Apple will face significant challenges in 2016

by Matt Klassen on December 8, 2015

apple-stock_largeAt first blush Apple has had an amazing 2015. Its iPhone line-up has once again dominated the smartphone market, its products flying off the shelves faster than its beleaguered supply line can make them, and its raking in the cash, expanding its ever growing pile of money. Not only that, but the company has clearly overcome the PR nightmare that was its inhumane supply line, effectively making us forget that the people who make our favourite phones live like virtual slaves.

So you might legitimately wonder how a company with the world’s single most popular smartphone and with billions of dollars of extra cash lying around (in what I can only imagine is some sort of giant Scrooge McDuck-esque money bin), could ever have significant challenges ahead, as the world-beater has, to date, taken on all comers and emerged victorious time and again.

But here’s the rub: Apple is currently a one-hit wonder, a company that could just as easily be known as The iPhone Company (as all it’s other side projects pale in comparison) and given that the iPhone will inexorably and unavoidably eventually hit a decline, Apple has some turbulent waters ahead as it tries to effectively manage this decline while simultaneously finding other growth markets that will continue to resonate with consumers for years to come.

Arguably now more than any other time in its storied history, Apple is almost totally reliant on one single product for its success. While the iPad made its mark initially, the tablet is in a steady decline, same for the practically defunct iPod line-up as well. As ZDNet’s  Adrian Kingsley-Hughes explains, while the iPhone is still clearly in the upswing of it’s growth wave, once that wave crests for any of its products the reality is that, “Apple [has] never managed to reverse the decline.”

So one of the biggest challenges Apple will face in 2016 is how to move beyond the iPhone, diversifying its portfolio with other equally as effective products. The stark reality is, however, that it currently has nothing. Not only has the iPad started its precipitous decline, but the Apple Watch seems little more than a novelty accessory, and the company’s adventurous plans to enter the automotive industry are likely little more than a pipedream, as entering an established market with heavy regulation is certainly not Apple’s strong suit.

Second, Apple will face the challenge of penetrating the enterprise market, a place where I will grant the company has a strong presence already, but where its products are viewed as vulnerable and unproductive, more business liabilities than business assets.

Third, one of the most significant challenges Apple will face in the next year will be to start better managing expectations across the board, including those of customers, analysts, and the media. For the most part Apple’s once extravagant and hype-filled announcements and now met with an apathetic shrug, as iterative updates and products tweaks are quickly losing their lustre (granted I’ve said that for the last several years).

All that to say, there’s no question that Apple is riding high on the success of its ninth generation of iPhone devices, but the ironclad reality is that this growth wave will crest, and evidence shows us that once it does, the product does not recover. If Apple is going to continue to grow and prosper it’s going to need to take 2016 to overcome these significant challenges, lest this next year serve as yet another beginning of the end for the Cupertino company.

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Written by: Matt Klassen. Follow by: RSS, Twitter, Facebook, or YouTube.

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