3 Apple Surprises You'll See Before Year's End

NEW YORK ( TheStreet) -- The biggest news affecting Apple's ( AAPL) stock price these days is Carl Icahn's ownership in the company.

Icahn's recent tweet confirming his stake in Apple has helped move the stock over $500/share. He has been promoting the idea that Tim Cook is in favor of a large stock buyback to continue to support the stock price.

Apple's stock has been disregarded for most of this year as critics have complained that its best days are behind it.

However, there are still many new surprises to expect out of Apple in 2013. Here are three:

1. iOS 7 is going to be the big surprise this autumn, not the 5S.

Most people are expecting the newest iPhone to be the big surprise of the Sept. 10 launch event.

After all, it's all about the phone, isn't it? People have been obsessing over whether the new phone will have features such as near-field communication or its color. Will the new "gold" color help drive sales into the end of the year?

But I think there's going to be a much bigger surprise over the upcoming release of the iOS software that's due around the same time as the new iPhones.

Every year, Apple comes out with a new version of its mobile software. Up until now that new update has been an incremental improvement over the previous year's version. There have always been new little improvements but it's never been a dramatic shift.

That's about to change this year because Jony Ive has taken over responsibility for the software. The beta versions of iOS 7 show a striking break from the past. Making a big change is high risk and also high reward.

I think this is going to be a high reward outcome for Apple. People will likely really like the changes, which make the software more intuitive and fun.

There will be many people who will rediscover why they fell in love with the iPhone in the first place -- because it was just so easy and worked the way they've always wanted a phone to work.

The new software will help drive new phone buyers and increase the loyalty of existing users.

2. The Apple Band is going to be a runaway hit.

The consensus view is Apple will deliver a new wrist watch that a lot are calling an iWatch. It's unclear when it will be shipped.

Apple has clearly been hiring people with this biometric expertise for months now.

Last week, Apple made its biggest hire yet, bringing on board a top adviser to Nike ( NKE) for its FuelBand product. (Coincidentally, Tim Cook sits on the Nike board. So this is a product area he knows well and has for many years now.)

Most think the iWatch will be a niche product and the masses will shrug their shoulders at it. Apple doesn't go after any new product it believes will be a niche.

Just as people underestimated how popular a new tablet called the iPad would be, I sense the world is way behind in its thinking of how popular a new watch or band from Apple will be.

I tend to think it will be more of a band. I've been using the FitBit Flex for a couple of weeks now and it is addictive and inconspicuous on my wrist. I don't even notice it anymore. Yet, I'm constantly checking my FitBit app throughout the day on my iPhone -- which wirelessly synchs to my app -- on how many steps I'm walking along with calories burned, hours slept, water I've drunk, etc.

I expect Apple to take measuring this type of health information to the masses. I also think it'll integrate other helpful communication info to a band such as clock, email, key messages, stock info, etc. -- things you always check throughout the day once you've dug your phone out of your purse, breast pocket or back pocket.

I suspect we will see a new Apple Band before the end of the year, just in time for the holidays -- and it will be a big hit.

3. 5C will be embraced by the emerging markets and will make Apple a boatload of money.

Most Wall Street analysts are not excited about the rumors we keep hearing about a lower-cost iPhone -- called the 5C -- aimed at the emerging markets.

Their view is Apple just won't make typical Apple margins in this area. So, if it's not going to make money, why do it?

But it's critical for Apple to play in this lower-cost space. Right now, Apple is being ripped to shreds in China because Android is seeping everywhere. Everyone in the emerging markets is getting off their flip feature phones and moving over the Android.

Every Android user is a lost opportunity for Apple. So, from a market share perspective, it's a must.

From an app perspective, too. For the longest time, Apple's iOS has been the first app developers build on. Android users -- even though they're greater in number -- have not been as active in using their apps. But that's slowly changing and the raw numbers show that, soon, they will be so huge that developers will have to build for them first.

That's a big threat to Apple. Therefore, winning as much market share in these emerging economies is even more critical to Apple's future.

So that's why Apple needs to compete, but can it make a lot of money there? That's going to be the biggest surprise, in my view. Apple has a history of not making a product unless it can make money off it. The company will move heaven and earth in its supply chain until it makes money from it.

It won't be the margins you get when selling a $649 device, but it also won't be zero or less, like Amazon ( AMZN).

The Apple profits will still continue to tick upwards.

All in all, it should be an exciting autumn for Apple investors.

At the time of publication the author was long AAPL.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

Eric Jackson is founder and Managing Member of Ironfire Capital and the general partner and investment manager of Ironfire Capital US Fund LP and Ironfire Capital International Fund, Ltd. In January 2007, Jackson started the world's first Internet-based campaign to increase shareholder value at Yahoo!, leading to a change in CEOs in 2007. He also spoke out in favor of Yahoo!'s accepting Microsoft's buyout offer in 2008. Global Proxy Watch named Jackson as one of its 10 "Stars" who positively influenced international corporate governance and shareowner value in 2007.

Prior to founding Ironfire Capital, Jackson was President and CEO of Jackson Leadership Systems, Inc., a leadership, strategy, and governance consulting firm. He completed his Ph.D. in the Management Department at the Columbia University Graduate School of Business in New York, with a specialization in Strategic Management and Corporate Governance, and holds a B.A. from McGill University.

He was previously Vice President of Strategy and Business Development at VoiceGenie Technologies, a software firm now owned by Alcatel-Lucent. In 2004, Jackson founded the Young Patrons' Circle at the Royal Ontario Museum in Toronto, which is now the second-largest social and philanthropic group of its kind in North America, raising $500,000 annually for the museum. You can follow Jackson on Twitter at www.twitter.com/ericjackson or @ericjackson.

You can contact Eric by emailing him at Dr.eric.jackson@me.com.

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