Apple’s search for its next billion-dollar product

Some Apple followers have begun worrying that the company has lost the secret formula that made it so successful during the Steve Jobs era.

But instead of the end of Apple’s innovation streak, what we may be witnessing is Apple’s response to a mobile device market that’s all grown up. The smartphone, in its current form, has been around for six years now. Tablets are replacing PCs. When consumers already own an average of five mobile devices, according to Yankee Group, new category killers that give us even more stuff to carry around aren’t what we really need.

“I’m not buying the ‘Apple isn’t innovating because it hasn’t done a category-buster in three years’ story,” said Carl Howe, analyst at Yankee Group. “It’s a bit like saying Toyota (TM) is doomed because Toyota’s latest category-buster, the Prius, is 11 years old.”

In a mature market, innovation is bound to focus on extending the usefulness of what’s already out there, the same way that webcams, microphones, touchpads and touchscreens came along after the PC and enhanced the way we interact with our machines. Watches, glasses, shoes and wearable computing gizmos that all connect to one another seem like a logical evolution — if not revolution — of the mobile device space.

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