Apple's 2016 Report Card

By Michael Gartenberg
last updated

The new year is here for us and for Apple. Let's take a look at where the company's strengths, weaknesses, and potential threats lie.

Strengths

The Apple Brand

There are few, if any, brands that carry the cachet of Apple's. The excitement that builds around every new product release makes other vendors weep. Apple's retail team is led by the same person who restored the Burberry brand from shlock to premium cachet. Apple's retail team is doing an amazing job to make sure Apple's brand never falters.

Apple Marketing

It sounds silly but one of the things that differentiates Apple is marketing. The marketing teams ability to create, hone, and communicate a clear message around products and strategies carries over to press, analysts, and of course, users.

Innovation

Don't laugh just yet. Sure, 2016 might not have been perceived as the most innovative Apple year. That perception is wrong. Much depends on how you define "innovation". One of Apple's core skills has always been taking the commodity and making it special. The iPod was just a refined MP3 player. It also changed the course of music forever. We've seen that spirit alive and well this past year. AirPods, for example, are hardly the first wireless earbuds. They probably aren't even the best sounding. What they do is, through a powerful set of individual technologies, make the whole something special. From the magic of pairing them with an Apple device to the elegant carrying case to the simplicity of use, AirPods redefine that category. Innovation isn't always measured in feeds, speeds, or even UI. Sometimes innovation is just about the continued ability to surprise and delight.

Weaknesses

Services

Services remain average to poor. Music has finally come into its own, but while perhaps matching competitors such as Spotify, it's hardly the leader in the market. Apple forums are filled with users, frustrated with issues related to synchronization across devices, often due to poor design choices. iWork lags behind competing services (especially for working across platforms). Cloud storage and synchronization have been usurped by services such as Dropbox, and Gmail is the de facto mail service for millions. While Apple execs have promised a greater emphasis on services (and service revenue), it's hard to see any Apple service that is best of breed. At the high end, pro applications have been recently panned as dumbed down (or in some cases just abandoned). Apple's decisions on services architectures, direction, and pricing all need review.

Opportunities

Education

Apple has some great opportunities to make some strong inroads with the education market. New updates to iOS make iPad even more attractive to teachers. New tools for teaching principles of coding, creating interactive content, and an app ecosystem that's unparalleled are all tools Apple has at its disposal to recapture the mantle of "education brand".

Television

Nope, Apple hasn't cracked it yet. The good news is that neither has anyone else. 2017 is a great year for Apple to break away from the pack and take a pole position in the living room. No vendor will cede this market to Apple, but Apple has the space to advance its platforms to take a market lead.

Threats

Google

It's a no-brainer. Google is a huge threat to Apple's well-being. Google services are rapidly becoming de facto services for consumers, well beyond search. Google's ability to deliver Google services to iOS that are as good as, if not better than what's available on Android should be a huge concern. At the moment, Google could well be on track to co-opt many key services on iOS. It's only iOS lockdown of default service actions for things such as mail, maps, and browsing that's keeping Google at bay.

Google's own Pixel devices have received glowing reviews; in some cases the Pixel camera touted as superior to iPhone. Google's value add of free, unlimited, full resolution photo backup and storage is a perfect example of Google doing an end run around a place Apple should own. Google Music offers free upload and access of user libraries across multiple platforms. Apple charges $24.99 a year for the same service. Expect to see Google keep up the pressure throughout 2017 with new products such as Google Home and new WiFi devices (at a time when Apple is leaving that market).

Microsoft

This is not Microsoft from days of yore. A revitalized Microsoft brought new innovations in the form of HoloLens, a premiere VRg platform for the living room, and an updated Windows that's optimized for both PC and tablet form factors. New Surface Books offer more "pro" specs than the latest MacBooks. Surface Studio, while a premium product, demonstrated an ability to capture mindshare and aspiration. Apple ignoring Microsoft in 2017 would be a huge mistake.

Bottom line

2017 will be a pivotal year for Apple. Expectations are high for the next generation of iPhone, iPad, and Watch. Apple must convince the market that Mac is not just a hobby but a core part of the business, if not in revenue, then in resource allocation. The overall state of the Apple ecosystem remains strong, but as a chain is only as strong as its weakest link, Apple's ecosystem is only as strong as it's weakest product or service.

Michael Gartenberg
Michael Gartenberg

I’ve covered the personal technology beat for more than two decades at places like Gartner, Jupiter Research and Altimeter Group. I’ve also had the fun of contributing my $.02 on the topic at Computerworld, Engadget, Macworld, SlashGear and now iMore. Most recently I spent a few years at Apple as Sr. Director of Worldwide Product Marketing. On Twitter I’m an unverified @gartenberg. I still own some Apple stock.

