iPhone 6 innovates cloud services

Apple's [AAPL] fast expansion of its US-based data centers in conjunction with its purchase of indoor mapping service firm, WifiSLAM together suggest plans for new breeds of connected service as it seeks to differentiate itself from consistently imitative competitors.

[ABOVE: Nokia's Stephen Elop throws toys out the pram.]

Software is design

The promotion of hardware designer, Jony Ive, to oversee user interfaces in Apple software also suggests a new path in which Apple will use software and services to provide distinctive innovations within the smartphone market.

That's easily understood against the backdrop of recent legal cases in which the company has attempted to sue rivals for "imitating" its products. These cases have demonstrated how challenging it is to convince courts of hardware patent abuse. Software patents may turn out easier to protect.

Thus it makes sense for Apple to focus its innovation on software -- competitors will find it far more challenging to protect themselves should they reverse-engineer or blatantly copy Apple's software designs.

Following this logic it becomes strategically evident that the company will seek to differentiate its products by offering software-based features and services that will be unique to its platforms.

These unique offerings, in conjunction with its best-in-class hardware designs and off-the-charts reputation for consumer satisfaction should help the company consolidate its current position at the leading edge of the smartphone industry.

iCloud at the center

The focus on iCloud is clear. Apple has been building a vast network of the world's greenest servers across the US, and is rumoured to be investing in similar facilities in other key territories, such as Europe.

Speaking during the Q1 2012 fiscal call, Apple CEO Tim Cook described iCloud as a "fundamental shift" that "recognizes people had numerous devices, and they wanted the bulk of their content in the cloud…It's not just a product. It is a strategy for the next decade."

Apple has been quietly developing iCloud services. Eddy Cue's iTunes team is thought to be negotiating to offer streaming music and movie services. Its recent acquisition of UI technologies from Maya-Systems suggests better file system navigation for iCloud, potentially delivering a similar file browsing experience on any device, including the Mac.

Siri and Maps development continues, and while the company has problems getting its messages across given the increasingly snide nature of Apple reporting, it seems clear these two services will eventually form part of the company's unique service offerings. It interests me that many reports this morning discuss speculation as to Apple's quarterly results, but completely miss JD Power's factual report naming the iPhone as the most satisfying smartphone for consumers for the ninth successive year.

Setting the scene for M2M

Apple's newly acquired WifiSLAM technology lets mobile apps detect a phone user's location in a building using WiFi signals. It's being described as a service that supports "indoor mapping and new forms of retail and social networking apps."

To my mind the technology may also form a strong building block for Apple's potential future adventures in the provision of multiple connected household electrical devices.

The focus isn't just on software as the company continues to develop new hardware configurations. For example, weekend reports suggest the firm may introduce an iPhone equipped with the capacity to accept pen (rather than stylus) as it deploys new display technologies many times more sensitive than what's available today.

These many shreds of evidence suggests Apple intends a quantum leap in innovation within future iPhones, hinting that while it sees competing devices as threats, its response will be to hit them -- hard -- with new features that cannot easily be matched or imitated.

This matches the current consensus among Apple-focused analysts that the company needs to deliver major innovation in order to maintain its smartphone advantage.

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