Apple is often credited with helping to launch the BYOD movement. In a post-BlackBerry world, the iPhone has become the de-facto enterprise smartphone in many sectors and organizations because it suffers from little device and OS fragmentation compared to Android devices.
The company has also been on a wild ride in the eighteen months since Steve Jobs turned the leadership of the company over to Tim Cook just weeks before he passed away. During 2012, Apple exceeded most expectations for most of the year while its stock price soared to record-setting levels.
Heading into 2013, however, Apple faces a new range of competing products in virtually every market.
- Android phones and tablets have matured quite nicely and some include serious enterprise security and integration features.
- Large screen Android handsets and phablets continue to blur the line between smartphones and tablets. They are also proving to be something that many consumers and business users appreciate because of their flexibility.
- Microsoft has brought Windows 8 and its ARM-based sibling Windows RT to market while also entering the consumer and business PC hardware market for the first time with its Surface tablets. The company also released a significantly improved version of its Windows Phone mobile OS.
- Several PC manufacturers have delivered new devices that take advantage of Windows 8's touch-first design to create devices that can serve as both tablets and full-featured notebooks, an approach that competes against both the iPad and the Mac.
- Amazon has solidified the foothold that it gained in the tablet market with the introduction of a broader range of Kindle Fire devices and back-end services that are designed to compete with the iPad head-on in education and that have real potential in business as well.
All of these factors are looming alongside reports that Apple has been cutting its demand for iPad and iPhone components from its suppliers, most notably touch screens for the devices. The potential reasons that have put forth for the cuts include overestimating demand for the iPhone 5, preparing to launch a successor to the iPhone 5, plans to introduce a second low-end iPhone for developing markets, adjustments in component suppliers and the supply chain, the iPad mini is canabalizing sales of other iPads (and possibly iPhones), competition from a range of low-end Android handsets in China and other emerging markets, and the overall sense that Apple has ceased to provide major innovations in the recent release of iOS 6 and the iPhone 5 and is falling behind in the mobile market as a result.
The truth is that while there is enough information to speculate about Apple's overall health as a company, its immediate and long-term plans, and the place for its products in the workplace going forward, there simply isn't enough hard data to come to a solid conclusion. That said, we will get some hard data when the company holds its quarterly financials call tomorrow afternoon.
Here are some of the numbers that will be significant to judging Apple's overall place as a key player in the consumerized IT and enterprise mobile markets (both the growing BYOD market and the traditional company-owned space).
- Overall iPhone sales - Obviously, this will truly illustrate iPhone 5 sales beyond the initial record-setting launch weekend. More important, it will provide a sense of whether or not iPhone sales are growing and how quickly relative to the overall smartphone market and to specific competing products. If Apple breaks out sales data by iPhone model, it may also indicate whether Apple's current way of diversifying the iPhone by selling the previous two generations is effective or whether the company might be planning an alternate strategy.
- Overall iPad sales as well as the ratio of iPad to iPad mini sales - Again, the sheer numbers should indicate how the iPad is performing. With essentially three product lines - the current iPad with retina display, the iPad mini, and the iPad 2 - it'll be interesting to see how each segment is doing as well in a much more competitive market and whether there is any real cannibalization from the iPad mini.
- Education sales - Apple has had a lock on much of the education market with the iPad until now. That could change now that Amazon is delivering a viable and even formidable product - the Kindle Fire and Whispercast app/content deployment and device setup. The education market is somewhat predictive of future enterprise adoption. As students move from high school and college into the workforce, many tend to have clear ideas about what technologies they prefer to use. With BYOD becoming the norm, this impact is likely to be magnified.
- Business and enterprise adoption - Apple can be cagey about enterprise sales and often uses references to the percentage of fortune 500 companies with iOS devices (either deployed, used via BYOD, or in pilot projects). However, the company usually also indicates some year over year growth and highlights one or two specific companies that have either done large-scale deployments or offer an example of iPhone/iPad potential being realized in a practical way.
- Mention of cyclical buying habits - One trend that has emerged thanks to the Apple rumor mill is that many people hold of buying new Apple products until a new model is released. This leads to a series of boom and bust periods for the company, which can impact device availability, costs, and the overall impression of Apple's success or failure in a given area.
- App Store data - In addition to the overall number of apps and amount of money made by developers, both of which illustrate the growth and developer interest in iOS as a platform, Apple sometimes gives hints of the types of apps that users are looking for or that developers seems to be concentrating one. One particular area to watch for is mention of the business to business sales option that Apple quietly introduced this year along with and indications about internal enterprise app development.
- Apple's position within the Chinese mobile market - China is a major market for Apple and will no doubt be the focus of some questions from investors. Tim Cook has said that China will eventually become Apple's biggest market. Growth there ensures that Apple isn't being priced out by low-cost competition.
- European sales - The euro crisis has been cited by Apple in previous calls when discussing European sales, particularly in hard-hit countries like Spain. This is certainly relevant to Apple's success but it also highlights the potential of Apple out pricing itself in markets with minimal growth or recession.
- Details of relationships in emerging markets - Emerging markets are seen by many analysts as key for Apple. Many developing countries rely almost exclusively on mobile devices and service providers from broadband infrastructure. Again, there are concerns about Apple pricing itself out of these markets and it remains to be seen if Apple's current diversification of devices will fit in such areas.
- Relationship to competing technologies - Although rarely a focus on financial calls, it's common for investors to ask how Apple views itself compared to specific competitors. Most answers aren't particularly detailed, but sometimes they do give significant insight - Tim Cook's comparison of Windows 8 to a converged toaster-fridge being an excellent example.
- Cash on hand - Apple's cash on hand translates to its agility and its ability to purchase or license specific technologies or whole companies. That gives the company the ability to switch gears pretty quickly if needed.
- R&D spending - Obviously, research and development spending is key for any technology company. Given Apple's approach of focusing on specific ideas and keeping a tight product focus, R&D spending often shows that Apple has something major in the pipeline.
Apple reports earnings tomorrow around 4:30 ET. We'll bring you the news then.