Apple will rule home entertainment

The next five years are going to be very interesting for Apple if a new report from market research firm Forrester is correct. The company predicts that Apple will rule the digital home by 2013.

Using Apple’s history over the past eight years when the company remade itself from a computer maker to a leader in consumer devices and the digital music market, Forrester said the precedent has been set for radical change over the next five years.

Forrester analysts J.P. Gownder and James McQuivey predict that Apple will offer eight key products and services to connect PCs and digital content to the TV-stereo infrastructure in consumers’ homes. The strategy will include launching new products and re-engineering some existing services.

For instance, the report says that Apple will re-engineer the Apple Store and expand into in-home installation services to deliver a fully integrated digital experience. The analysts also expect Apple to release a home server that won’t contain the word “server” and release a remote that controls music from all of a users devices, including iPods, home stereo and computers.

Networked enabled digital frames and clock radios that stream images and tunes from the aforementioned server are also on the list. Finally, Forrester expects Apple TV to move to Apple HDTV.

What Apple won’t be. Now that we know what the analysts believe Apple will be in five years, the question becomes, what won’t Apple be in five years.

Well, Forrester says Apple won’t become a pure media company, meaning that it won’t make its own content. Apple will also not become a consumer electronics giant, nor will it become an enterprise IT firm.

As good as Apple is at making software, the report says Apple will not be a software-only company. But that doesn’t mean it will become only a hardware company either, because according to the report, it won’t.

Power in its products. The report notes that Apple exerts disproportionate thought leadership in computing, given its penetration of the consumer market. The company has managed to do the same thing in the MP3 player market with the release of the iPod and subsequent updates that keep it out of reach of the competition.

The success of the iTunes Store in selling music and video has propelled it to becoming the number one music retailer in the US. And then there is the iPhone — perhaps one of the most popular products the company has on the market today.

Including all of Apple’s products and Pixar movies, Forrester estimates that approximately 40 percent of the US population has consumed one of the company's products. [Editor's note: aside from the coincidence of sharing Steve Jobs, there is no corporate tie between Apple and Pixar, so this point is a bit of an odd one. — M.JC.P.]

Whether Forrester's predictions come true or not, it will definitely be fun to watch Apple over the next few years.