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Apple's Decade: Innovation Kings

Stocks in this article: AAPL NFLX GOOG

Editor's note: This is the second excerpt of an e-book on Apple by Jason Schwarz, an analyst at Lone Peak Asset Management in Westlake Village, Calif. Part 1 appeared Monday.

The fundamental purpose of Apple's (AAPL) mission is about to change. Building products that utilize the App Store is the biggest money-making opportunity in tech. The key to Apple innovation will be to figure out how to effectively merge multiple functions onto a single device, just as the company did with the iPhone. Right now, the popular phrase in commercials is "there's an app for that." Soon that phrase will evolve into "there's a device for that."

Apple's competitors are working overtime to get their piece of the mobile Web. Google (GOOG) is following the Microsoft (MSFT) model of the 1990s by touting the openness of Android. Will open beat out the closed Apple model once again? I don't think so.

Technology has grown so intricate that consumers rely on seamless integration to overcome the complexities. Seamless integration does not happen when various companies try to mix and match their solutions.

Look at what is required to download the latest versions of Microsoft operating systems. The average Joe can't do it. His old hardware won't support the new stuff, and if it does, then he's dealing with software that doesn't support it. Apple upgrades are, I'm going to use that word again, seamless. The closed ecosystem fills the need of modern technology.

Apple UWS
Apple's approach to the future: seamless technological integration.

Here is one of my 10 projections for Apple's future in decade 2010:

Apple Projection No. 4

Most suppose that Apple TV is made for movies. I think digital movie distribution is a business that Steve Jobs wants little to do with. It's a novelty. There doesn't seem to be any consumer need in the area. Anyone who would own an Apple TV already has access to Netflix (NFLX) or pay-per-view.

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