Apple: The Sick Old Man of Tech

It was a bit like predicting the eventual death of our Sun.

The inevitable ending would come very slowly, at a point in time that’s hard to imagine, but its implications would change the fabric of reality as we know it.

Just as our Sun is one day destined to expand into a red giant, consuming the inner planets — including our own — all the while cooling as its nuclear fuel runs out, so too is the biggest name in consumer technology destined to end.

To understand how Apple got so big and dominant in the personal device market, we have to look back to 1997, when Steve Jobs first returned to save what was then a company just months from bankruptcy.

Within four years of his return, Apple, which had been failing to compete with the expansive field of PC and laptop manufacturers, introduced iTunes, which forever changed the way music was purchased, owned, and stored.

Eight months later, Apple introduced the iPod and effectively re-invented itself.

After that, the DNA of the iPod led to the groundbreaking, industry-dominating iPhone, as well as the industry-creating iPad.

Within a decade of Jobs’ return, Apple Computers had become Apple Inc. And just as the name suggested, its business model had broadened to appeal to the modern consumer’s every desire.

Apple’s second act propelled it back to the top, and for a while, the company, giant as it was, behaved much like the pioneering, exciting, vibrant company Steve Jobs first founded in 1976.

Apple’s 20-Year Cycle

Unfortunately, the third act was on its way, and this time, there was no Jobs around to take it through yet another evolution.

Steve had departed again — this time permanently.

In the almost four years following his premature death, Apple, the giant, unquestioned sun at the center of the consumer tech solar system, has starting to show signs of age.

In terms of size, it hit an all-time peak this summer at $740 billion — about the GDP of Saudi Arabia, Switzerland, or Iran and Austria put together.

In terms of market share, things have also never looked better. More people today have more Apple products than at any point in the past.

In fact, people have more Apple products than they’ve ever had products of any company that qualifies as a competitor.

All of this, however, has put the tech star in a very precarious situation.

With its market niche more or less saturated for every class of device it sells, there is only one way to keep growing as it has been: to introduce new devices in new classes for its enormous and historically loyal consumer base to buy.

Apple always had a built-in strategy to keep that particular train rolling: It simply released a new version of the iPhone every year.

Repackaged; Repainted; Repetitive

Last year, we got the iPhone 6, so this year, we’re getting the augmented iPhone 6S, with some added features. For a select group of devoted Apple fanatics, this will mean an upgrade, cost be damned.

For some others, it will be an opportunity to get into the iPhone market for the first time.

For most existing owners, however, it’s a non-event.

This means that despite Apple’s rapid rate of new model release, in order to maintain its growth rate, it needs totally new products.

The Watch could be just such a product, offering the company’s first true wearable device.

The problem is that it needs an iPhone to work. The other problem is that unlike Apple’s game-changing products of the past, the Watch is entering a field already cluttered with smartwatches:

There’s the Pebble Steel, the LG G Watch, the Samsung Gear, the Motorola Moto 360, and no less than three generations of smartwatches from Sony — none of which require another wireless device to operate.

As far as Apple rollouts go, this one is doubtful to reinvent or even substantially change the market. It will be, as few successful Apple products have been, a questionably functional, high-priced entry into a market full of competition.

Doesn’t sound like the dominant industry leader we all know so well — but, in fact, it sounds exactly like the stagnating, oversized, expanding red giant that Apple was back in the 1990s.

Back then, Apple’s business model was to release an endless string of slightly modified, different-sized, different-shaped Macintoshes.

You Can’t Copy Genius

An idea that was once new and groundbreaking became old, tired, overused, and, worst of all, overpriced within a field of very capable, very affordable Windows-equipped competitors.

Today, Apple is sliding down the same slippery slope with its entire product line.

iPads of all different shapes and sizes, phones, laptops… all the same DNA, all the same functionality, variously priced for various people.

But nothing truly new.

This past Tuesday, Apple held a much-hyped event focusing on the release of the latest iPhone generation: the 6S.

It also released the oversized 12.9-inch iPad.

Both boast better cameras, faster processors, updated user interfaces, and some new features including the Rose Gold color scheme.

As USA Today put it:

Wednesday’s iPhone update seemed more like another episode of the old Must-See TV: an incremental plot advancer for what has long been hottest tech show in the business.

And its upcoming events scheduled for later this month sound about as exciting.

Not exactly reminiscent of Steve Jobs’ legendary product launches, which looked and sounded more like rock concerts than keynote addresses.

Bloated and Post-Prime, But Still the Boss

Of course, as Apple bulls will continue to preach, the company’s consumer base still has many years of life in it — especially if it keeps rolling out new versions of must-have items.

Meaning, in real terms, that unless Apple does something to reinvent itself for its third act, it will, like our Sun also eventually will, slowly burn out and dissipate.

At this point, both events appear to have similar chances of taking place…

There’s not much to do about Apple unless you’re interested in highly leveraged short positions in a company that will probably take years to start to truly decline.

What investors can and should do at a time like this is find the company that has the power to disrupt Apple’s dominance.

Because once that market dominance begins to wane, you can bet the vacuum left in its place will be filled by the next generation of tech brands…

Brands you may not have even heard of yet.

The Future Starts Small

The companies destined to grow the most in this evolving market are the companies that will do what no tech firm has even attempted up to this point — cater to the needs of 4 billion people who own no personal devices, who seldom or never use the Internet, and who cannot afford the products or services currently offered by today’s most famous tech brands.

I’ve been compiling a report on one company that could very well rise to the heights of today’s most recognizable names in tech on this emerging trend alone.

With more than 60% of the world’s population just waiting for affordable wireless Internet, its time has come.

Keep your eyes open for this report. It could just be the best investment opportunity to hit this sector since the unveiling of the first Macintosh.

Fortune favors the bold,

Alex Koyfman

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His flagship service, Microcap Insider, provides market-beating insights into some of the fastest moving, highest profit-potential companies available for public trading on the U.S. and Canadian exchanges. With more than 5 years of track record to back it up, Microcap Insider is the choice for the growth-minded investor. Alex contributes his thoughts and insights regularly to Wealth Daily. To learn more about Alex, click here.