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26 February 2013

Apple's search for its next billion-dollar product

A larger iPhone, a smaller iPad, athinner Mac and a taller iPod are what count for innovation at Apple these days.

The slate of rumors about upcoming Apple products is similarly uninspiring. An even bigger or cheaper iPhone? A watch? 

Some Apple followers have begun worrying that the company has lost the secret formula that made it so successful during the Steve Jobs era.

But instead of the end of Apple's innovation streak, what we may be witnessing is Apple's response to a mobile device market that's all grown up. The smartphone, in its current form, has been around for six years now. Tablets are replacing PCs. When consumers already own an average of five mobile devices, according to Yankee Group, new category killers that give us even more stuff to carry around aren't what we really need.

In a mature market, innovation is bound to focus on extending the usefulness of what's already out there, the same way that webcams, microphones, touchpads and touchscreens came along after the PC and enhanced the way we interact with our machines. Watches, glasses, shoes and wearable computing gizmos that all connect to one another seem like a logical evolution -- if not revolution -- of the mobile device space.

That doesn't mean Apple can kick back and simply enjoy the multi-billion dollar successes the company has created. Sales of Macs have begun to slip, iPhone sales are showing signs of plateauing in developed markets,iPad profits are being brought down by the cheaper iPad mini, and iPods have been in a multi-year decline. Apple's stock has fallen by a third over the past five months.