Inside Apple's tumultuous year

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Inside Apple's tumultuous year

While standing still is never tolerated in the tech industry, 2016 was a year of particular change for Apple.

The iPhone and iPad are no longer growth engines, and while the Cupertino-based company remains huge (and hugely profitable), it has seen its fiscal-year revenue drop for the first time in 15 years.

The shifting sands have had big implications for Apple channel partners as the company has sought to push harder into the enterprise, in part to help compensate for the lack of growth with consumers. 

1. Revenue in decline

In October, Apple reported an annual revenue decline for the first time in the iPhone era. Fiscal 2016 revenue (for the 12 months ended 24 September) came in at US$215.6 billion, a drop of 7.7 percent on a year-over-year basis.

Falling sales in all of Apple's major categories – iPhone, iPad and Mac – were responsible for the decline

Mac sales dropped 10.3 percent year-over-year, and channel partners have told CRN USA they believe that's not just because PC sales are down on the whole but also because Apple has been slow to refresh its laptop and desktop models.

2. Elimination of products

While Apple hasn't been loud about it, the company has been selectively cutting back on where it puts its energies. In June, the company discontinued its last monitor, the high-end Thunderbolt Display, after producing a number of stand-alone displays over the years.

And in November, Apple reportedly pulled the plug on development of its AirPort wireless routers Apple had helped to pioneer 802.11b for consumers with its initial AirPort offerings.

3. New products

Along with iPhone 7 and MacBook Pro, where else was Apple putting its product development energies in 2016?

Apple's September iPhone event saw the introduction of one brand-new product, AirPods, along with a refresh of the Apple Watch. The AirPods – wireless earbuds paired with a voice control microphone – aim to reinvent the Bluetooth headset, but shipping is currently more than a month behind schedule.

The new version of Apple Watch, dubbed Series 2, includes built-in GPS and improved water resistance (it's now "swim-proof"). The wearable also features boosts to CPU (up to 50 percent faster) and display (2X brighter).

4. New type of iPhone hack

In August, Apple said it "immediately fixed" a new breed of security vulnerability in iOS after security researchers contacted the tech giant about the issue.

The cyberattack involved a text message with a link that, if clicked, would have given hackers access to an iPhone's camera and microphone for snooping purposes, according to Citizen Lab, the security research group that investigated the hack.

5. iPad Pro catches on with businesses

While iPad sales dropped for Apple in fiscal 2016, one bright spot has been the adoption of the iPad Pro for business use. In the company's fiscal third quarter, for instance, revenue for the iPad line rose on a year-over-year basis.

That growth was driven by sales of the 9.7-inch iPad Pro, which was released in March, Apple chief executive Tim Cook said. Cook also disclosed Apple survey results showing that half of iPad Pro purchases have been for work use.

6. Australian channel problems

The past 12 months saw a rash of problems for independent Apple resellers. 

The biggest Apple reseller to collapse in 2016 was Dick Smith. Dick Smith was a major Apple partner, having previously acquired Apple specialist Mac1 in 2014 for one dollar.

It came after the December move by major partner Vita Group to kill off Next Byte, which had been a drag on profitability.

Meanwhile, Melbourne reseller MyMac faced its own set of problems. MyMac’s managing director Steve Bardel took the directors of its owner, Broad Investments, to court over alleged multiple breaches of the corporations act. In October, Bardel bought the company back.

7. iPhone 7

Apple released a mostly incremental update to the iPhone 7 and iPhone 7 Plus in September, with the company widely expected to be preparing a bigger refresh for 2017.

The brand-new A10 Fusion chip for the iPhones was among the impressive points – the processor aids both horsepower and battery life, with two cores for high performance and two cores for power efficiency.

The dual-camera setup on the iPhone 7 Plus was another high point, with far better optical zoom and digital zoom now available. Notably absent from the new iPhones: the 3.5mm headphone jack.

8. Competition for creatives

Apple PCs have long been go-to for graphic designers, architects, audio and video professionals and other creatives – but two things happened in 2016.

One, Apple continued to hold off on refreshing computers such as the iMac and Mac Pro, which have been popular with design and creative professionals.

And two, Microsoft launched an offensive for such professionals with the debut of the Surface Studio, a touch screen all-in-one PC with a huge, adjustable display.

The developments – also fueled by disappointment by some creatives about the MacBook Pro specs – have prompted discussion about whether or not Apple may soon be ceding some of its ground with creative professionals.

9. New MacBook Pro

In October, Apple unveiled the biggest overhaul to its workhorse MacBook Pro laptop since 2012. The centerpiece innovation of the new version, the Touch Bar, is a touch-sensitive display strip that provides controls that adapt to whatever app is being used.

The laptop also received specs upgrades, including an updated processor and thinner/lighter body.

Some decisions with the new MacBook Pro have received a large helping of criticism, however – including on the ports (USB-C only) and pricing (well above previous generations).

10. The enterprise push ramps up

Apple's bid to get more of its products into the enterprise world remained a focus for the company in 2016.

Two years into Apple's partnership with IBM, some major results are accruing: IBM said it's providing 1300 Macs to employees a week and expects to cross a total of 100,000 Macs in its organisation by the end of the year. Apple also got cozier with Cisco, by announcing iOS 10 features optimised for use with Cisco networking software and hardware.

Meanwhile, Apple announced a new partnership with SAP – to develop native iPhone and iPad iOS apps for critical business operations – and with channel heavy-hitter Deloitte.

The latter will result in Deloitte launching a new Apple practice consisting of more than 5000 strategic advisers, aimed at expanding the use of iPhones and iPads within the business world. 

Copyright © 2016 The Channel Company, LLC. All rights reserved.
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