Apple will rule the living room by 2013, Forrester says

Computerworld - Apple Inc. will rule the living room in five years, analysts said Thursday as they slapped down the Tarot cards to predict what the company would be up to in 2013.

"The home destination is where Apple wants to roost," said James McQuivey, an analyst at Forrester Research Inc. who co-authored a report released today grandly titled "The Future of Apple Inc."

According to McQuivey and his Forrester colleague, J.P. Gownder, Apple will leverage its existing products and services -- ranging from the Mac to its retail Apple Stores to the Genius Bars in those stores -- to be one of the companies that unites home audio and video with IT.

Among Forrester's predictions are those that bet Apple will:

• Crank out a home server that "doesn't contain the word 'server.'"
• Produce an all-in-one super remote -- something Forrester's dubbed "AppleSound" -- that controls everything musical in the house, including iPods, the home stereo and audio-playing computers.
• Sell network-enabled digital photo frames and room-specific "clock radios" that stream images and tunes from the server.
• Extend the AppleTV into Blu-ray territory, or morph it into an Apple HDTV line.
• Offer in-home installation services for all this gear, using its Genius Bars as a starting point.
• Revamp its Apple Stores into retail outlets that push the digital living room/digital lifestyle.
• And amp up iTunes so it ties together digital content with cloud-based updates, remote management and editing.

"We haven't fabricated anything out of fantasy," argued McQuivey. "There's nothing from Star Trek here. But Apple clearly has bigger ambitions than just the Mac base, so we started thinking about the ways it could get there, and then how they could do that by going to the next level, and then the next level after that."

To get to their living room conclusion, McQuivey and Gownder also spelled out what Apple would not become in five years. It won't, for example, turn itself into a company that serves enterprise IT, or one that boasts an end-to-end presence in the mobile market by purchasing a mobile carrier or running its own network.

"The home is the most likely path for Apple, given the other alternatives," said McQuivey, noting that envisioning Apple in other areas inevitably led to dead ends. "In mobile, for example, Apple just can't go far enough."

In any case, Apple has bigger ambitions, and always has, McQuivey said. "Apple has never been about only selling technologies. What it's really interested in, at least since Jobs' return, has been in having a love affair with consumers. And there's no better place for that love affair to culminate than in the home and the living room."

Apple even has some advantages over rivals in some of the spaces that Forrester has designated as the company's future territories, said McQuivey. One, he said, is its relatively small size.

"We've talked to Best Buy and Comcast about home installation because they're trying to do things very similar [to what we predict for Apple]," he said. "But the fundamental problem for them is scale. In order to promise every potential customer a service like this, they have to have enormous scale."

Apple, on the other hand, "can just pick and choose its markets," said McQuivey. "It will appeal to a very small and elite audience, so it wouldn't have to get the structural scale of a Best Buy or Comcast."

In Forrester's future for Apple, the Mac -- the computer part of its business -- will be retained, but it's likely to end up as the focus for activities such as editing video, purchasing digital content, sharing photos and accessing the Internet. But McQuivey denied that he was de-emphasizing the Mac, saying that other interests of Apple would continue to pull users toward the Mac platform.

And as for the likelihood of all this coming true, McQuivey was, not surprisingly, optimistic about the chances. "We're not pretending to have some kind of crystal ball, but I'd be surprised if we're wrong on the fundamentals, even if we are on the products and the timing.

"I think the chance is very high, better than 50-50," he said.

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