Is Apple's "Next Big Thing" Vaporware?

In Silicon Valley, there's a term for products that a company makes bold statements about and always seem on the cusp of launching but never quite materialize - vaporware.

And believe me, over the decades there have been more vaporware companies than real ones.

What's more, it's not uncommon for once-respected names to become vaporware makers over time.

One of the big questions now is, with the death of visionary Steve Jobs, the growing Android base, and the next generation in smartphones, is the "Next Big Thing" for Apple Inc. (Nasdaq: AAPL) nothing more than vaporware?

For investors slammed by the stock's 39% decline from its 2012 high, the question is hardly rhetorical.

Today, I'm going to explore what's in store for the whales of the tech space and tell you where I stand on whether their visions will be actualized or vaporized.

The Best Companies in the World

Here's the thing. U.S. high-tech stocks remain the greatest source of wealth for investors in world history because their companies do two things well:

  • They constantly push the envelope.
  • They deliver high-octane growth.

Just look at Apple's recent history. It changed the way millions listen to music with the iPod. And it followed up shortly afterward with the iTunes Store, then the standard in digital music distribution.

Apple set the world on its ears again in 2007 with the iPhone, which now sells at a rate of well over 100 million units a year. Just three years later came the smash success of the iPad, still the device by which tablets are judged.

Those are just a few of the reasons why its stock went on one of the wildest rides ever. It reached an all-time closing high last Sept. 19 of $702.10 a share. Ten years to the day before, the stock closed at $14.58.

That's a return of an incredible 4,715%...

But with its stock now hovering around $425, investors have had little to get excited about and few hints about where Apple might be taking the next generation of technology.

Even stock analysts complain openly that CEO Tim Cook seems to have run out of fresh ideas. They noted that in the most recent quarterly earnings call three weeks ago, Cook promised "amazing" things ahead. Trouble is, Cook didn't say what those are.

And Apple's top rivals sense blood in the water.

And to the joy of their investors these firms aren't keeping mum about their plans.

Here is a look at how three of Apple's big competitors are putting pressure on the company and its stock:

Mind-Control Mobile Devices

Apple earned rave reviews less than two years ago when it launched Siri, a voice assistant that dials the iPhone, sends and reads text messages and surfs the web.

But arch-rival Samsung Electronics Co. Ltd. (OTC: SSNLF) wants to take the mobile world to a whole new level. As Samsung sees it, in the near future, you'll control your phone by using just your thoughts.

I'm not kidding or being metaphoric.

The South Korean electronics giant has teamed up with a professor at the University of Texas to develop a new wireless brain interface.

While it's still in the early stages, mind-control tech isn't commercial. It's in the R&D phase but showing promise in helping quadriplegics and amputees gain some control over their lives.

In a recent interview with MIT Technology Review, Samsung officials said they want to broaden the brain-device interface so that virtually anyone could use it.

Samsung is testing how people can use their thoughts to open an app, send a message, select a song from a playlist, or turn on or off one of its mobile products.

This futuristic approach has gotten the world's leading seller of smart phones a ton of global buzz. It's all part of its strategy to show that it's no longer an Apple copycat but is intent on setting new tech standards.

Then again, global battles like these mean everyone is scrambling for a sensory niche.

The Next-Gen Vision Thing

It would be easy to dismiss the new wearable computer from Google Inc. (Nasdaq: GOOG) as far more hype than substance.

No doubt, Google Glass has gotten plenty of buzz in advance of its sales launch. Company co-founders Larry Page and Sergey Brin have both worn the eyeglasses in public, generating a slew of media coverage.

Google Glass offers a ton of features that put the power of a smart phone inside a pair of eyeglasses. It takes photos and videos, sends and receives text messages, surfs the Web and displays maps.

Google Glass is an integral part of the firm's approach to next-gen tech. Google has an entire skunk works facility called Google X where senior technicians are working on a wide range of futuristic products like Google Glass.

