March 24, 2011, 3:20 PM — The boom in mobile applications will fuel crazy growth for Apple over the next two years, while imperiling 'web-centric' companies like Google, according to Forrester Research founder George Colony.
(Also see: Google granted most trivial patent in history)
In an interview with Bloomberg, Colony predicted Apple will increase revenue by at least 50 percent annually over the next two years, thanks to ravenous consumer demand for mobile applications, which in turn will fuel demand for devices such as the iPhone and iPad. Apple's sales increased by 52 percent to $65.2 billion in its 2010 fiscal year, in large part due to the huge success of the iPad tablet, which debuted in April.
“They’ll be bigger than IBM next year, and they’ll be bigger than HP the year after that,” Colony said. At current growth rates “they’re going to be a $200 billion revenue company,” he said.
HP's revenue in fiscal year 2010 was $126 billion, while IBM's was $99.9 billion. Assuming both companies increase revenue, it'll be a challenge for Apple to surpass them in such a short time unless it tops 50 percent sales growth by a healthy margin, but Colony's point is well-taken.
The mobile apps revolution is spawning a huge opportunity not only for Apple and other device makers, but for companies that create and manage such applications (think Good Technology and Australia-based janusNET).
But Colony says the "app Internet" does not bode well for search giant Google, which he argues is based on an increasingly outmoded online advertising model.
“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.”
Nor does Colony think replacing outgoing CEO Eric Schmidt with Google co-founder Larry Page will help the search giant effectively transform its business model:
“When it comes to Larry Page I have two words for you,” Colony said. “Jerry Yang.”
Yang, of course, is the Yahoo co-founder who took over as chief executive in 2007 and was unable to turn around the Internet pioneer's sales slump during the recession. To be fair to Yang, Yahoo already was an unfocused mess by the time he became CEO, plus the recession killed online advertising across the board.
That being said, Yang's dithering blew a chance to sell Yahoo to Microsoft for far more than it's worth today, and he eventually was forced out two years ago when the company's board tapped former Autodesk CEO Carol Bartz to replace him. She certainly hasn't fared any better in growing revenue.
Colony's a pretty high-profile guy, so maybe his blunt comments will popularize a new term to describe someone who totally messes up an Internet firm, as in "He really Yanged that company."
Chris Nerney writes about the business side of technology market strategies and trends, legal issues, leadership changes, mergers, venture capital, IPOs and technology stocks. Follow him on Twitter @ChrisNerney.