Apple sales set to slump in 2016 with no new products, analysts warn
AFTER a year of big Apple releases, analysts are predicting a flat 2016 where the world’s biggest tech company refines product lines rather than produces the next big thing.
Apple’s share price has taken a battering in the past six months, with more than $220 billion slashed from the company’s value as analysts look towards an era of smartphone saturation.
Morgan Stanley analyst Katy Huberty recently predicted that 2016 would be first time that iPhone sales would shrink, dropping by up to three per cent.
Given the iPhone 6S and 6S Plus sold 13 million in their opening weekend, a jump from the 10 million sales for the iPhone 6 and 6 Plus the previous year, a decline of that scale would be a massive turnaround. However the Morgan Stanley grim forecast was matched by other analysts, including Pacific Crest and KGI Securities.
Jan Dawson, chief analyst at Jack Daw Research, was more positive about the iPhone’s future predicting that Apple would continue to grow sales but was pessimistic about the iPad, with the tablet market for all companies struggling as people fail to see compelling reasons to upgrade from their first tablet.
The problem for the year ahead for Apple was that in 2015 it was on the crest of a wave.
After years of rumours it launched its first wearable product, the Apple Watch, leapfrogging Samsung, Sony and others to become the dominant player.
IDC estimates that Apple will ship 21.3 million smartwatches this year. An analysis of the Apple figures suggests the Apple watch added US$1.7 billion to the coffers in just six months.
Apple also this year released a revamped Apple TV, a 12-inch iPad Pro aimed at those wanting greater productivity from a tablet, and Apple Music, which after a few months has 8 million subscribers which will grow, music business analyst Mark Mulligan predicts, to 20 million by the end of next year.
And there was the iPhone 6S, which kept a near-identical form factor to its predecessor but added a couple of features in the form of Live Photos (embedded three-seconds of video in every still image) and 3D Touch which adds an extra element to screen navigation by responding to the force of a heavier touch.
But new products don’t come along that often, particularly for the Cupertino-company which doesn’t follow the scattergun approach of its rivals including Samsung which releases a swag of smartphones, tablets and wearables each year. The Apple Watch, released in April, was the first truly new Apple product since the launch of the iPad in 2010.
One prediction you can make about Apple is that someone, somewhere will claim that Apple is running out of ideas.
Tech publication ZDNet ran the lack of ideas headline in 2012 after the release of the iPhone 4S, Forbes ran the same headline in 2013 after the iPhone 5S and last year Quentin Fottrell in Market Watch ran the claim after the release of the iPhone 6.
Argus Insights CEO and Founder John Feland predicts Apple will direct its attentions to the homes we live in rather than just the products we use.
“Apple’s classic innovation mode for the past decade has been to enter markets others have already made a lot of mistakes, learn from those mistakes and release a new experience that disrupts everyones thinking and finally delivers on the promise of that market,” he said.
“This method failed for the Apple Watch (though over 10 million units this year is hardly a failure), in that nothing about the Apple Watch really delivered an experience above and beyond what Android Wear was already enabling consumers.
“That being said, a market that is ripe for Apple’s intervention is the smart home.
“If Apple does anything radical next year, it will be to deliver the Smart Home experience everyone else has been promising but failed to deliver.”
Ten predictions of what Apple will deliver in 2016
You should not expect Apple to release new product lines next year, but you should still expect a
lot from Apple.
1. Apple Watch: The widely circulated rumour is that there will be an event in March to update the Watch although it might come later. Likely improvements are extra health sensors, better battery life and improved features for when it is not paired to a phone. 9To5Mac, which has a great record of Apple predictions, says the new Apple Watch will have a FaceTime camera so you can make video calls on your wrist.
2. The iPhone 7 (4.7-inch display) and 7 Plus (5.5-inch) will come out in September and is set to be the biggest selling iPhones ever. It will have a major revamp in features which could include dropping the home button and even dropping the earphone jack to ensure a slimmer form factor — although that’s a change that would be likely to anger as many people as it impressed.
3. Apple TV came out in the last part of 2015 but momentum will mean the app store will grow significantly in the next few months, boosting its dual roles both as a media hub and a games console. There could be some news too on the Apple TV streaming service.
4. A new iPad is definitely on the cards. Rather than release an iPad Air 3 this year, or whatever they will call it, Apple instead released the 12-inch iPad Pro. The Air 2 will be getting long in the tooth by the end of next year and Apple may bring the tablet release date ahead from the traditional October period. Whenever it comes, the extra development time could mean more features apart from the traditional “faster chip, thinner form” improvements that have been the way with recent iPad upgrades.
5. While the iPhone 6 “phablet” was a hit for Apple, there are still plenty of people who bemoan the lack of a recent 4-inch iPhone. There are plenty of rumours that an iPhone 6C, or it will perhaps be called the 7C, is coming as early as April. If it does, it is unlikely to match the bigger iPhones in specs although it’s just as unlikely to be a truly “cheap” iPhone. Smaller and cheaper, not small and cheap.
6. There will be updates to the Apple Mac range, perhaps by adding new MacBook Air computers or a follow-up to the ultraportable MacBook which started the frustratingly slow transformation to the USB-C all-in-one port.
7. New software is coming to a device near you. Last year the mobile iOS operating system went “flat” with a new modern look, this year it got new features including better power efficiency. Next year will bring who knows what — what we do know is that it is coming and we can expect to hear more at the WWDC conference in June.
8. You can expect the emphasis on smart phone photography to continue. Apple launched the Shot on iPhone 6 campaign last year to highlight how ordinary people can take terrific photos with their phone. The recent US 60 Minutes report on Apple showed that a team of 800 people are working on improving the iPhone camera.
9. Apple Pay has arrived to Australia but just in limited form, being available to those Australians who have an American Express card not issued by their bank. By this time next year, you can expect to pay for your Christmas shopping with a flick of the iPhone or a flash of your Apple Watch regardless of who you bank with.
10. The Apple Car is coming in 2016 _ it just won’t arrive in 2016. If Apple is working on a car as the rumours suggest, it will be some time before those rumours turn into reality.