The firm went so far as to hire renowned futurist Ray Kurzweil last December, who will head up machine learning.

Kurzweil is well known for his legendary work in speech recognition and is a proponent of Singularity, where technology and machines become one cohesive being- the technology compensates for the "flaws" in the biological human to create a superhuman.

It may sound a bit "out there" but we're heading there and it's good to have one of the globe's leaders of this vision working in your R&D lab.

To that end, Google is becoming a leader in robotic cars. These will be a godsend to an aging population that values autos as a key source of mobility and independence.

Google is lapping up the publicity as a company on the edge of tech's new frontier.

Talk to the Hand

What was just supposed to be a cool add-on for its popular Xbox 360 game console actually gave Microsoft Corp. (Nasdaq: MSFT) some much-needed technical respect for the first time in years.

Kinect went from fun idea to a viral open platform for innovation overnight. Imagine what Apple could have done with this unique motion-sensing system...

Microsoft leaders had no idea the impact Kinect would have on savvy technophiles. It began to get an idea shortly after the product launch in 2010 when hackers started writing dozens of new applications for Kinect.

It ranks as one of the fastest transitions from the sci-fi concept to market debut. Just eight years before in the movie Minority Report, computers had Kinect-like features that responded to voice and motion -- no remotes or keyboards needed. And now it's a reality children use at slumber parties.

To date, Microsoft has sold 24 million Kinect units, though it hasn't disclosed total profits. But Kinect is part of the high-margin entertainment unit.

Microsoft is now looking for ways to make money off the device as a stand-alone product. Last year, it recruited several young entrepreneurs to a special campus to write new apps.

A wide range of corporate customers --from surgeons to sports trainers -- have expressed interest in using Kinect to improve their operations. So, there is a big market to sell to.

But even if Microsoft fails to push Kinect much beyond gamers, it has set a new standard for professional and consumer electronics.

So Where's Apple?

Mind-control devices, vision-enabled devices, robotic cars, motion-controlled devices.

These are where some of the tech titans have set their sights.

And Apple? Apple TV? A new iPhone? Big promises beyond that are starting to sound like vaporware.

But a big vision is what Apple needs if it wants to convince investors it can once again join the vanguard of America's tech leaders.

I'm starting to wonder, though, if it has what it takes to stay at the head of the pack anymore.

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About the Author

Michael A. Robinson is a 36-year Silicon Valley veteran and one of the top tech and biotech financial analysts working today. That's because, as a consultant, senior adviser, and board member for Silicon Valley venture capital firms, Michael enjoys privileged access to pioneering CEOs, scientists, and high-profile players. And he brings this entire world of Silicon Valley "insiders" right to you...

  • He was one of five people involved in early meetings for the $160 billion "cloud" computing phenomenon.
  • He was there as Lee Iacocca and Roger Smith, the CEOs of Chrysler and GM, led the robotics revolution that saved the U.S. automotive industry.
  • As cyber-security was becoming a focus of national security, Michael was with Dave DeWalt, the CEO of McAfee, right before Intel acquired his company for $7.8 billion.

This all means the entire world is constantly seeking Michael's insight.

In addition to being a regular guest and panelist on CNBC and Fox Business, he is also a Pulitzer Prize-nominated writer and reporter. His first book Overdrawn: The Bailout of American Savings warned people about the coming financial collapse - years before the word "bailout" became a household word.

Silicon Valley defense publications vie for his analysis. He's worked for Defense Media Network and Signal Magazine, as well as The New York Times, American Enterprise, and The Wall Street Journal.

And even with decades of experience, Michael believes there has never been a moment in time quite like this.

Right now, medical breakthroughs that once took years to develop are moving at a record speed. And that means we are going to see highly lucrative biotech investment opportunities come in fast and furious.

To help you navigate the historic opportunity in biotech, Michael launched the Bio-Tech Profit Alliance.

His other publications include: Strategic Tech Investor, The Nova-X Report, Bio-Technology Profit Alliance and Nexus-9 Network.

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