26 Comments
  • Judging by the amount of devices integrating Amazon's Alexa (including Android phones), that is another threat worth mentioning.
  • You hit it right on the head. Amazon is to the smart assistant what Apple was to iPhone. Alexa is early enough to the market that popular services and devices like Sonos are going to start supporting it. It's clear Google Home is not living up to that standard and Apple hasn't even entered the competition.
  • Regarding the comments under Television (e.g., no one else has cracked it yet), it looks like AT&T's DirectTVNow app is on its way of cracking this market. $35 a month give you access to more than 100 cable channels, as long as one has a good Internet connection.
  • Really why don't you fact check this first! The strongest IPTV and greatest reach is Roku.
    https://www.comscore.com/Insights/Blog/Roku-Leads-OTT-Streaming-Devices-...
    With Roku being nearly 49% of the IPTV market and Apple only being 12% it has long been cracked oh and DirectTV so called $35 is only entry cost before equipment cost , in reality its still around $150 a month. Any Google search and reading the contract terms will tell you that!
    Look my guess is by your statement your a rep from ATT and Direct TV and here just to spread false information to hide the fact that so many of your own users are ditching your Dish or cutting your uverse cord in favor of Roku, Amazon, Google, and Apple.
  • Firstly, I have no affiliation with AT&T, DirectTV, or Apple for that matter. And frankly, I don't see how the Roky compares to the DirectTVNow service. There are no other equipment costs with DirectTVNow, other than a device that supports their app--I have no idea where you come up with $150 in monthly charges. Actually, the $35 monthly fee is an introductory offer and the fee will jump to $60 I believe, but those who sign under the intro offer will continue paying $35 a month.
  • Sighs ...smh well glad you don't work for them then but you are grossly misinformed...read this and get some enlightenment!
    http://www.consumerreports.org/tv-services/directv-now-streaming-service...
    Plus look at the Business model their on the DTV package its 100 chaneels out of those 100 only 6-10 of them will you like to watch the rest you may not plus no local programing. Where On Roku you have 1000's of channels most of them free ( which you choose what you want to watch), plus local programing like your local news. and it works on your Wifi where the DirectTV Now looks like it works off of your cellar data. BTW for it to work with your TV you would need a set top box that uses your cell data that and the use of cell data will be your additional cost. Since its from ATT/Direct TV they are notorious for hidden fees and charges! If you did some more research you would no this!
  • Again, you're comparing Apples to Oranges... If you don't like the channel selection, no one is forcing you to sign up. I don't care for most of the "free" channels you get on the Roku, but that's my preference. If you like the Roku stick with it--I prefer the AppleTV, personally. Complaining that DirectTVNow may not give you local programming is odd--do you get free local programming on your Roku? I see the DirectTVNow service as a cord-cutting alternative to cable or satellite, at a much lower monthly cost. The DirectTVNow service in no way compares to the Roku device, just like Netflix, Hulu, etc. don't compare to the Roku.
  • SMH... I have several Roku devices along with an Apple TV (and a Firestick) and by far prefer the Roku devices.  I have the DirectTV Now service also and it is HORRIBLE on the Apple TV (there is no Roku app until 2nd quarter of this year).  The DirectTV Now service sucks on every platform and has users up in arms because it does nothing but lock up and give Error Code QP1502. It's simply crap.  I've had it since launch and got the free Apple TV with it for prepaying 3 months. It's been an absolutely horrible service with freezing of the application and getting  every 3 - 5 minutes when watching.  It's not just me and not just on the Apple TV - it's also when streaming using a browser or any other service.  You can see all of the complaints on their feedback threads: https://forums.att.com/t5/Streaming-Troubleshooting/Directv-Now-constant... That being said - Roku has 35% of the streaming market with good quality devices.  The Apple TV is ok, but the remote is horrible.  I like the hardware and the picture quality is very good (same as the Roku 4).  Roku's definitely the leader in the streaming market (Google the market shares) and Apple will have a long way to go to get a leg up an anyone.
  • Not my experience. It streams without hiccups, although I haven't used it for a long time, admittedly. I wonder if those reporting issues, are due to ISP related problems. By the way, I read somewhere that one reason Apple hasn't released a TV streaming service, is because of concerns over uneven levels of service offered by different ISPs.
    As to the AppleTV (4th Gen) remote, I think it's the best remote ever. I have a Samsung SmartTV and avoid using it to stream content, because their remote is really poor.
  • Huh? DirecTV will work on cellular or your home wifi. Why do you think it only works on cellular only? That makes no sense o_O
  • I'm not sure who you're replying to but if it's me, I never said that DirecTV Now only works on cellular only...
  • I had a trail of Directv Now and it was a mess. I couldn't go 1 minute or (if I as lucky) 5 minutes without it buffering or freezing on my iPhone 7plus, iPad Air 2 and 4th gen Apple TV hooked up via Ethernet. I went over to PlayStation Vue and it was stable and very rarely buffered. But I think if Apple launches a tv streaming service, both Sling and Directv Now will be on the losing side of things.
