAPL) recently announced a pair of next generation iPhones. The iPhone 5S looks like a nice refresh of the previous high-end flagship, the iPhone 5, and the iPhone 5C looks to be a compelling, higher-margin alternative to selling a marked down iPhone 5, but neither of these launches really moved the needle, so to speak (and shares actually fell roughly 5%). That being said, Apple’s pipeline is full of new product releases going into 2014. The question, then, is whether this will really matter to investors?

These products are mostly refreshes
The overarching theme here is the products that Apple Inc. (NASDAQ:AAPL) is set to roll out are all set to be refreshes. The new iPhones simply refresh older models, and I’m sure many are expecting a next generation set of MacBook Pro machines, a new full-sized iPad, and a new iPad mini. I’m confident that these devices will all be exquisitely designed, but that’s really par for the course for Apple.

Apple Inc. (NASDAQ:AAPL)’s product launches need to do two things:

• Regain market segment share (without hurting the gross margin profile)
• Drive significant top/bottom line growth

The first one is pretty tricky, particularly considering that much of the new and untapped growth areas are actually at the very low end of the market. The problem is that at some point, the high end finally becomes saturated and a slow-to-no growth business at best. The low end, while great for unit volume growth, isn’t exactly a gross margin wellspring.

This, of course, means that the second feat would be even harder to achieve. Sure, Apple Inc. (NASDAQ:AAPL) could conceivably drive market share growth at the high end against the likes of Samsung, HTC, and LG in the phone space, but it already has the lion’s share of that market. The same argument applies to high-end notebooks, all-in-one desktops, and even tablets – it’s Apple’s market share to lose.

Are there any new device categories coming?
There are two emerging device categories Apple Inc. (NASDAQ:AAPL) does not currently participate in that it could conceivably choose to do so:

1. “Phablets” – these are smartphones with large screens that border on being tablets, hence the name

2. PC/tablet hybrids

The first set of devices is one that I don’t expect Apple Inc. (NASDAQ:AAPL) to leave on the table, although there could be some interesting implications. Apple’s product lineup is specifically designed to minimize overlap so as to drive as many device sales as possible. If Apple were to introduce a “phablet,” a sale of such a device could potentially replace the sale of both an iPhone and iPad. However, I’m not sure how well this argument holds up as it is just as likely that Apple is gaining back a sale that it would have lost to a competing “phablet.”