Explaining Southern California's economy

Will online media ever converge?

Engagement patterns by device

Matthew DeBord/KPCC

Media engagement patterns vary greatly depending on what device — PC, smartphone/cellphone, or tablet — the user is employing.

I attended a conference about a week ago put on by students and alumni from USC's Marshall School of Business. It's called "E2: Evolution of Entertainment Conference," and it's designed to bring business, entertainment, technology, and media together. Makes sense, as all four are important to the Southern California economy — and to USC students.

The conference is now in its fourth year, drawing seasoned media, entertainment, and business professionals to USC to provide their insight.

On one of the panels, Joe Perez, who just left an executive role at Demand Media, made an interesting comment. He said that he'd just come across some research that indicated PC, cell phone, and tablet users engage in unique daily online and/or wireless patterns. I've created a simple, some might say crude, drawing (right) that summarizes these patterns:

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Where iTV fits into Apple's future

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Lintao Zhang/Getty Images

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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