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Where iTV fits into Apple's future

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Apple Store in Beijing.

It looks as if the next big Apple product will be...big! After moving away from the computer business into the much more portable consumer device and cellphone game with iPods, iPhones, and iPads, the next frontier for Apple is reportedly TV. And not just any TV, but a TV that will, naturally, completely re-invent the whole idea of TV according to Apple's design values.

Felix Salmon has been pondering the "What's Next" question for Apple and comes to an essentially mathematical conclusion:

Today, however, Apple’s market capitalization is $362 billion. If the company invents a new product which is just as successful as the iPod, and which makes Apple just as much money, and which is completely unanticipated by the market, how much should the stock rise? The present value of $25 billion in future profits is still substantial — but even if you put it at $20 billion, that just gooses the share price by 5% or so. If you look at Apple today, the company’s cash in the bank — its liquid assets — is a significantly larger number than the total revenue it’s made from every iPod ever sold.

If you grow to 50 times your previous size, your new products don’t become 50 times more successful. Or even 10 times more successful. Apple, like all companies, has certain economies of scale, and it has millions of people devoted to its ecosystem. But the market isn’t going to give it credit for having a pipeline filled with unknown products that are going to be bigger than the iPod. The iPad will evolve; the Apple TV will get Siri voice control; the computers will get faster and thinner. All of these things will be profitable for Apple — the company’s not going away any time soon.

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It's Black Friday versus the eurozone crisis

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Black Friday at Macy's in Manhattan: Shoppers lined up.

Welcome back! I hope everyone had a happy Thanksgiving. In fact, it appears as though many of you did enjoy the holiday — enough to hit the malls in force on Black Friday. According to the LA Times, retail activity was up 16 percent over last year. And the markets are responding: all the major stock indexes have climbed this morning. 

Meanwhile, the neverending eurozone crisis appears to have entered a new phase. We keep waiting for an endgame here, with the likely demise of the euro single currency. But then Germany and France get together to pull the eurozone back from the brink. This dynamic has caused predictable volatility in world markets for months now. But in the U.S., there's at least some improving news, giving markets the chance to rally on their own and somewhat ignore Europe.

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