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Firm sees apps driving 50% sales growth for Apple through 2012

The founder of a prominent market research firm said Wednesday that he expects Apple to continue to post more than 50 percent sales growth over the next two years as burgeoning demand for mobile applications drives sales of Apple's mobile devices.

George Colony, founder and CEO of Forrester Research, made the predictions in an interview with Bloomberg.

Projecting Apple's current growth rates for the next few years, Colony sees the Cupertino, Calif., company's revenue surpassing that of other well-established tech giants. "They’ll be bigger than IBM next year, and they’ll be bigger than HP the year after that,” Colony said. Assuming that current growth rates continue, "they’re going to be a $200 billion revenue company,” he said.

When measured in terms of market capitalization, Apple became the world's largest technology company last year when it passed rival Microsoft. Shares of Apple have continued to climb since then, with the company's market cap topping $300 billion at the start of 2011.

Though Apple stock fell $2.01 to $339.19 on Wednesday, the company is up 5.2 percent since the beginning of the year.

Analyst consensus estimates also see Apple growing sales by over 50 percent to more than $100 billion in fiscal 2011, which ends in September, but some analysts see the company's growth slowing to around 18 percent in 2012.

Colony sees Apple's growth being driven by what he calls an "app Internet," where consumers and businesses rely on app for content and services, rather than the Web.

However, Colony's bullish outlook is tempered by concerns over Apple CEO Steve Jobs' health. Though he surmised that the company has a product pipeline set up for the next three to four years, an unexpected departure from the company by Jobs would affect Apple's product line and stock price.

“Remember, every two years they have to fill that store with new stuff,” Colony said, referring to Apple Retail Stores. “Without Steve Jobs as the CEO, I think it will be much harder for them to do that. That would be a massive, massive hit to the valuation.”

Jobs is currently on medical leave, though he remains involved in major strategic decisions.

During the interviw, Colony warned that Apple rival Google, which he claims relies too heavily on the Web, could struggle as consumers gravitate toward apps. “If you’re too Web-centric right now, you’re in trouble,” he said. “Google’s business model is completely based on you going to the Web and clicking on a link and seeing an ad impression. In the app Internet world, all of that goes away.”

The executive also cautioned that Google may face troubled times when co-founder Larry Page takes over for Eric Schmidt as CEO next month. “When it comes to Larry Page I have two words for you,” Colony said. “Jerry Yang."

Yang, who co-founded Yahoo, became CEO of his company in 2007, but was unable to turn the company around. He eventually stepped down in 2009 after critics blamed him for mishandling negotiations of a takeover by Microsoft.



21 Comments

shaun, uk 19 Years · 1050 comments

From near bankruptcy to biggest company in the world in 15 years. Truly amazing.

lkrupp 20 Years · 10521 comments

How could some market research firm have any clue about where things are headed? Since their beginnings Apple and Jobs have always been on the frontier heading toward the next mountain range with the settlers and city slickers following far behind. These researchers and analysts should try to sit down with Jobs and just ask him where he and Apple are headed next. Then they would have the real answer to their research.

SpamSandwich 20 Years · 32917 comments

Marketing people have always been full of it.

markb 18 Years · 153 comments

ROFLMAO!!!

Quote:
These researchers and analysts should try to sit down with Jobs and just ask him where he and Apple are headed next. Then they would have the real answer to their research.

I assume what they would get out of such an interview is that Apple is headed nowhere, because its not like Apple would tell them about upcoming products. "Oh because you asked nice, let me tell you about the iPhone 5 and our corporate strategy for the next five years".

While I agree that most market researchers have very little insight into the future, nominally that is what they are supposed to work on. IMO most research firms of that nature are trying to manipulate the future more than predict it. I guess that is a form of prediction?

bravo six 14 Years · 1 comment

Analysts: Is he like the one who, in 1984, discouraged me from being excited about the Mac and Apple's long-term prospects, and counseled me against buying Apple stock. This guy may turn out be correct, but he's actually no more credible to me than if he were basing his prognostications on examinations of chicken entrails. Spare me his wisdom and that of his ilk, puleese!