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TheStreet Open House

Apple's True Innovation Is Making Tools, Not Toys

Stocks in this article: AAPLMAT

NEW YORK (TheStreet) -- Many observers of Apple have suggested that a new product category for Apple (AAPL) is essential for growth. It's been pointed out that the iPhone is reaching the saturation point, and that future sales will come from replacements of current iPhones -- not exactly a growth scenario.

And that's why many would have Apple expand into new product categories.

Apple stock closed Thursday at $530.65 per share, down 1.11% for the day and down 5.41% year to date. (Long term investors shouldn't worry too much, though -- it's up 3,750% over the past ten years.)

When it became obvious what Apple has been up to with CarPlay, did the Apple stock skyrocket? It did not, and that's because investors and analysts may not yet quite comprehend the long-term payoff of CarPlay.

It's a low-key, helpful solution without a lot of sex appeal. However, sex appeal doesn't guarantee long-term growth.

What Some Want

It's becoming clear now, in light of the non-reaction to CarPlay, that the real motivation behind the cries for innovation is for Apple to dream up something cool, something vaguely defined, that excites the geeks. This would be a bolt-from-the-blue, such a breakthrough that competitors would be left gasping for years. Apple customers would once again be able to gleam with pride and self-esteem.

Apple would dominate that market for a few years, as it did with the iPad initially, and short-term growth would be restored.

What We Need

Watching Apple these days, it's not hard to see that this is a company dedicated to solving deep human problems, not conjuring up geek toys. What then are we really lacking? The question is not what cool toy can be invented.

Rather, the question is: what human problem needs to be solved?

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