Perhaps surprisingly, I don't think the iPhone is really that important in the grand scheme of things. It looks fantastic. I want one. My oldResearch In Motion (RIMM - commentary -Trade Now) BlackBerry, by comparison, looks quaint.
Also, despite the hoopla, I don't think the recent email security breach on the AT&T (T -commentary - Trade Now) iPads or the threat of a government investigation -- because of impinging on poor little Google (GOOG - commentary -Trade Now) -- are going to hurt Apple's stock much either.
For me, there are four real takeaways from the various talks that are huge positives for Apple's stock if they prove to be correct.
- The world is moving to smaller mobile devices to access the Internet at the expense of the PC.
Jobs made a point in his D8 interview of comparing the PCs to the way we only used to buy trucks when we lived in a primarily agrarian society. Then, cars came along. And suddenly, we needed to own cars, and very few of us, especially in cities, bought trucks anymore. Jobs says that's what's going to happen with PCs as we move toward mobile devices (such as the iPhone and iPad). The future growth, he believes, will come from these smaller, more portable devices -- at the expense of future growth of iMacs.
It was interesting to hear Steve Ballmer of Microsoft (MSFT - commentary - Trade Now) rebut this later at the same conference by saying tablet computer is just a different form factor of a PC, so PC sales will continue to grow. I believe Jobs would argue that there are differences, which is why Apple had to write a new operating system for the iPad to make it work for that smaller device. However, the point is that people want more of these smaller devices to get access to the Web. And that's critical to this next point.
- This secular shift will hurt Google and benefit Apple.
Jobs also declared in his D8 talk that, on the basis of what the company has seen from iPhone usage data to date, people interact with their smaller mobile devices differently from they do so with their PCs. The most significant difference, he claims, is that iPhone users don't go off to do a special Google search in the same volume they do searches on PCs. Instead, they spend the bulk of their time in applications on the iPhone. They might do a search in an app (such as Yelp, searching for a local store), as opposed to stopping their app usage to go to Google. So if Jobs is right, this is a major threat to Google's long-term cash-cow business in Web-based AdWords clicks. It might also explain why Google is moving so quickly to compete with Apple in the mobile world with its Android offering.
- Apple is rethinking how ads will work in this new mobile device-centric world, and Google will be forced to rethink its cash-cow model and adapt.
Apple is rethinking how to allow advertisers to best interact with users who are on a mobile device. Their new iAds are more graphic-rich than a typical Google ad. Also, Apple has embedded the ads within the apps. Therefore, when you see an ad that you want to interact with, you click on it within the app. The app pauses while you explore the ad, and when you are done, you get to return to exactly where you paused your app.
In effect, Apple is rethinking how consumers want to interact with ads. Apple is betting that you don't want to be ripped out of your app and taken off to a separate browser page that has to open to render an app created for viewing on a PC. If this new format catches on, could Google adapt the same kind of approach to compete? Sure, but Google's greatest challenge will be turning its back on the approach that has made Google Google and rethink its approach from scratch. History says that's very difficult for successful companies to do.
- The future is all about the apps.
If you take away nothing else from the Jobs' presentations, remember that over 200,000 apps exist today for iPhone that weren't around two years ago. Now, thousands of apps will be written for iPad to optimize that device's form factor. If you give people the choice between a slick application and a poor one that is being repurposed, they will choose the richer one every time. If that's true, Apple has a leg up on Google and Facebook. We will see if it can keep it.At the time of publication, Eric Jackson held long positions in AAPL, GOOG and MSFT.