Apple did not perform as expected in 2016, with sales and profits going down compared to the previous year for the first time in 15 years.
QZ - December 22, 2016
That doesn’t mean that Apple did not earn well this year, it did, however it released a series of new products that did not seem to generate the same level of excitement in consumers as they did in previous years.
Even though it was always going to be difficult to keep the momentum from 2015 going, Apple had a very strong first quarter (which is actually its holiday 2015 quarter). The rest of the year, however, looked a lot like 2014—not terrible, by any stretch of the imagination, but just not as impressive as 2015 was.
Sales of iPhones constitute the bulk of Apple’s revenue, accounting for anywhere between half and three-quarters of its revenue in any given quarter. So when iPhone sales slumped in 2016, so did Apple’s profit. Many considered the new iPhone 7 to be somewhat of a letdown, with a form factor that’s exceedingly similar to the iPhone 6 and 6S that preceded it, the lack of a headphone jack, and few upgrade-worthy features.
Similar complaints were levied toward the new MacBook Pros, which replaced every single port that people have used over the last few years with future-proof USB-C ports. The machines were also seen as underpowered for the price. To get the top specifications available, you had to buy a machine with Apple’s new Touch Bar, a small touchscreen that replaces the traditional function keys atop the keyboard, which has also been as a hindrance for many who regularly use the physical function, escape, or volume keys.
As a result, Apple had a middling year on Wall Street by its standards. Its stock began the year at about $103, and closed at roughly $117 on Dec. 20. That’s a healthy return of over 13%, and pretty much in line with how the S&P 500 fared over the same period, but far below the massive yearly gains Apple has had in years past.
Some, including myself, have called Apple boring for its uninspiring product launches in recent years. In many ways, it seemed that 2016 was a year for Apple to regather itself. Nothing it released felt particularly new, even when it was. The iPhone looked the same, as did its new iPads and Apple Watches, and even the Macs were essentially the same design as the MacBooks unveiled in 2015. The only entirely new product it unveiled during the year was the AirPods, a set of wireless headphones—which is only the second entirely new product Apple has released during CEO Tim Cook’s six-year tenure. They’ve been met with mixed review, and were delayed multiple times, only to eventually go on sale about a week ago.