I took a trip to the future last month, and boy, was my flux capacitor tired.
I checked into how a few companies were doing in 2010, but I promised a few more field trips, and I'm going to start with Apple (Nasdaq: AAPL ) . It's called Apple Entertainment in 2010, but folks still just call it Apple for short. What's the company up to in two years? How did some of its 2008 initiatives play out?
Well, I'm the writer bold enough to give you a full account of my completely fabricated trip into 2010.
Still the Mac Daddy
As you probably expect, Apple continues to nibble away at the market share in the desktop and laptop computing space. Apple's domestic market share has doubled to 12% by 2010, well ahead of when market-watchers like Gartner figured this would happen.
There are several reasons for Apple's heady ascent. Here in 2010, it's all about connectivity. Web-stored applications and digital entertainment dominate the computing experience. Some feared that this movement would actually hurt Apple, since leveling the experience would drive Microsoft (Nasdaq: MSFT ) fans to more affordable open-source solutions instead of going upmarket to Apple, but the migration went both ways. Usage for both Linux and Apple operating systems has surged dramatically.
Apple is still the trendsetter when it comes to style, design, and pushing the technological envelope. There are actually MacBooks rolling out in 2010 that weigh less than those Air models that were all the rage in 2008. But these come with an optical drive to watch Blu-ray flicks or experience enhanced music CDs.
E.T. iPhone home
You're still back in February 2008, right? That's when investors sold off their Apple shares, fearing that too many iPhones were collecting dust at AT&T (NYSE: T ) , or that users were unlocking their phones to go with carriers other than AT&T, denying Apple its meaty monthly royalties -- in the hundreds of dollars per user -- from the phone company.
You're worrying for nothing, my friend. Those initial numbers were overblown. Apple still easily hit its 10 million cumulative-unit sales mark by the end of 2008, with the vast majority of those iPhones going to happy AT&T converts.
Apple just got smarter about it. It eventually bumped the price up to $599, with an instant $200 rebate on sales tied to AT&T two-year contracts. And while Apple had the power to disable the renegade phones all along, it never chanced souring its reputation. It simply worked with AT&T to drum up nifty features that could only work on that particular platform.
One nation under iPod
Of course, we're still tethered to our iPods, even if growth in computers and iPhones has propelled Apple's earnings growth over the past two years.
Don't let that pop your earbuds, Apple fans. Apple is still the leading player -- by far -- in digital music players. But the market's not as big as it used to be. Cell phones -- including Apple's own iPhone -- and smaller portable computers helped eliminate the need for toting around two costly trinkets, what with digital music storage built into nearly every device in 2010.
Nearly every car has a built-in hard drive, too, making it easier for commuters to load up their cars with tunes without having to carry their iPods around. The iTunes Music Store is still relevant, though, since more and more emerging artists have inked exclusive digital distribution deals through Apple.
Apple even offers a breakthrough music-subscription program that makes the 2008 versions of Napster (Nasdaq: NAPS ) and Rhapsody seem primitive. The company teamed up with Google (Nasdaq: GOOG ) to offer an ad-supported model, but also offers a la carte artist-specific plans that encourage popular artists to record even more iTunes-exclusive content.
Rather than competing against companies like Amazon.com (Nasdaq: AMZN ) on price in this DRM-unshackled future, Apple has made the most of its girth by offering DRM-free tracks that one can only legally get through Apple.
Back to the future
Not everything that Steve Jobs touches turns to gold. It's just not possible. As great as Apple has been -- and continues to be in 2010 -- there are still snickers when cynics bring up Apple flops like Taligent, Newton, and Apple TV.
D'oh! You probably still don't know that even the second incarnation of Apple TV proved fruitless. It wasn't a complete loss. Apple was able to dust itself off and team up with TiVo (Nasdaq: TIVO ) to put out a slick Apple-licensed DVR before the 2009 holiday season. That one is off to a bit of a better start, though the niche may never be Apple's strong suit.
Either way, I'm just here to remind investors that Apple will become a more important company in the future than it is from your limited 2008 vantage point.