  • That's not my experience. I get a good and steady stream--I'm streaming it now on iPhone 7 as I type this, while connected to WiFi. On 4G some of the frames freeze up, at times, but the audio keeps on playing, which is OK for news programs. I've read of others reporting what you're saying, but that's not a universal experience and may have something to do with your ISP. I also understand that they've had updates to their apps that corrected some of the earlier problems users experiences.
    As to Apple launching a TV streaming service, we've all been waiting for that for years now. The latest launch of the TV app for the AppleTV is as lame as it gets. They said that you only have to login to your cable provider once--well, they didn't say that they only support about half-a-dozen cable providers only. The rest, you have to sign up manually for each app that's downloaded to the TV app.
  • we talking about stupid TV channels? just forget about these tv services... apple need to focus in good hardware. the little bit money they make on that is just a good tip on the side. HARDWARE sales makes the money. iPAD iOS is just not good enough.
  • Services aren’t the only things which need work. I’m actually more interested in Mac hardware. What I want are upgradability and Nvidia GPUs, and I’m not alone.
  • Get real Bubb if you want upgradability you have to look at the MacPro since all the rest of the Macs are build to order. As for Nvidia support well that's an issue on 2 fronts one Nvidia has to offer Apple with better quality. Second Apple has to actually have better Software support. Now both of these issues actually focus on a bigger issue with Apple that has existed since Mr Cook took over and that is simply Quality Control. Something Apple hasn't had for a while. Poor quality control on their software led to hardware conflicts. Look Bottom line Apple use to be about what just worked. Now its motto is it will work after this update....maybe!
  • Wrong Bubb---until fairly recently you could upgrade other Macs (ie. memory, ssd's etc) Sorry Bubb.
  • Innovation? XD Posted from my Nexus 6P
  • Android trolls? XD
  • Don't confuse innovation with novelty. A lot of companies are good at churning out novelty after novelty to see what sticks, like 3D cameras or modular attachments, few are good at innovations that have a lasting impact, like having highly optimized hardware and software or keeping previous model years available at discounted prices. Apple doesn't do much of the former but does plenty of the latter.
  • Imore is merely an advertising arm of Imore, masquerading as objective technological journalism. What a waste of screen space.
  • went to the mall on wednesday. walked by the microsoft store and as usually... CRICKETS!! always more employees in there than clients! actually there were no clients in there at all. kinda typical. so then i went into the apple store to check out the new MacBook pros. the store was packed as usual. people waiting in line to get checked in. (no genius bar setup seems a little odd) people sitting around. i stayed for about 20 minutes. what i noticed was no one was buying anything! they were all waiting for service i guess. i can honestly say out of maybe 75 folks there were maybe 5 of us who were looking at product. so... my question is... whats going on at apple stores? i remember when it used to be a really cheerful place to hang out. maybe i caught them at a bad time but all the faces i saw weren't looking so bright and cheerful! perhaps it was the 'after holiday malaise' but folks were looking like they really didn't want to be there! (the star is a minimalists dream, though! I've always like that! but no genius bar will take a moment for me) gotta forego my 401k to buy a new MacBook pro!
  • Good article Michael, but one of the weaknesses that I think you missed was supply chain management, or lack thereof. It seems like Apple has been missing deadlines and has had many issues with being able to deliver products timely with the proper amount of supply; i.e. AirPods, Pencil, Smart Keyboard etc. I understand demand will outstrip supply when products are launched, but Apple seems so out of touch with this demand level it is concerning. If people were anticipating the AirPods in October and can't get them until February, they may decide to look at Bose or other alternatives. Apple routinely mentions issues with supply chain not being able to make enough products, but I feel like that is a poor excuse for supply chain mismanagement.
  • F+
  • Apple makes a product that is very seductive to education. Their products last a long time and are updated for many years. The problem? COST! In my son's school system, they are adopting Chromebooks for the students. They are simply far cheaper than iPads. However, most administrators have iPads. There are far fewer admins, and they tend to use the iPads for 5-10 years. TV? I'd like to see Apple lead by bundling. Offer a subscription that includes, say, Hulu, HBO, ESPN, and Netflix for less than those individual services cost. That would get me to shell out for an Apple TV. Apple really needs a mid-range phone. The SE helps, but its small and other companies' mid-rangers have 5 or 5.5 inch screens. If an SE level phone could be offered on the 6-plus chassis for a reduced price, I think it would be a hit for Apple. I think Apple should avoid budget phones unless they intend to offer expandable storage. iOS is not a product friendly to the small memories of most budget phones.
  • the biggest threat is apple. apple should not start watching at others. apple never made the best product. the last two years apple released to many unfinished products. they try to work on everything and it is just to much. than hardware i really like and guys do not come other making better router, just gone. apple out of the display business? why? apple turn the wrong way and i see Microsoft and google will take more and more part from apple.