i Worry? Apple Launches Another Product

As other companies struggle to release exciting products, Apple has got the routine down.
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CUPERTINO, Calif. (TheStreet) -- A decade's worth of hot tech toys, hype and heightened innovation has kept the pressure on Apple (AAPL) - Get Report. So where's the cider?

A string of successes that began, arguably, with its OS X operating system and continued through iPod, iTunes, Apple Store, MacBook, iPhone and App Store drove Apple's stock price from $3.28 in December 1997 to more than $210 last month and has lent an almost comedic gravitas to each Apple product launch. With Apple fresh off a stellar fiscal first-quarter, holiday-season earnings report and the launch of its iPad tablet today that's just slightly less coveted than the two that Moses brought down from Mount Sinai, can the company still function beneath the weight of its expectations?



has done a good job of balancing the 'wow' versus the 'now,' " says Ross Rubin, executive director of industry analysis at

NPD Group

. "A large part of the success has been developing those products, but also in how those products have been marketed and sold."

If Steve Jobs and Co. are sweating over product development and innovation, it's not showing. In 2005, well before the iPhone, MacBook, iPod Touch or even Apple TV slipped into the consumer conscience and revenue was roughly $14 billion, Apple spent $535 million on research and development. Last year, when Apple's revenue grew to more than $36 billion, the company spent $1.3 billion searching for the next big thing. That's just under 4% in both cases, with a slightly lesser share spent in 2009.

Meanwhile, though Apple is putting nearly $3 billion more into twee marketing campaigns filled with happy hipsters than it was five years ago, its selling expenses as a chunk of its sales are down 2%. Susan Kevorkian, an Apple analyst for


, says that's little surprise, considering how deliberate Apple has been with its product launches.

"Given Apple's success in the market, there's more pressure on a company that has been successful in the past to be successful in the future," Kevorkian says. "When a company like Apple launches a new consumer product, it's not a casual experiment for the company or its consumer audience."

Nor is it always original. Apple's iPhone and its giant 9.7-inch sibling iPad are primarily extensions of the iPod platform and, tangentially, the failed Newton PDA before it. Each step built on an existing platform as new technology became available and expanded into a new area.

In the iPhone's case, the obstacle wasn't so much putting iPod technology on to a phone and a camera, but leaving Apple's comfort zone of PCs and portable devices for a smart-phone market that required a whole new set of skills. When Apple dropped "computers" from its name in 2007, it traded up in weight class from computer competitors like


(MSFT) - Get Report

to consumer producers and providers like


(SNE) - Get Report



(VZ) - Get Report


"If Apple's goal was to be a service provider, per se, it had that opportunity when it introduced the iPhone and opted not to go that route," Rubin says. "Jobs said we're going to do what we do well and we'll let


(T) - Get Report

do what they do well, though there's been some question in the last three years about how well AT&T does what it's supposed to do."

Perhaps this is why Apple took AT&T along for the iPad ride. Though Apple cut out the middle man by producing iPad's processor itself and negotiating directly with publishers, labels and entertainment companies for iBooks and iTunes, there are still some areas where it seems ill at ease.

TV is one of those areas, as evidenced by the one Apple release of the past decade that failed to make a big noise other than "thud": Steve Jobs' "hobby" Apple TV. Despite industry estimates that it would sell 6.6 million units in 2009, Apple TV and the investment behind it seemed like lost causes as Apple focused on mobile products instead of the "three screens" driving companies like





toward product integration.

However, if Apple gets its AirPort system together and can make the iPad a television screen that communicates with its other devices, the tablet will not only alleviate pressure on Apple's innovation team, but pull up its average.

"The obvious choice for Apple would be to strengthen its position in the living room by redeveloping Apple TV," IDC's Kevorkian says. "Perhaps they're going to wait and see how things go with the tablet before they do that."

-- Reported by Jason Notte in Boston.

Jason Notte is a reporter for TheStreet.com. His writing has appeared in The New York Times, The Huffington Post, Esquire.com, Time Out New York, The Boston Herald, The Boston Phoenix, Metro newspaper and the Colorado Springs Independent.