Three huge challenges facing Apple in 2016

Wondering how a company with a wildly successful product such as the iPhone in its lineup, along with billions of dollars stashed away in the back can have challenges? Well, lean in while I explain.
Written by Adrian Kingsley-Hughes, Senior Contributing Editor

On the face of it 2015 has been a phenomenal year for Apple. Money is pouring in, products are flying out the doors of its stores, and customer satisfaction ratings are holding strong.

Apple also faced up to, and dealt with, some of the challenges that it was facing at the end of 2014 . It seems to have solved some of the supply chain issues that were evident back when the iPhone 6 was released, it's not a lot easier and less painful to update iOS, and more people are buying Macs than ever.

This might leave you wondering how a company with a wildly successful product such as the iPhone in its lineup, along with billions of dollars stashed away in the back can have challenges. Well, lean in close while I explain.

Here are three big challenges facing Apple in 2016.

Growing beyond the iPhone

Apple is now more accurately "The iPhone corporation," with the company being more reliant on this single product than ever.

Back in 2012 the percentage of revenue derived from the iPhone stood at 46 percent. In 2015 this grew to almost 63 percent.

On top of that, Apple missed Wall Street's projections for the last quarter, something that Apple rarely does.

The iPhone is selling extraordinarily well, but much of this is down to Apple opening up new markets, specifically China. Once everyone who wants an iPhone has one, sales will cool, and as history tells us, products go through a lifecycle of birth, growth, and decline. Apple's already been through this with at least two products.

Here are quarterly sales figures, first for the iPod:


And these are for the iPad.


Birth, growth, and decline.

The iPhone appears to still be in the growth phase, but as the above charts show, once a product starts to decline, Apple's never managed to reverse the decline. And you might not have realized it, but the iPhone 6S is a ninth-generation product.


And Apple is currently a one-trick pony. It has nothing in its current lineup to replace the iPhone. The iPad already appears to have entered a decline, and the Apple watch is little more than an accessory.

And if you think the mythical Apple Car could be the next big thing, think again. The car industry is hugely competitive, and a minefield of governmental regulation. Apple would be better dusting off those TV plans.

Improve software quality

2015 has seen Apple release some of its buggiest updates to date. iOS 9 took devices that had previously "just worked" and made them hair-tearingly frustrating to use (iOS 9.1 did improve things dramatically), while OS X 10.11 El Capitan has been plagued by so many show-stopping bugs that I'm waiting until the 10.11.2 release before rolling it out onto my workhorse devices.

I'm not sure what's behind the decline. Apple had a public beta for both, but public beta programs now have more to do with marketing and promotion than they do about finding and fixing bugs. Also, iOS and OS X are both on a tight release schedule where there's not much wriggle room for delays.

But buggy software is still buggy software, and it sucks for consumers who have paid top dollar for products to be encumbered with so many issues. It makes Apple appear slapdash and lackadaisical, especially since it has such a tight control over the hardware.

Managing analyst/media/consumer expectations

Apple is a super-secret company, and this information vacuum is just begging to be filled with nonsense. And the crazy levels of speculation, hype, hysteria, and plain old fabrication that precedes the launch of new Apple products is dulling the effect of the actual launch.

Even I'm feeling this, and I'm highly skeptical of about 95 percent of the nonsense I come across prior to a new Apple product upgrade. There's that point during a launch event where I'm struck by that feeling of "oh, it's only a smartphone/tablet/computer/smartwatch" and I'm a tad disappointed that it doesn't cure a disease or act as a teleport device.

The way that some analysts are getting caught up in pre-release hype should be of particular concern to Apple. That pattern of huge buildup followed by disappointment once a product is actually unveiled it's doing Apple any good.

See also:

2015: Must-have iPhone accessories

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